The Auto Industry Has a Rich History of Failure

The American auto industry is facing some tough times and, bailout or not, will eventually have to go through a difficult period of readjustment. But this has all happened before and will likely happen again.

In fact, the dominance of the big three auto manufactures was created by an era of tremendous failure. During the Great Depression, American lost dozens upon dozens of auto manufacturers and fixtures of Americana. The Auburn Automobile Company, Stutz, Pierce-Arrow just to name a few, died slow and painful deaths during that decade and several others that had existed for years closed shop.

Many others, such as Studebaker (later Studebaker-Worthington Corp.), emerged from the Depression as shadows of their former selves. Once a component of the Dow Jones Industrial Average, Studebaker struggled for decades to compete with the more efficient auto-giants and eventually succumbed to bankruptcy.

Before the slim times of the Depression—even during the roaring twenties—hundreds of automobile manufactures started, ran for a few years, and went bankrupt. The Wikipedia list of failed marquees shows just how many tried their hand in the auto-building game just to meet with failure. In fact, from 1910 to 1930 four different auto companies named “Traveler” open, produced cars, and shortly thereafter failed.

Prior to all of this, America was home to countless coachbuilders, companies that made the bodies for carriages and later bodies for automobile. The US was home to legendary coachbuilders such as Brunn, Murphy, and Derham. My father collects many classic cars featuring such bodies. They’re not only works of incredible craftsmanship, but also works of art. Yet all are now gone, absorbed by auto makers, who were later absorbed into the mega-manufacturers of today.

Even in the years since the Second Word War we’ve seen companies start and fail. Many American-market cars were even manufactured outside of the US where labor was cheaper, and still couldn’t make it.  Bricklin, Auto Cub, and Citcar came and went.  The DeLorean—made famous in Back to the Future—lived for only two short years. Nash, a very old marquee, resurrected the Rambler brand (defunct since 1914), and was still bought-out in 1954 by the American Motors Corporation (AMC). AMC went broke a decade later. Geo and Eagle, more recent offering, died in about a decade.

Turns out making a car for profit isn’t all that easy.

So why now are we so surprised by failure now? This is nothing new, and nothing earth-shattering, or economy-shattering. Companies fail, Brands die, but America and the free market go on.