John Dodge and his younger brother Horace were inseparable as children growing up in Michigan. Little changed in adulthood. Their father ran a machine shop and both took an interest in the trade from a young age. Their skills led them to start a bicycle company in 1896, which they later sold. With the capital they started a printing machine company in Windsor, Ontario, but this too would soon be sold. They returned to Detroit, where they’d spent many years in their youth, to start a machine shop. It wasn’t long before they found themselves overloaded with orders from many of the city’s new automobile businesses.
An order placed to the Dodge Brothers for 3,000 Oldsmobile transmissions caught the attention of one Henry Ford. After Ford, on the third attempt, launched a car company, he too went to the brothers for machining needs. The brothers were tasked with making engines, transmissions and axles for the earliest Ford autos. At first Ford was unable to pay fully in cash, but John and Horace accepted $10,000 in stock in the young company in trade for their services. Their partnership was integral to Ford’s success. With the introduction of the Model T in 1908, the brother’s work only got busier and their pockets fatter. Around the same time they began to dream of a car of their own.
The Dodge Brothers leave Ford Motor Company
Though John and Horace owned significant stock in Ford, they knew that they would need to cut business ties in order to pursue their own automotive venture. It was on this day in 1914 that the last Ford parts left the Dodge Main factory in Hamtramck, Michigan, just outside Detroit. Just two days later they incorporated Dodge Brothers Inc. With all of the experience they had gained in the automotive sector they were able to build their own car in a relatively quick manner. On November 14, 1914, the first Dodge Brothers touring car left the factory. Within a year Dodge would be the third biggest automaker in the United States.
In 1919 Henry Ford was able to purchase the Dodge Brothers’ remaining Ford stock shares for $25 million. When you add the $5.4 million from dividends and $1.7 million from contract profits, all in they earned $32.1 million off their original $10,000 investment in the company. Unfortunately, they would not live to enjoy the wealth for long.
In 1918 a flu pandemic was sweeping the nation. The disease did not care about wealth, or any humanly attributes for that matter, as John Dodge found out. He contracted the disease and died in January 1920. Horace fell sick with the flu the following December and suffered a similar fate. With John and Horace dead, their widows were given control of Dodge Brothers Inc. In 1925 the women penned a deal to sell the company to Dillon, Read & Co, investment bankers, for $146 million, about $1.7 billion in 2020. Only three years later the company sold again, this time to Chrysler, where it remains today.
I really like what you guys are doing here. The Dodge Brothers were much smarter than most of the other Ford partners. For the first bach of cars the agreement was they were to recieve payment or Ford would turn over all assets and the car parts would become Dodge Brothers property. Ford offered a 10% stake in the company instead of payment on the first shipment of parts. Dodge had spent $60,000 tooling up for this project. The Dodge Brothers recieved dividens from their stock some times reaching millions of dollars per year. When Ford stopped paying dividens in order to open the Rouge plant Dodge sued. A judge asked Ford what money he had put into the company early on. He said zero. The Brothers were award past dividens. When the brothers sold their Ford stock and sold shares in their new company they had as much capital as Ford.