Like the Dow, the classic car market woke up from its recession-induced hibernation around 2011-12.…
90 years ago, the stock market crash marked the beginning of the end for these automakers
It was the best of times, it was the worst of times. While admittedly pilfering the opening line of Charles Dickens’ Tale of Two Cities, there is no better way to describe the United States in the days leading up to, and immediately following, Black Tuesday.
Ninety years ago today, on October 29, 1929, panicked Wall Street investors traded some 16 million shares on the New York Stock Exchange in a single day. Two months after wild speculation had pushed the market to its peak in August ’29, and less than one week after stock prices began to tumble, the unthinkable happened: the market crashed.
Billions of dollars were lost. Individuals and businesses were in financial ruin. The Great Depression, the worst economic downturn in the history of the civilized world, lasted nearly a decade.
No American was spared, no industrialized country excluded from the misery. The automotive market was hit particularly hard—right on the heels of its rise to world prominence.
According to The Industrial Revolution in America (2006), by Kevin Hillstrom and Laurier Collier Hillstrom, “By the end of the 1920s, there was approximately one motor vehicle for every six people in the United States. In 1929 alone, more than 5.3 million passenger cars, buses, and trucks were sold across the country—nearly one million more than had been sold a mere year earlier. These figures not only confirmed the automobile industry as a major force in American commerce and culture in its own right, but provided testimony to the industry’s importance to other industries.”
To be sure, the success or failure of the auto industry affected people and businesses in numerous related trades: oil, rubber, steel, glass, leather, hardwood, tool and die operations, and service stations, as well as every business that catered to workers in those fields—from financial institutions to local restaurants and pubs. As the Hillstroms point out, the Depression also put a halt to a rapid expansion of highways, commercial development, and residential housing.
In 1930, automobile sales declined by two million from the previous year and fell another two million by 1932. Since unemployed people don’t buy cars, the workers who built them soon faced the same situation. The Ford Motor Company, for example, employed 128,000 people in the spring of 1929 and by August 1931, only 37,000 were still employed there. Since carmakers were forced to cut corners whenever possible during those lean years, that meant longer working hours and less pay. Feeling unappreciated, many Ford workers pushed to unionize, a suggestion that infuriated Henry Ford. He so fiercely opposed the idea that he employed a “security force” to silence the disgruntled workers, who he felt should be grateful they had a job at all. It was a battle that Ford and the auto industry would ultimately lose; the United Auto Workers was founded in May 1935.
Despite diminished auto production, some historians marvel that the industry weathered the storm as well as it did. “Perhaps the really extraordinary fact is that so many [automobiles] were sold,” Philip Smith wrote in Wheels Within Wheels: A Short History of American Motor Car Manufacturing (1968). “On the average, the per capita income had been slashed just about in half. Hundreds of thousands of people who did have jobs were not sure they would have them tomorrow. Few were inclined to tempt fortune by purchasing a new car. Prosperity had been ‘just around the corner’ for a long, long time, and there was widespread suspicion that the distance to the corner might be lengthening, as indeed it was.”
Small automakers were hit hardest, of course, since they had limited capital and little margin for error. Among the car builders, both big and small, that succumbed to the Great Depression were Peerless (1931), Cunningham (1931), Doble (1931), Durant (1932), De Vaux (1932), Marmon (1933), Franklin (1934), Auburn-Cord-Duesenberg (1937), Pierce-Arrow (1938), Stutz (1939), and Hupmobile (1939).
Only the strongest survived, and that meant The Big Three—General Motors, Ford, and Chrysler—as well as Hudson, Nash-Kelvinator, Packard, Studebaker, and Crosley. None of those non-Big Three automakers still exist today. Surprisingly, three brands born in the late ’20s also managed to keep their heads above water in the ’30s, but all folded decades later: Pontiac (1926–2010), DeSoto (1928–61), and Plymouth (1928–2001).
Today, most of us are more familiar with Black Friday than Black Tuesday, and for good reason: To most Americans, the day after Thanksgiving marks the unofficial start of the holiday season. October 29, 1929, on the other hand, was the unofficial start of a decade of hardship in the auto industry and beyond.