By early 1939, Oldsmobile had built 5,000 preproduction cars with a new version of the AST, dubbed Hydra-Matic Drive. Internally, Hydra-Matic was very similar to the AST, but used a third planetary gearset rather than spur gears for reverse. Two oil pumps, one driven by the engine, the other off the transmission output shaft, provided operating pressure for the control valve body. A fluid coupling replaced the conventional clutch; Oliver Kelley, who was the lead designer and in whose name the patent was filed, dubbed the coupling a “fluid turbo clutch.” The coupling had an unorthodox feature that was to become a Hydra-Matic trademark: To prevent the car from creeping forward at idle, the engine flywheel drove the fluid coupling impeller through the front planetary gearset rather than directly. As a result, the impeller was always turning slower than the engine, reducing creep.
As with the Automatic Safety Transmission, Low range provided automatic shifting between first and second gear. Drive functioned much like the AST’s High range, but the governor had been reworked to shift automatically through all four forward speeds. (The two-three shift was still mechanically complex and tended to be jerky if the bands and linkages were not in perfect adjustment.) There was no clutch pedal and there was no need for manual shifting except to select reverse or neutral.
Unlike the Automatic Safety Transmission, Hydra-Matic was not built by Buick. Because the Hydra-Matic was no longer simply an Olds project, its development and manufacture was transferred in 1939 to the new Detroit Transmission Division, where regular production commenced in May 1939. When the 1940 Oldsmobiles went on sale in October, Hydra-Matic became a regular production option. Remarkably, the starting price was $57, $18 less than the last AST and probably far less than Hydra-Matic cost to build.
Oldsmobile advertising modestly proclaimed the Hydra-Matic to be the greatest technological advance since the automatic starter. For once, the advertising didn’t lie: Hydra-Matic was a paradigm-changing innovation. Whatever its problems — which on early cars included transmission fluid problems, engine surge, and a tendency to abrupt, harsh shifts — Hydra-Matic offered painless, two-pedal driving. For American drivers, who had never been enamored of manual shifting to begin with, Hydra-Matic was a compelling proposition even to customers who’d been burned by previous semiautomatic transmissions.
GM policy at that time was to give its divisions one year of exclusivity on new developments, so Hydra-Matic was only offered on Oldsmobiles in 1940. Buick wanted nothing to do with the new transmission, which its engineers nicknamed “Hydra-Jerk,” but Cadillac added Hydra-Matic to its options list in 1941. Despite higher prices — $100 on Oldsmobiles and $125 on Cadillacs — more than 40% of Olds buyers and about 30% of Cadillac buyers opted for it.
By the time civilian automotive production halted in February 1942, the Detroit Transmission Division had sold more than 200,000 Hydra-Matics. The transmission’s popularity would only increase after the war.
Even as production of passenger cars was winding down, the American auto industry was rapidly converting to military production. The conversion was supervised by William (“Big Bill”) Knudsen, who had been president of General Motors from 1937 to 1940, so naturally GM played a major role in the war effort. (Ironically, 25 years earlier, Cadillac founders Henry and Wilfred Leland had resigned from General Motors after then-president Billy Durant refused to become involved with military production.)
In 1941, the principal U.S.-built light tank was the M-3 Stuart, manufactured by the American Car & Foundry Co. The M-3, which British armor units nicknamed “Honey,” was 14 tons (12.7 metric tons), armed with a 37mm cannon and four 0.30-cal (7.62mm) machine guns. It was powered by a single seven-cylinder Continental W-670 radial engine with 262 gross horsepower (195 kW). By 1942, the Stuart was in service in North Africa and the Pacific theater with the British Army, the U.S. Army, and the United States Marine Corps.
The gasoline-powered Continental engine was in short supply in 1941-42, forcing some Stuarts to adopt less-powerful diesel engines. In late 1941, Cadillac proposed a new M-3 variant, substituting two of the division’s V8 engines for the Continental unit. The two engines were essentially stock Cadillac V8s, each rated at 148 gross horsepower (110 kW) and each driving one tread via a beefed-up Hydra-Matic transmission.
The redesigned tank, designed M-5 Stuart VI, entered production in March 1942. With heavier armor and other modifications, it was around 4,600 lb (2,087 kg) heavier than the M-3A1, but the Cadillac engines gave a comparable top speed. Around 6,800 Cadillac-engined M-5s and M-5A1s were built along with about 1,800 M-8 self-propelled howitzers, which shared the same chassis.
By 1943, it was clear that the M-5 was too lightly armed for the European theater. In April, Cadillac began work on an enlarged version sharing the M-5’s powertrain but trading the 37mm cannon for a 75mm gun, originally developed for use on the North American B-25 Mitchell bomber. The new tank, dubbed M-24 Chaffee, was accepted for production in April 1944 and reached frontline service in November. More than 4,300 were built by the end of the war and some M-24s remained in service until the late 1980s. There were also a number of M-24 derivatives sharing its chassis, engines, and automatic transmissions, including the M-19 gun carriage and M-37 and M-41 howitzer carriages.
Military service brought no dramatic design changes to the Hydra-Matic transmission, but it forced GM to resolve many of its early teething problems. After the war, Cadillac and Oldsmobile advertising would, with some justice, proclaim that Hydra-Matic was “battle tested.” When civilian production resumed in late 1945, Oldsmobile also offered a number of modified cars with automatic transmissions and special controls for use by disabled veterans.
Hydra-Matic really took off during the postwar boom. Buick and Chevrolet still disdained it, opting to develop their own torque converter automatics, but Pontiac adopted Hydra-Matic in 1948. It was enormously popular, despite its cost. Hydra-Matic cost $158.50 on Pontiacs and $174.25 on Cadillacs — more than $1,500 in modern dollars — but 78% of Pontiac buyers and over 95% of Cadillac buyers opted for it anyway.
By 1949, it was apparent that not only was automatic transmission a marketing advantage, lacking an automatic was a serious competitive handicap. While Hydra-Matic was never the smoothest of transmissions under the best of conditions and imposed penalties in both performance and fuel economy, many customers didn’t care. Critics like Mechanix Illustrated reviewer Tom McCahill disdained automatics, but American buyers were willing to accept the drawbacks if it meant not having to shift.
Other automakers were soon forced to follow GM’s lead. Ford and Studebaker turned to Borg-Warner to develop a three-speed torque converter transmission, while Packard introduced its in-house Ultramatic in May 1949. Chevrolet launched its first Powerglide transmission late that year for its 1950 models.
The Detroit Transmission Division built its 1 millionth Hydra-Matic in 1949. Not satisfied with that volume, GM began signing contracts to sell Hydra-Matic to automakers who couldn’t afford to develop their own automatics. The first customer was Nash, followed by Hudson, Kaiser-Frazer, and, curiously, Lincoln. Although Lincoln was owned by Ford, the new Borg-Warner-developed Fordomatic/Merc-o-Matic did not have sufficient torque capacity for the big Lincoln V8, so Lincoln-Mercury was obliged to buy its automatic transmissions from GM. Most users didn’t bother to conceal the Hydra-Matic’s GM origins, happy to take advantage of its reputation and name recognition.
With so many new customers, it took GM less than three years to sell another million Hydra-Matics, making it the most successful automatic transmission in the world.