Contrary to the mighty Henry Ford publicity machine’s doctrine, the father of the American automobile and mass production is not he, but Ransom Olds.

Prior Success

Like Billy Durant, Ransom Olds achieved success in another business before venturing into automobiles. Pliny Olds, his father, opened a machine shop in Lansing, developing a line of steam engines to drive pumps and machinery. Ranny, in charge of customer service, implemented improvements to the problems he saw. Soon P.F. Olds & Son prospered and when Ranny added a line of gasoline-fueled steam engines, the firm became one of Lansing’s leading businesses.

Then Ransom Olds saw an internal combustion gasoline engine. He made one and mounted it to a carriage. His dream was ridding the world of horses. Cities had more than two million horses, and the strong odor of their urine and excrement were impossible to escape in the growing cities of the nation, especially in summer. Sanitation departments everywhere were overwhelmed by the mess, made even worse by dying animals left on the streets to rot.

By 1900 Olds designed and produced a few horseless carriages. However, the success of the stationary engine business left Olds no space, time or money to develop automobiles. His father did not believe the horseless carriage was a viable business, so Ransom Olds faced a crossroads: continue with a successful business, or chase his dream.

Ranny chose the dream.

Dreams Cost

However, it meant he had to raise money to buy out his father and capitalize the new business. For that, he had to surrender control.

It was a choice which cost him dearly. Samuel Smith provided the capital for the Olds Motor Works, on condition that the cars be made in Detroit. Fred, one of the sons, did not see eye to eye with Ransom Olds: the quintessential rich kid, his vision was high-end automobiles for the wealthy. Olds knew  success demanded volume, which only a lower priced car would yield. In 1901 the Detroit factory was completely destroyed by fire while Olds visited his retired father in California. The only design saved was the Curved Dash, a small runabout.

Spawning New Businesses

In order to produce the cars customers had ordered, Olds utilized established Detroit suppliers, mainly Benjamin Briscoe’s sheet metal shop, Leland & Falcauner  and the Dodge Brothers, thus giving all three a start in the nascent automobile business.

Things came to a head with Fred Smith and Ransom E. Olds left to start another company. When he called it the R.E. Olds Company, Fred Smith threatened to sue, so he named the new company REO, after his initials. With Albert Champion (pronounced shom-pe-yon) he has the distinction of having an automobile related company bearing his name, and another his initials. (Comeback! has all the details.)

With Ransom Olds gone, Oldsmobile went into decline and REO prospered, becoming one of the top five automakers. Billy Durant initially wanted to include Ransom Olds and REO into General Motors, but that fell through and he settled for the older company. (Oh, by the way, the REO Speedwagon was a real vehicle, not just a band.)

You can see a more detailed history of REO here.