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Today In History: Birth of Kaiser-Frazer Auto Company

Posted in auto industry, Jeep by Suzanne Denbow | July 25th, 2008 | 1 Response |

On July 25, 1945, the Kaiser-Frazer automobile manufacturer was born. The namesake of its co-founders, Henry Kaiser (of Kaiser Industries) and Joseph Frazer (pre-WWII president of defunct Graham-Paige Motor Co.), Kaiser-Frazer was one of the only post-war independent automobile company success stories, albeit a brief one.

With ample funding from both private investors and labor unions who were encouraging competition with The Big 3 (alternatively known as “The Detroit 3” – Chrysler, Ford, GM), Kaiser-Frazer leased the Ford Willow Run Plant in Michigan and officially began production. Initially an astounding failure, during their inaugural year in 1946, Kaiser-Frazer produced 11,000 cars, posted a $19 million profit loss, and watched its stock value nosedive. When financial backers began to express doubt in the wisdom of investing so heavily into a small, fledgling corporation that was attempting to take on the nation’s three largest, most successful automobile manufacturers, Kaiser-Frazer began working tirelessly to turn their ship around.

Successfully achieving that end, in 1947, only a year after their first catastrophic failure, Kaiser-Frazer managed to produce 100,000 cars, and simultaneously post a profit gain of $19 million. With shareholders momentarily convinced to keep them afloat, Kaiser-Frazer entered into its third year of production in 1948 and again pulled in a profit, but this time the tune of only $10 million. The sizable profit decrease served as a red flag to K-F’s financial arm, and news that new model releases from The Big 3 were on the horizon frightened investors enough for them to abruptly withdraw nearly all financial support.  With no money with which to fund new production, K-F posted a $30 million loss in 1949 and forced a defeated Joseph Frazer to throw in the towel, leaving his partner, Henry Kaiser, to fend for himself.

Changing the name to simply Kaiser Motor Corporation, Henry Kaiser managed to accept the daunting task of maintaining a nearly-bankrupt automaker until 1953 when financial hardships facilitated the merge of Kaiser with Willys-Overland. Now operating under the name “Willys Motor Corp”, the controlling powers that be made the executive decision to cease production of passenger cars and instead focus on a novel new line of automobiles known as “utility vehicles,” or “Jeeps.” Throughout the course of the next decade, the Jeep experienced a phenomenal amount of popularity, both with the commercial market and, most notably, with the U.S. government. By 1963, the name “Willys” was phased out from the Jeep line and replaced simply with “Kaiser”. It wasn’t until Kaiser-Jeep was purchased by American Motor Corporation in 1970 that the famous line of utility vehicles became officially known simply as “Jeep.” In 1987, Jeep was finally purchased by current owner, Chrysler LLC, and despite recent financial struggles, has still managed to cement its legacy as the oldest and most successful sport utility vehicle in production.

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  1. Robert Becker says:

    Lots of fascinating history. The Kaiser-Frazer was of particular interest because my father owned on and years later after buying a new Cadillacevery year, he would brag about the Frazer and how he could drive forever, pulling a 30 ft Mobile Home at 70 MPH from New York to Florida without any mechanical problems. I still remember the push button doors.