Sales Ad Saturday- Walter P. Chrysler resigns from Buick
An early Chrysler ad from the archives for this week’s ‘Sales Ad Saturday’. This week in 1920, Walter P. Chrysler, President of Buick, resigned from General Motors. His resignation represents a pivotal moment in automotive history and the eventual establishment of the Big Three. Chrysler was hired by GM President Charles Nash in 1911 to oversee Buick's engineering and production. Coming from a railroad background but looking to break out into the emerging automotive sector, Chrysler took a 50% pay cut from his job at the railroad, earning only $6,000 a year. At the time, GM was cash-strapped and in crisis, working to sort out the financial mess made by William Durant when he was forced out as Chairman of GM in 1910. Buick was one of only a few divisions at GM that was making money at the time, and Chrysler’s job was to continue to refine and develop the brand while maximizing division profit. In time, Chrysler proved extraordinarily successful in both endeavors.
Meanwhile, behind the scenes, Durant was quietly angling to regain control of GM. He finally did so in a dramatic fashion at GM’s annual shareholder meeting in September of 1915, when he showed up with 450,000 shares under his control. In early 1916 Durant, now president of GM, was fully aware of how valuable Chrysler was at Buick and offered him a staggering $500,000 a year (over $12 million today) in exchange for a three-year commitment to stay at Buick as president. Chrysler was making $25,000 a year at the time, finally given a raise in 1915 after threatening Nash with intentions to leave after three years of working tirelessly at Buick. Durant had a motive, however, as he was aware that Chrysler, along with Nash were in talks to break away and acquire Packard, a deal that eventually collapsed. Despite Chrysler’s aspirations to be an automaker in his own right, Durant’s offer proved alluring. Chrysler agreed to stay under a provision that he would have complete control over Buick, with no interference from the often-controlling Durant, a provision not always adhered to. Not long after Chrysler’s contract was up in 1919, he resigned from Buick in frustration, after Durant unilaterally backed out of a contract Chrysler was about to execute with manufacturer A.O. Smith, who was supposed to supply the frames for the 1921 Buicks. Alfred Sloan, then VP of GM remembered the meeting, later quipping that “Chrysler banged the door on his way out, and from that bang eventually came the Chrysler Corporation”, in time the 3rd member of the Big Three.