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Michigan Manufacturing Insight : January/February 2002

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Feature Articles

A Century of Innovation: Manufacturing from 1902-1931: Michigan Becomes Motorized

By Brad Ritter

Business owners were adapting their methods to include new communications devices; city planners were examining how to make the best use of real estate; working men and women were enjoying new forms of entertainment that allowed them to hear and see performances from distant places; and entrepreneurs staked their fortunes on the latest advances in technology, amassing large fortunes seemingly overnight — and then seeing them disappear just as quickly.

Actually, that was Michigan’s climate at the turn of the 20th century — a time when the territory still possessed more forests and farmland than cities, but was transforming into a center of industrial commerce for the nation and the world. Enterprising business people were developing products and processes that would revolutionize American life and position Michigan as a hub of manufacturing innovation and productivity.

And the Michigan Manufacturers Association (MMA) brought together those business leaders in a common forum to advocate for government policies that would allow productivity and creativity to thrive in a responsible manner.

Putting America on wheels

If any product characterizes Michigan to the world, it’s the automobile. And even as European inventors such as Gottlieb Daimler were putting together early versions of the “horseless carriage,” Lansing’s Ransom E. Olds, Flint’s William C. Durant and Dearborn’s Henry Ford set the pace for the popularization of auto travel with their pioneering efforts.

Olds started his work on the auto while still employed in his father’s carriage factory in Lansing, and passers-by would tell Olds’ father, “that kid of yours will blow his head off one day” with his love for tinkering.

But Olds persevered and developed a primitive horseless carriage, one of which was exported to London in the first recorded American export of a motor car. It was supposed to have been sent to Bombay, India, but history is unclear as to whether the vehicle actually made the trip.

Once the Olds Motor Car Co. was formed, Olds moved the operation to a plant on Jefferson Avenue in Detroit and developed the first widely-sold model, the “curved-dash” Oldsmobile. But a 1901 fire destroyed the Jefferson Avenue plant and Olds returned to Lansing, where he built up the company and its products to the point where it became part of the new General Motors Co. in 1908.

General Motors came about through the efforts of William Crapo “Billy” Durant, whose grandfather, Henry Crapo, built a fortune in Michigan’s booming lumber industry and later served two terms as Michigan’s governor. Durant formed the Durant-Dort Carriage Co. in Flint and acquired the Buick Motor Co. from David Dunbar Buick. Durant then founded General Motors and, within two years, had acquired full interest in the Oakland Motor Car Co., the precursor of the Pontiac brand, along with the original Olds Motor Vehicle Co.

Among the emerging auto innovators in the GM fold was Walter P. Chrysler, who rose from the production ranks to become general manager of Buick and then oversaw the Chalmers-Maxwell operation. Chrysler struck out on his own with the debut of the “Chrysler Six” in 1924 and formed the Chrysler Co. with the Maxwell assets in 1925. By 1929, Chrysler had broadened its offerings with the entry-level Plymouth line and mid-priced DeSoto line, along with acquiring Dodge Bros. — at that time “five times the size of the Chrysler Co.,” according to a company history./font>

But it fell to Henry Ford, a gifted mechanic and inventor, to develop the motor car that opened auto travel to large numbers of Americans. Founding the Ford Motor Co. in 1903, Ford enlisted the technical input of immigrant engineers and opened opportunity to a diversified labor force with the five-dollar-a-day pay system. He’s also credited with popularizing the production line concept, and also built and sold the first mass-consumption car, the Model T.

Ford’s rugged individualism was apparent in his long legal battle against the licensing system maintained by George B. Selden, who held patent rights to American use of the internal combustion engine for motor car use. Ford prevailed in the lawsuit in 1911, while the Model T rose to such prominence that, by 1913, Ford’s company produced half of the automobiles in use in the U.S. at that time.

Creativity flourishes

While Detroit came to be known as the “Motor City” and Dearborn, Lansing, Flint and Pontiac held prominent positions in the expanding auto industry, they were by no means the only centers of manufacturing expansion and emerging innovation in the early 20th century.

Will K. Kellogg turned research on nutrition at his brother’s renowned Battle Creek Sanitarium into production of commercially-produced breakfast cereals, and the Kellogg Co. and C.W. Post Co. established Battle Creek as the nation’s “Cereal City” with ready-to-eat breakfast foods.

The Grand Rapids-Zeeland-Holland corridor, which had developed into a center for handcrafted furniture, took its place as a leader in the growing office furniture industry with companies such as Steelcase, Herman Miller, Haworth and American Seating leading the way.

In Fremont, Daniel Gerber saw an opportunity in his wife’s frustration with straining vegetables for their young children to eat, and developed a process for mass-straining vegetables and fruits in 1928, resulting in the formation of The Gerber Co., today a world leader in baby foods and products.

