February 2, 2010

Myth buster: Henry J. Kaiser and the Jeep

Kaiser Pink Jeep Surrey was a line of Jeeps in the 1960s

Kaiser at wheel of a Jeep

Many people think Henry J. Kaiser’s foray into the automobile business after World War II was a failure when his Kaiser automobiles disappeared from America’s roads after only a few years. If you are one of them, think again. Indeed, if you drive a Jeep or the next time you are sitting at a traffic light next to a Jeep, think Henry Kaiser.

The Jeep was Kaiser's most successful automobile venture when, in 1953, he bought Toledo-based Willys Overland, maker of the Jeep that became world-famous with its service in World War II.

Willys Overland was the maker of engines for Kaiser’s “Henry J," America's first compact car. Kaiser had entered automotive manufacturing in 1946, but by 1953 he was losing money. So when he bought Willys Overland that year for about $70 million in the biggest auto merger in history to date, some argued he was throwing good money after bad.

Not the case. As Patrick R. Foster concludes in his book “The Story of Jeep” (Krause Publications, Iola, WI, 1998), “There were several reasons why Kaiser wanted Willys, but the biggest was pride. Henry Kaiser had never failed at anything he tried, but it appeared that the auto business would break that streak.”

What followed was an all-out marketing campaign to capitalize on the public's fascination with the Jeep. Kaiser's faith in the Jeep began paying off. Annual sales volume topped $160 million within two years, with a profit approaching $5 million. It was the first profit for Kaiser's car manufacturing since 1948.

Man seated in a showroom with miniature model jeeps seated and examining an illustration
Designer José Ramis Melquizo at work at Kaiser Willys do Brasil in the late 1950s.

By 1966, Kaiser Jeep Corp. was building sports and compact cars, stationwagons, and the Jeep Wagoneer, which some say was America's first SUV. Where there had been one plant in Toledo, manufacture of the Jeep had spread to 32 other countries by the time of Kaiser’s death in 1967.

Five years after Kaiser died, Kaiser Jeep Corp. was sold in 1972 to American Motors. A few years later, Renault Company of France bought American Motors.

In 1987 Chrysler Corporation bought American Motors from Renault for the sole purpose of getting the rights to manufacture the Jeep. Lee lacocca, like Henry Kaiser before him, capitalized on America's love for the ubiquitous, 'go-anywhere' Jeep.

So while Henry Kaiser is mostly remembered today for co-founding Kaiser Permanente, you can also thank him for making the Jeep a popular American car around the world.

(Photos: The Bancroft Library, University of California, Berkeley and the Kaiser Permanente Heritage Archive)