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        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automakers > The Rearview Mirror: Chrysler to the Rescue

        The Rearview Mirror: Chrysler to the Rescue

        With the death of Maxwell Motors Corp. comes the birth of one of America’s largest automakers.

        Larry Printz
        Larry Printz , Assistant Managing Editor
        June 11, 2022
        Walter Chrysler and the first Chrysler Six, made by Maxwell Motors Corp.

        Among automakers, Chrysler Corp. has been wedded in recent decades by Daimler, Cerberus, Fiat and now, the PSA Group. Yet this week in 1925, it was Chrysler’s founder, Walter Chrysler, who was saving automakers, in this case, Maxwell Motor Corp. Reorganizing it as the Chrysler Corp., Maxwell becomes nothing but a punchline in comedian Jack Benny’s repertoire.

        A retirement brings a new job

        In 1919, Walter Chrysler was the vice president of GM in charge of operations as well as president of Buick. Tired of GM founder Billy Durant, Chrysler resigns at age 45, determined to retire — or so he tells his wife. 

        Instead, he goes to work for Willys-Overland, which was struggling after the company’s World War I contracts ended even though as its many subsidiaries meant to service them remained.

        Maxwell Motors was $25 million in debt when Walter Chrysler assumed control of the company.

        “Its harvesters and airplanes, if anything, were better than its automobiles. The company had to make better automobiles if it were to survive,” Chrysler remembered in his memoir, “Life of a Working Man.”

        Knowing he needed a new car, Chrysler came across three young engineers, Fred Zeder, Owen Skelton and Carl Breer. He partitioned off in a section of Willys’ Elizabeth, N.J. plant to design the new car. 

        Another call for help

        Chrysler was still untangling the mess at Willys when his banker friends came calling to help with another troubled automaker. This time it was Maxwell Motors, formed in 1903 in Tarrytown, N.Y. by Jonathan Maxwell and Benjamin Briscoe with help from J.P. Morgan. Briscoe used Maxwell to build the United States Motor Co., a short-lived attempt to challenge General Motors. It didn’t work, and by 1920, Maxwell was facing ruin.

        Walter Chrysler took on Maxwell Motors even while working at Willys-Overland.

        A new challenge

        A wartime boom after World War I had helped Maxwell Motors overcome its loss of government contracts. But all booms fade, yet Maxwell was extended credit to the tune of $25 million. With onset of a recession, Maxwell was deeply in debt and facing ruin. But Chrysler wasn’t tempted to tackle saving Maxwell, leaving one meeting saying, “I would not touch it with a 10-foot pole.” 

        Yet the bankers kept at him, offering not the $500,000 salary he got at GM, not the $1 million paycheck he was getting from Willys, but $100,000 and ownership of the company, with rewards coming from possession of an ultimately successful company. He took the job, selling off its excess inventory, putting Maxwell through receivership and bringing the company back from the brink, much as Lee Iacocca and Sergio Marchionne each would later do with Chrysler. 

        1924 Chrysler Six

        He also exited Willys, taking his talented engineering trio with him along with the car they were working on. It would become Maxwell’s newest car: the Chrysler. 

        But it almost didn’t happen.

        Rules and bankers block progress 

        Having left Willys and concentrating solely on Maxwell, Chrysler was working with Zeder, Skelton and Breer to bring the new car to market they started at Willys. But Chrysler was facing a problem. The American Automobile Chamber of Commerce, which allotted space at the New York City Auto Show, would not allot space for the new Chrysler as it had yet to be sold. Only cars that were already being sold, such as Maxwell’s other cars, could be displayed. Chrysler needed money to get the cars into production; Maxwell’s credit was stretched to the breaking point. Yet without visibility at the show, the Chrysler might be finished before it debuted. 

        Walter Chrysler with a 1924 Chrysler

        Then, he had an idea.

        They couldn’t get into the Grand Central Palace, where the show was taking place, but they could set up a display in the lobby of the Commodore Hotel, where most of the industry’s leaders were staying.

        “Although we were not in the show, we stole it! From morning until late at night, a crowd was densely packed around us,” Chrysler wrote.

        “Now and then I would observe a rival manufacturer pass his fingers over the plush-covered seats,” he remembered. “They knew the car was a sensation.”

        By the 1930s, Chrysler was the second largest U.S. automaker. Above, Walter Chrysler and a 1934 Chrysler Airflow.

        Equally impressed were bankers, who lined up to give Maxwell more credit to get the car into production. Once it was, in 1924, Maxwell sold 32,000 Chryslers. The $5 million that the bankers loaned Maxwell netted a $4,115,000 profit. 

        What the future held

        “There was no question about space for the Chrysler sixes when allotments were made for the Automobile Show of 1925,” Chrysler said. “It was a good time to straighten out our corporate structure and so, in 1925, Maxwell Motor Corporation became the Chrysler Corporation.”

        By 1926, there are four models: the 50, the 60, the 70 and Imperial 80. By 1927, Chrysler is the fifth largest automaker in America. Chrysler expands rapidly in 1928, buying Dodge Brothers for $170 million, as well as introducing the mid-market DeSoto and low-priced Plymouth brands. 

        “The primer lesson of the automobile business was: ‘make your product so that all American families can afford to buy it,” Chrysler wrote. “Now and again, some manufacturer would forget that lesson. But we were not forgetting it.”

        By 1937, Chrysler is building 1 million cars a year, and is the second biggest American automaker after GM. And it started this week in 1925, when Maxwell Motors Corp. became Chrysler Corp. 

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