A Short History of the American Automobile Industry - Baltimore Post-ExaminerBaltimore Post-Examiner

A Short History of the American Automobile Industry

As a nation, America is reliant on having a car to get around. The vast expanse of land that’s the United States means that a lot of towns and cities are simply too far away from each other to rely on public transport. The public transport systems are there, sure, but for most people, it’s simply easier and more convenient to drive.

Of course, cars are a relatively recent invention. Before 1900, Americans simply traveled less, or understood that if they needed to get somewhere, it might take a long while. It wasn’t until the car was invented that Americans were able to move around the country more freely. Here’s how that happened, from the 1900s to now.

The American automobile industry began life in the late 1800s, but it wasn’t until the early 20th century that it began to take off. It seems strange to us now, but back in the day, cars weren’t seen as a legitimate industry – more as a novelty item that only a few people would ever own. However, rapid developments in technology in the 1900s meant that it wasn’t long before cars were being made much more efficiently, and the first automobile patent for a car to be produced for sale was filed in 1886. The man who filed that patent? Karl Benz, founder of the company we now know as Mercedes-Benz.

This first car was called the ‘Motorwagen’ and had only three wheels (two at the back and one at the front). It also didn’t initially have rear brakes, or a fuel tank for that matter – all these were added later.

Still, even after the invention of the Motorwagen, cars weren’t really doing much business. They were really expensive to produce, and it took a long time to build one, so the average American simply couldn’t afford one. But then, in the early 1900s, the industry exploded, and in just four years, more than 200 companies began producing cars. By 1908, Henry Ford of Ford Motor Company had built the first Model T, often considered to be the first car because it was the first one widely available to American families. If Benz was the father of the modern automobile, then Ford was the father of the modern automobile industry.

It was Ford who, in 1913, invented the assembly line and got the Model-T into mass production. Previously individually built, the new method of assembly allowed Ford to drastically reduce the cost to consumers and build many more cars in a short amount of time. This meant that the market was flooded with Model-Ts, and by the late 1910s, around 50% of American car owners drove that model. A few years prior, William Durant had established General Motors, and the first Dodge Model 30 was built in 1914. The car industry was officially established!

The early 1920s were a time of great economic prosperity, and so the auto industry boomed as more and more people bought cars. Several other car companies were founded in the first half of the decade – the best-known being Chrysler, founded by a former General Motors executive. By the time of the stock market crash in 1929, more than five million cars a year were being sold. But then came the Wall Street crash and following that, the Great Depression.

As with all industries, car manufacturing struggled hugely during the early part of the 1930s. People simply didn’t have the money to spend on luxuries such as cars or fuel. Many were unable to put food on the table or clothes on their backs. However, because so many car companies went bust during this decade, by the end of it, the industry had pretty much consolidated into three major car manufacturers, which quickly became known as the ‘Big Three.’ They were General Motors, Ford, and Chrysler. The 1930s also saw the advent of the first automobile workers’ union, which was founded in 1935.

Just as America had recovered from the Great Depression, they were flung headlong into WW2 when, in December 1941, Pearl Harbor was bombed. By 1942, the American government had taken over all car factories for use by the armed forces, including all the equipment and materials in those factories. People could only buy a car if they really, really needed one, and they had to prove why it was necessary, or the answer was a straightforward ‘no.’ This meant that the domestic automobile industry essentially came to a complete standstill, but the war did bring an unexpected advantage. The technological advancements that were made in creating new vehicles for the army meant that when the domestic industry did start up again, it was better than ever. And it exploded.

You only need to look at some of the cars produced in the 1950s to see that the industry was booming. Slick designs, chrome trims, and cool colors were the order of the day, and the simultaneous boom in freeway building only helped the car become an intrinsic part of the American way of life. It was time to finally start thinking about safety. That’s right, up until this point, the seat belt simply didn’t exist. In fact, it wasn’t until 1964 that cars first had seat belts, with Studebaker-Packard the first car manufacturer to begin fitting seat belts as standard.

Among the other things that car manufacturers of the 1950s and 60s weren’t concerned with (which seems crazy to us now) was fuel efficiency. Car drivers of the time wanted their cars to be big, fast, and powerful, and simply didn’t know or care how much fuel they were burning. Eco-friendly, these cars were not! However, by the 1970s, the US was undergoing a huge oil supply crisis, and car manufacturers were forced to attempt to come up with something that burned less fuel, albeit temporarily. Chrysler and General Motors both downsized operations, with General Motors receiving a government bailout in 1979. Once the oil problems were over, they pretty much went back to exactly what they were doing before. However, cars made elsewhere in the world were already becoming much more popular, and American manufacturers struggled to keep up.

By the 1980s, the US economy was booming again, and people were infinitely more connected to the rest of the world than ever before. As the globe became more accessible, American car manufacturers realized that they could further reduce their production costs by outsourcing production to factories in the rest of the world. This meant that during this decade, a lot of car manufacturing was moved out of the United States to countries such as India and China, before being exported around the world. This decade also saw foreign car manufacturers make significant inroads in America, with cars imported from Japan particularly popular. Seeing this, the American government placed export limits on these manufacturers in an attempt to protect domestic production, but many Japanese manufacturers simply imported smaller amounts of higher-spec models, maintaining a good profit margin that way. Domestic production did survive, thanks to innovations such as fuel injection technology and more stable oil prices for much of the decade, but the overall picture was forever changed.

In the 1990s, foreign manufacturers had a significant foothold in the American market, and the decades-long dominance of the Big Three was in terminal decline. By the 1990s, the Big Car was all the rage, with huge four-wheel-drive SUVs, by far, the most popular type of vehicle. However, it didn’t last long. Increasing concern about the negative impact of emissions on the environment, and the legal restrictions that came with it, meant that car manufacturers were forced to innovate and build more eco-friendly models. By the end of the decade, the first ‘hybrid’ car had been produced – running half on gas and half on electricity.

Another financial crash, this time in 2008, again caused a significant downturn in car purchasing. As in 1929, people simply couldn’t afford to buy a car, especially the huge, flashy cars that were so popular at the time. Fuel also became incredibly expensive around this time, so most people wanted a car that was smaller and more efficient, and this remains true to this day.

The crash of 2008 had a significant impact on the American automobile industry, and it has been slower to recover. The Automotive Industry Crisis of 2008, lasting until 2010, devastated two members of the Big Three. Both General Motors and Chrysler required government bailouts. Chrysler eventually declared bankruptcy, with partner organization Fiat assuming more control over the company as a result. Rising oil prices also contributed to problems for the Big Three.

However, there are positives. Hybrid cars and fully electric cars are surging in popularity, as customers look for the eco-friendliest option. This means that the American automobile industry is likely changed forever, and the domestic manufacturers are unlikely to ever regain their former status as powerhouses of production.

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