Editor’s Note: This column is being reprinted from October 3, 2016.
Charles Nash was a Civil War baby, born just six months after Henry Ford. Both families were involved in farming, but Ford grew up in a fairly prosperous household; some of the tragic turns Nash’s childhood story took could easily have destroyed another person’s life. Nash’s parents either died or divorced, and which isn’t known. But we do know that he was made a ward of the court at just 6 years of age — and the court promptly hired the boy out as an indentured servant to a farm family in Flushing, Mich.
That life seemed little better than his original family’s, and so he ran away from that hard labor with few benefits at just 12. He found work on another farm, then at 19 finally became a farm foreman for yet another family.
For the times, things seemed to be going well. Nash was paid $300 a year and given a furnished cottage, and that allowed him to marry. During the farming “off season” he went into Flint to find more work and it was in 1890 that he was noticed working in a hardware store by William Durant. At the time Durant was part owner of the Flint Road Cart Company, soon to be the largest manufacturer of carriages in the nation. Within a decade Durant would start acquiring the collection of struggling automakers that would become General Motors.
He hired Nash as a common laborer, but Nash proved anything but common. He found ways to double the output of virtually every position he was assigned to, which angered his fellow workers because they were consequently forced to work at his speed. In short order he became the supervisor of the factory floor, earning $1,200 annually. That’s about $33,600 in today’s money; but, in a nation where the average worker was earning less than $250 a year, it wasn’t bad money at all.
And it was there that Nash started his long-term future career, which helped change the auto industry and our economic society.
Man, as in Manager
As Durant left the day-to-day operations at his carriage firm to oversee operations at the newly acquired Buick Motor Company, Nash took over as Flint Road Cart Company’s general manager. And, although the firm’s carriage sales hit an all-time high in 1906, it was becoming obvious to everyone that the carriage industry’s days were numbered. Nash moved over to GM.
When Durant ran into financial troubles with his General Motors in 1910, and his bankers subsequently dismissed him from his own company, Nash was elevated to president of Buick. And, although it was James J. Storrow, the lead banker installed as GM’s president, who found railroad mechanical genius Walter Chrysler, it was Nash who brought him on board at Buick and moved him into the Buick presidency when Nash became president of GM in 1912.
Nash successfully improved GM’s volumes and financial positions as its bankers demanded. The problem was that Durant had gone off and bought the Little Car Company and enticed famed racer Louis Chevrolet into the auto industry with his own high-line automobile. It was Durant’s putting Chevrolet’s name on one of the cheaper Little cars that ended their partnership in an instant. Now combining the two firms into the Chevrolet Motor Company while manipulating its stock value, Billy Durant was successful in a hostile takeover of his old company, General Motors, in 1916.
Not wanting to play second fiddle to Durant in the new GM, Nash left. Here’s where his strong relationship with banker and former GM president James J. Storrow came back into play.
Then the Legend
Nash wanted to purchase the Thomas B. Jeffrey Company in Wisconsin, which had produced the original Rambler automobile in 1902 but by then was on fairly hard times. The price was $5 million. Storrow secured the funds and became chairman of the board, while Nash was installed as president of the newly renamed Nash Motors Company.
At the time that firm was best known for its 1- and 2-ton trucks, its automobiles considered mediocre at best. Things worked out because America needed truck production to fulfill our commitment to the Great War. And, although Nash had his new engineers work on better engines and cars, the first real consumer movement for Nash didn’t come until the war ended in 1919.
There were mistakes along the way, but by and large Nash was successful and, more than that, well respected in the industry. While production did drop during the Great Depression, Charles Nash and his company soldiered on. By 1936, as car production returned to pre-1929 volumes, Walter Chrysler suggested that George Mason come on board as the new president of Nash’s company so that Nash could finally retire. Mason agreed, but only if he could merge his company, Kelvinator, which manufactured high-end refrigerators and kitchen appliances, with the car company. That’s how Nash Kelvinator was born. (GM owned Frigidaire at the time, so this wasn’t the first car company that also made refrigerators.)
But here’s what Nash achieved in just the first nine years: He took a struggling company and a $5 million investment and got the stock value up to $137 million; he incurred zero debt while netting profits of $56 million and put $30 million in the bank. Please tell me again how Elon Musk is considered a financial genius in the auto industry today.
As for Nash? While he was enjoying retirement in his Beverly Hills home in sunny California, his company introduced the heating and ventilation systems that are still used in automobiles. It also installed the first seat belts in 1950 and created the first American compact car that same year.
A Tale of Old America
In 1954 Nash’s car company acquired Hudson Motors of Detroit and became American Motors, discarding the Nash name as quickly as the memories of his accomplishments had been after he passed away in 1948. And soon after that George Mason, by then CEO of the company, also passed away, which left George Romney as head of the newly merged automaker. So it can be easily inferred that Mitt Romney’s financial life started as a direct result of indentured farm laborer Charles Nash’s drive and vision from decades earlier.
Mitt’s father left to go into politics in 1962 and was elected governor of the nearly bankrupt state of Michigan. The company that was now AMC still held the Rambler nameplate, first established 60 years earlier under Thomas B. Jeffrey.
In 1970 AMC purchased Kaiser Jeep and a decade later was forced into a joint venture with Renault. That ended when Renault’s chairman was assassinated, leaving American Motors to be purchased by Lee Iacocca in 1988. And with that the circle was complete: Charles Nash brought in and trained Walter Chrysler in the auto industry, Chrysler recommended Nash’s replacement when he retired, and in the end what was left of Nash’s company became the property of Chrysler.
But what incredible accomplishments for man with virtually no education whatsoever. Sold by a court into indentured servitude as an orphaned 6-year-old, he still went on to do many great things. Thus endeth the lesson: It’s highly doubtful that anyone from such a handicapped position in life could ever accomplish so much today.
Come to think of it, it probably couldn’t have happened 50 years ago, either. Even then this was a completely different country from the America in which an abandoned child successfully pulled himself up by his own bootstraps and helped improve our economically based automotive society.
© Ed Wallace 2015
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: firstname.lastname@example.org, and read all of Ed’s work at www.insideautomotive.com