REO: The Man and the Machine
Ransom Eli Olds was a pioneer in the automobile industry. He is known as the inventor of the Oldsmobile, but more important, he produced low-cost autos at a time when the norm was to market expensive vehicles to the wealthy. Olds was also a businessman of widely varied interests, and he assumed managerial involvement in a number of other areas.
Olds was born in 1864 in Ohio, but his family moved to Lansing, Michigan in 1880. His father, Pliny Olds, established a machine shop in Lansing. There Ransom began building steam engines.
The Olds Motor Vehicle Company was organized in 1897, with $50,000 in start-up capital. Edward W. Sparrow and business associates were major shareholders in the company. Olds became the general manager.
In 1899, Olds Gasoline Engine Works (former P. E. Olds and Son) combined with the Olds Motor Vehicle Company to form the Olds Motor Works. Ransom Olds served as vice president and general manager in this new company. Taking advantage of the skilled labor, the plant moved to Detroit. The name Oldsmobile was adopted as the trade name for Olds Motor Works. In 1901, the Detroit plant burned down, but was rebuilt in 1902. That same year a new plant was erected in Lansing. Both factories started producing the curved-dash Oldsmobile, designed by Ransom Olds. In the first year of production, about 400 cars were produced and sold, an unprecedented amount at that time. By 1902, 4,000 were sold.
Ransom Olds left the Olds Motor Works in 1904 and established the REO Motor Car Company. On October 8, 1910, the investors also formed REO Motor Truck Company to manufacture trucks, eventually known as "speedwagons." Three years later, the first REO buses went into production. This firm was combined with the REO Motor Car Company on September 29, 1916. During 1919, the firm sold more trucks than cars for the first time and continued to do so until 1936. In that year, car production was halted due to losses from declining sales caused by the Great Depression.
Ransom Olds resigned as general manager in 1915, but he retained his seat on the board of directors. When Olds left the automobile business in 1936, he resigned from the board and sold his remaining stock.
The firm was reorganized in 1938 as REO Motors Inc. with the aid of a $2 million loan from the Reconstruction Finance Corporation. Military contracts during World War II allowed the new firm to record modest gains. As the war ended, so did these contracts, and the gains became drastic losses.
During May of 1954, C. Russell Feldmann of Henney Motor Co. was assigned to REO Motor Co. with the purpose of combining it with another truck manufacturer, Diamond T. Diamond T made excellent cabs while the REO Gold Cornet Engine was the best available at the time. Diamond Reo Trucks Inc. went bankrupt in 1975, 25 years after the demise of REO Motor Company's founder, Ransom Eli Olds.