THE WILLYS DEAL AND THE SALE OF WILLOW RUN
After merger discussions with the Atlas Corporation and the aircraft company Consolidated Vultee (a.k.a. Convair) came to nothing, Edgar Kaiser announced in March 1953 that Kaiser-Frazer would purchase another independent automaker: Toledo, Ohio-based Willys-Overland, the company of which Joe Frazer had once been president.
Buying Willys was a curious move considering Kaiser-Frazer’s precarious financial position and the fact that Kaiser-Frazer didn’t have anything close to the $62.4 million Willys-Overland chairman Ward Canaday was asking for his company. Executing the purchase involved some convoluted financial maneuvering: Through the Henry J. Kaiser Company, the Kaisers, the Transamerica Corporation, and Bank of America financed a new Kaiser subsidiary with the funds necessary to purchase Willys. After the purchase was completed, the subsidiary was renamed the Willys Motor Corporation while Kaiser-Frazer officially became Kaiser Motors, sweeping away the last vestiges of the original partnership with Joe Frazer.
Willys-Overland was not an obvious merger choice. Willys’ own recent automotive venture, the compact Aero-Willys, had fared no better than Kaiser’s. However, Willys had remained profitable thanks mainly to Jeep. Although Jeep was not yet the commercial bonanza it would later become, it had solid military sales and enjoyed a modest but stable consumer niche.
More importantly, the Willys factory in Toledo was far more appropriate for Kaiser’s production needs than Kaiser-Frazer’s massive Willow Run plant outside Detroit, a former bomber factory that K-F had leased in September 1945 and later purchased. Impressive as it was, Willow Run had far more capacity than Kaiser-Frazer had ever really needed and it was rapidly becoming unaffordable, particularly in the face of new United Auto Workers (UAW) demands for wage parity with Ford’s equally colossal (but much more fully utilized) River Rouge plant.
The Willow Run problem was becoming more acute as Kaiser-Frazer’s defense business crumbled. Trying to balance aircraft and automobile production in the same plant with substantially the same workforce had been cumbersome and expensive, exacerbated by a flood of USAF-requested design changes to the C-119 Flying Boxcar Kaiser was building. The resulting cost overruns became the target of several voluble Congressional Republicans and led to a 1952 Air Force inspection. In June 1953, Congressional hearings on the matter painted the company in a negative light. With the Korean War nearly over anyway, the Air Force finally canceled Kaiser-Frazer’s C-119 contract.
Soon afterward, Kaiser Motors laid off all of the 2,600 workers at Willow Run and began the move to Toledo, which was completed by September. Edgar Kaiser initially described the move as temporary, but with the loss of the Air Force contracts, there was really no way Kaiser could afford to restart production at Willow Run. Later that year, Kaiser Motors sold the plant to General Motors, which quickly retooled it to replace the Hydra-Matic plant in Livonia, Michigan, that had burned down in August. Kaiser used the $26 million purchase price to pay off part of the company’s outstanding Reconstruction Finance Corporation loans.
KAISER’S LAST STAND
Considering all this chaos, it’s little surprise that Kaiser’s 1953 sales were even worse than 1952’s. The lack of a V8 engine had also become an insuperable problem. If the Kaiser had been a low-priced car, the situation might not have been as bad — Chevrolet, Plymouth, and Pontiac didn’t get V8s until 1955 — but the Kaiser Manhattan was priced within a few dollars of Buick’s popular long-wheelbase Super Riviera sedan and and cost almost $200 more than an Oldsmobile Super 88, both of which enjoyed greater prestige and V8 power.
To make matters worse, most mid-price rivals now offered fashionable hardtops while Kaiser had only two- and four-door pillared sedans. (Kaiser-Frazer stylists had designed both hardtops and convertibles, but they didn’t make it to production.) Kaiser again ended the year with many unsold cars and recorded a net loss of $27.1 million.
As before, Kaiser was obliged to repackage and re-serial some leftover 1953 cars and offer them alongside Kaiser’s actual 1954 models. The true 1954 Kaisers had updated styling and were considerably glitzier than before, featuring acres of chrome, a Buick-like concave grille, a fake hood scoop, and rather extravagant “Safety-Glo” taillights. There was still no V8 engine, but a McCulloch centrifugal supercharger was now optional, boosting power to 140 hp (104 kW). The supercharger gave the Kaiser more reasonable performance — 0-60 mph (0-97 km/h) in around 15 seconds — but it was still not a V8 and the supercharger could be troublesome. (Incidentally, this was an earlier version of the same McCulloch/Paxton supercharger later used on the Studebaker Super Lark.)
Hoping to spur customer traffic, Kaiser launched its first sports car, a fiberglass-bodied convertible called the Kaiser Darrin. Developed by Dutch Darrin in 1952 as a spec project, the Kaiser-Darrin used a Henry J chassis and engine, but had a unique interior and Darrin’s patented sliding doors. It was an interesting piece, but it was neither particularly fast nor especially practical. With a list price of $3,668, the Kaiser Darrin was also very expensive and Kaiser dealers were reluctant to order them. Production ceased after only 435 had been built and Dutch Darrin later found about 100 unsold cars languishing outside the Willys plant.
New sales chief Roy Abernethy (later to become chairman of AMC) tried hard to revive Kaiser sales, but without success. High prices, ferocious depreciation, and the company’s uncertain future made a new Kaiser a dubious value. Total 1954 sales were only 7,039 and the company ended the year with a $14.5 million loss.