Ransom E. Olds

Ransom E. Olds

Ransom E. Olds (1864-1950) was an automotive industry pioneer whose company developed, manufactured, and sold one of the first affordable cars in mass production in the United States. His $650 "runabout, " popular in the early 1900s, came about partly as a result of his experiments with perfecting a gasoline-burning engine at his family's machine shop. Though Olds was only active during the automobile industry's formative years, the influence he exerted on others-both colleagues and competitors-as well as the numerous patents granted to this gifted inventor marked him as one of the field's most important founders.

Ransom Eli Olds, whose ancestry stretched back to Puritan-era New England, was born in Geneva, Ohio, on June 3, 1864. His father, Pliny Fisk Olds, was at various times a blacksmith, manager of an ironworks facility, farmer, and pattern maker before moving to Lansing, Michigan, and opening a machine shop when "Ranny, " the fourth of his sons, was in his teens. Two older Olds brothers were many years Ranny's senior, and had by then struck out on their own, but the third son, Wallace, joined his father in the family business, P. F. Olds and Son; while still in school Ransom Olds also began working at the shop, which both manufactured and repaired steam engines.

Clever Machinist

Olds had learned a great deal from observing the ups and downs of his father's business ventures, and soon proved to be an adept third manager from the launch of P. F. Olds and Son in 1880. He also demonstrated a talent for machining, pattern making, and general mechanical tinkering, the first two learned directly from his father; he later credited Pliny Olds with providing him the most valuable training of his career. Olds did not finish high school, but did take courses at Lansing Business College around 1882. Three years later, his father made him a partner in the shop, and the business soon became a great deal more successful with the fruits of Ransom Olds's experiments: he developed a steam engine with a gas burner, which worked far more efficiently than others that burned coal or wood. Within five years, their company had sold 2, 000 of the engines and was turning a healthy profit.

Olds was an avid boater, and began experimenting with other uses for his gas-burning engine. He tried one out in a boat, but also installed one on a carriage-in a horse's stead-perhaps as early as 1887. The taciturn Pliny Olds, according to George S. May's R. E. Olds: Auto Industry Pioneer, reportedly told someone, "Ranse thinks he can put an engine in a buggy and make the contraption carry him over the roads. If he doesn't get killed at his fool undertaking, I will be satisfied." Olds soon found that by installing a pair of engines on a carriage, he could get the vehicle up to 15 miles per hour. An 1892 article in Scientific American aroused the interest of a British patent-medicine firm who bought Olds's experimental vehicle and transported it to India-making this perhaps the first sale of a self-propelled vehicle in the United States, and certainly the first exported for foreign sale. Automotive historians have tried with little success to determine the fate of that motorized carriage, but surmise that it did not even reach Bombay at all and went down at sea.

Granted Historic Patent

Olds attended the Chicago World's Fair in 1893, where the gasoline engines displayed by a Grand Rapids firm likely spurred him to switch his company's focus away from the steam-gasoline engine and to instead perfect a fully gas-powered device. By June of 1896 the Olds firm had an internal-combustion engine in production, a patent application pending, and Olds returned to his horseless carriage experiments. He managed to reach a top speed of 25 miles per hour in his prototype vehicle, and later that year applied for the first patent granted in the United States for an "automobile carriage." Olds's company teamed with a carriage-maker to build their product, about which there appeared to be great consumer excitement.

To expand his facilities in order to meet this demand, Olds sought investors and found one in a Lansing real-estate mogul named Edward W. Sparrow. With Sparrow's capital the Olds Motor Vehicle Company was launched, of which Sparrow held the presidency, but there were problems from the start in 1897. By the following year the company had yet to make more than a handful of vehicles, and there were continual problems between the money-minded investors and the less pragmatic Olds. It nearly went under several times, but then in 1899 Pliny Olds's original, still-profitable engine-manufacturing firm was merged into a new venture called the Olds Motor Works. It was backed by a friend of Sparrow's, a retired Michigan copper-mine mogul, Samuel L. Smith.

Smith, a Detroiter, and other local stockholders insisted that the Olds Motor Works locate in Detroit, which was already a thriving manufacturing center for carriages, stoves, and other products. At this point, another Detroiter, Henry Ford, was still attempting to launch his own motor-vehicle manufacturing operation; he had incorporated one in 1899, but it failed a year later. The newly-built Olds Motor Works plant and offices on the Detroit River were the city's first permanent auto manufacturing enterprise. Olds and the board of directors finally agreed to concentrate first-year production on the "runabout, " an open-air vehicle with a lightweight carriage. Olds himself was responsible for the car's unique "curved dash, " which kept passengers warm, but more importantly, gave it a distinct profile that set it apart from competitors. The company advertised the car nationally-and were the first to market the product as a convenience to women and doctors-and had orders for 300 of them at $650 a piece when production began in 1901.