Petroleum, which became the prime commodity for powering the gasoline engine and lubricating industrial machinery, spawned a growth industry as refineries sprang up to extract gasoline, oil and heating fuel from Michigan-based oil reserves and other sources. Alma, Muskegon, Mount Pleasant and Detroit became key links in the nation’s petroleum distribution system.

Herbert Dow took brine, which was initially seen as a waste byproduct of drilling for oil, and developed a growing chemical enterprise in Midland that extracted bromide, chlorine and iodine for industrial, medicinal and home uses. In so doing, he almost single-handedly broke powerful chemical cartels in Germany and England that monopolized the production, distribution and sale of such chemicals.

Supporting these primary manufacturing functions, scores of supply and machining industries emerged, from the Hayes Wheel Co. in St. Johns (later to evolve into Kelsey-Hayes Co. and Hayes Lemmerz Corp.) to East Jordan Iron Works in northwestern Michigan. Packaging became an important component of shipping goods from business to business, as well as from producer to consumer, and close access to Michigan’s forest reserves enabled such firms as International Paper and Mead Paper to popularize corrugated cardboard packaging.

Campaigning for regulatory relief

With the rapid development of the automobile industry, as well as increasing availability of electrical power to operate industrial plants and light homes and streets, Michigan was poised for a business boom heading into the 1910s.

But Michigan businesses also had to deal with the very real problems of predatory insurance practices and of currents in the legislative arena that sought to impose strict standards of liability on business owners. Inequitable taxation on business property and equipment was also a major obstacle early manufacturers endeavored to overcome.

A precursor group to the Michigan Manufacturers Association, the Detroit Merchants and Manufacturers’ Exchange, pointed out the value of businesses’ linking together toward common goals of fairness this way:

“Two results have followed from the work of the Exchange. First, the manufacturers and jobbers of the city have found that they cannot afford to be without the assistance and protection it gives; second, the various agencies which formerly victimized business men as individuals have found that they cannot do so when united in so strong a combination.”

In response to the unequal and burdensome tax structure levied upon manufacturing enterprises, at a meeting in the Michigan House of Representatives chambers in 1902, 130 manufacturers formed the Michigan Manufacturers Association (MMA) as a voluntary, nonprofit association that would present the concerns of manufacturers to government and seek responsible policies.

In its early years, in addition to tax fairness, MMA also addressed such matters as the use of prison labor in manufacturing firms and the formation of a uniform system of workers’ compensation to protect injured and ill employees.

“Humane manufacturers can have no fault to find with legislation which will make some provision for the maimed and the survivors of the defunct, provided only that it falls with an equal burden upon every manufacturer,” read an editorial in the Michigan Manufacturer of January 16, 1909.

Hal H. Smith, MMA’s general counsel, worked tirelessly with the manufacturing community to form a solution to the workers’ compensation question. By 1910, MMA called a conference in Detroit to review a draft of proposed legislation, and held two other conferences in December 1910 and January 1911 to evaluate the measure.

The ninth annual meeting of MMA coincided with legislative hearings on the bill in February 1911. While the Legislature did not pass a workers’ compensation bill that session, it did call for a commission to study the question. Gov. Chase Osborn appointed Smith, as well as Charles R. Sligh, of Sligh Furniture Co. of Grand Rapids, and W. P. Belden, of Cleveland-Cliffs Iron Co. of Ishpeming, to serve on the commission.

Smith traveled to Germany and England that year to examine those countries’ systems of workers’ compensation, along with attending hearings and conferences around Michigan. “The commission recommended that workers’ compensation legislation be based on the following cardinal principles: (1) reasonable compensation at minimum cost for all accidents except as result of willful fault; (2) certainty of amount; (3) certainty of payment; (4) payment without litigation; and (5) prevention of accidents,” said David S. Zurvalec, MMA vice president of industrial relations, in a 1992 Enterprise story on the development of workers’ compensation in Michigan.

By 1912, Gov. Osborn called a special session of the Legislature to debate the proposed legislation, and both chambers sent a workers’ compensation bill to the governor, who signed it into law March 20, 1912.

As more and more industries opened for business in the early 1900s, MMA grew in membership and in the respect it gained from other business advocates and government leaders for its work in fostering a harmonious atmosphere for manufacturing to thrive in the state. That service ethic would be tested through the years of the Great Depression and through the challenges of the Second World War.

Brad Ritter is communications specialist for the Michigan Manufacturers Association. He may be reached at 800-253-9039 ext. 542 or 517-487-8542.

Editor's Note: Throughout 2002, Enterprise will look back on MMA’s 100 years of service to the Michigan manufacturing industry with a series of features reflecting on significant highlights in Michigan manufacturing history.

• Manufacturing from 1902-1931: Michigan Becomes Motorized
• Manufacturing from 1932-1946: Labor Struggles and the Arsenal of Democracy
• Manufacturing from 1946-1965: The Rise of the Motor Capital of the World and Entrepreneurship
• Manufacturing from 1966-1982: Environme ntal Awareness and International Competition
• Manufacturing from 1983-Present: MMA’s 100 Years of Service

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