In the early 20th century, the automotive industry was a landscape of innovation, rivalry, and unexpected turns. One such twist of fate occurred on February 4, 1922, when Henry Ford’s Ford Motor Company acquired the struggling Lincoln Motor Company, marking a pivotal moment in automotive history.
The roots of Lincoln trace back to the visionary mind of Henry Leland, the man behind the creation of the Cadillac in 1902. Initially hired by William Murphy and his partners at the Henry Ford Company to appraise assets before liquidation, Leland saw potential where others saw failure. Advising against dissolution, he proposed reorganization and the development of a new car powered by a single-cylinder engine originally designed for Oldsmobile. The result? The birth of Cadillac.
Leland’s impact extended beyond Cadillac, influencing modern manufacturing principles and earning recognition from industry giants like Alfred P. Sloan. However, in 1909, he sold Cadillac to General Motors for $4.5 million. The deal allowed him to stay on as executive. During his continued tenure, he helped develop the automatic electric starter in partnership with Charles Kettering, and oversaw a vast number of other engineering feats.
The origins and sale of Lincoln Motor Company
However, when Cadillac received request from the US government to build aircraft engines during World War I, General Motor’s founder William Durant said no, citing his position as a Pacifist. Leland did not take kindly to this decision and in 1917 he left Cadillac, accepting a $10,000,000 government contract to form a new company to build the V12 Liberty aircraft engine. Lincoln Motor Company was born. Post-war, Lincoln underwent a transformation, retooling its plant to manufacture luxury automobiles, with its first V8 engine drawing inspiration from the Liberty engine’s design. in 1920, the first Lincoln car, the Model 8, started to roll out of the factory.
In 1922, Lincoln faced financial difficulties and Leland found himself at the mercy of Henry Ford. Ford’s bid of $8 million during a receivers’ sale secured the company, being the only bid offered. Ford, initially offering $5 million, saw that bid turned down by a judge, who cited it too low. It’s believed Ford deliberately low-balled the bid for the company with a worth conservatively estimated at $16 million as revenge for Leland’s connection to the founding of Cadillac. In the end, Ford paid $8 million to acquire Lincoln.
Post-acquisition, tensions arose as Ford aimed to streamline production and halt Lincoln’s financial hemorrhage. Relations between the Henry Ford and Leland workers soured, leading to a dramatic juncture on June 10, 1922. Ford executive Ernest Liebold, backed by Henry Ford’s authority, requested the resignation of Wilfred Leland, Henry Leland’s son. Facing the inevitable, both Henry and Wilfred Leland resigned, departing from the factory they had created.
Yet, this chapter wasn’t the end for Lincoln. Under Ford’s wing, the luxury marque endured, continuing to be a prestigious part of the Ford lineup to the present day. The acquisition, marked by tensions and transitions, ultimately contributed to the lasting legacy of Lincoln within the automotive world.