Factory Fire

Production ceased, however, in March of 1901 when Olds and his family-he had married Metta Ursula Woodward in 1889, with whom he had two daughters-were returning from a California visit to the now-retired Pliny Olds and his wife Sarah. Olds was on a streetcar back to his home on Detroit's Edmund Place, and spotted a newspaper headline announcing his factory had been destroyed by fire that day. Fortunately the conflagration occurred on a Saturday afternoon, and no one was killed. The plant, however, was ruined, and the fire would enter the annals of American automotive history as an apocryphal, though not altogether true, tale. Olds would later say that all the plans and patterns had been destroyed in the fire (which was not true), and that only one model had been saved by a brave worker-his curved-dash runabout (actually, this and several other prototypes emerged safely from a fireproof vault). The company recovered quickly from the setback, farming out light assembly work to supplier facilities while insurance money financed the reconstruction of the plant.

Over four hundred runabouts were produced in 1901, a healthy comeback for the Olds company, but its founder suffered health problems as a result of the stress and was hospitalized that spring. The company would eventually relocate some of its production back to Lansing-with Olds moving back to manage its plant there-and by 1905 the Olds Motor Works was producing 5, 000 cars a year. Olds worked tirelessly to promote the car himself, and was a well-known American business celebrity in his day. He raced the car at a track at Daytona Beach, Florida, in 1902 (where he had real estate investments), and his name and visage often appeared in national advertisements.

A New Start

In time, the Olds company was troubled by Olds's conflict with Frederic Smith, son of Samuel L. Smith. The younger Smith, who usually held the title of company president, handled sales and began questioning production techniques when runabout buyers complained of problems; he claimed that Olds was uninterested in improving the car or certifying that it was free from mechanical defects when it left the plant. The split between the two came when Smith set up an experimental engineering shop without Olds's knowledge, and by 1904 Olds had sold nearly all of his stock and exited the company for good. He was just forty years old, however, and far from eager to retire. Instead he founded the R. E. Olds Company in Lansing in August of 1904; the Detroit Olds Motor Works threatened to sue for use of the name, and so Olds changed it to one with his initials, the Reo Motor Car Company.

Olds's new venture produced the Reo, which was introduced in 1905, and its plant would turn out a record number of cars between 1905 and 1909. They also sold a runabout for around $650, and a more powerful touring car for almost twice that amount. Yet once again, Olds came into conflict with his investors, and once he had proven to his detractors that he could indeed launch and make profitable his own automobile manufacturing operation, he seemed to lose interest. His second company had eclipsed that of the Smith's Olds Motor Works, which was taken over in 1908 by a newly-created General Motors Corporation. Over the next two decades, Olds devoted more of his energy to his real estate and banking holdings, and also enjoyed yachting in both Florida and on the Great Lakes.

Olds only became actively involved again in his company briefly in 1934 during the midst of the Great Depression, but by 1936 he had formally retired and the Reo Company had halted its car manufacturing operations. It concentrated instead on truck production, but faced receivership, sit-down strikes during the labor-union era of the late 1930s, and continual problems with New York stockholders. For a time, the company survived from truck contracts from the U.S. military during World War II, but in the postwar era concentrated on lawn-mower and marine engines. It was sold twice in the 1950s, switched its focus to nuclear-device testing, and existed in the late 1990s as the Nucor Corporation of Charlotte, North Carolina.

Ransom E. Olds died at his Lansing home in August of 1950; his wife fell at his funeral and died a few weeks later. He had been a well-known figure in Lansing's social and business community, and for years the city officially feted him on his birthday. George S. May, writing in the Encyclopedia of American Business History and Biography: The Automobile Industry, 1896-1920, praised Olds for his impact on the automobile industry as a catalyst, for "the role he had played in stimulating and encouraging others to enter the field." Several who had worked for Olds went on to found their own car or supplier firms (Roy Chapin and the Hudson Motor Company was one), two others who made sheet metal for him founded a company that was eventually subsumed into Chrysler, and his engine-maker, Henry Leland, would go on to co-found the Cadillac nameplate; Olds also worked with the Dodge Brothers in Detroit and, according to May, proved to Henry Ford "that there was money to be made in producing a low-priced car."

Further Reading

Encyclopedia of American Business History and Biography: The Automobile Industry, 1896-1920, edited by George S. May, Bruccoli Clark Layman/Facts on File, 1990.

Fucini, Joseph J., and Suzy Fucini, Entrepreneurs: The Men and Women behind Famous Brand Names and How They Made It, G. K. Hall, 1985.

May, George S., R. E. Olds: Auto Industry Pioneer, William B. Eerdmans Publishing Company, 1977.

Niemeyer, Glenn A., The Automotive Career of Ransom E. Olds, MSU Business Studies, 1963.

Raleigh News & Observer, September 21, 1997.