it's 1887 and two brothers arrive in Detroit with nothing more than their Ambitions and each other a few years later and they're operating one of the biggest machine shops in the city working for the man who would forever shape the future of the automotive industry Henry Ford but what many people don't know is that the brothers were really the ones who helped make the Ford Company into a massive success building almost every component of their vehicles with the highest quality possible without them the model T wouldn't exist and the Ford Motor Company would not be what it is today yet despite their legendary achievements they've remained obscure figures their legacy is hidden in the massive shadow of MrHenry Ford their partnership with Ford would later turn into a rivalry when the brothers decided to open their own car company and join the competition in the automobile Market at one point rising to become the second best-selling car company in the U. S behind none other than their business partner turned rival however this is where the brothers luck fell apart leaving behind a legacy that few seemed to recognize despite leaving their names on millions of automobiles around the world this is the tragic story of the Dodge Brothers this video is made possible thanks to the Daily upside my favorite business newsletter in the 1860s John and Horace Dodge were born and raised in the small town of Niles located in the deepest southwest corner of Michigan there their father ran a machine shop alongside his two brothers where they built and maintained boat engines growing up in Niles John and Horace were taught to be hard workers and never complain about their economic situation according to them their childhood wasn't easy in those days we were the poorest kids in town when cold weather came Horace and I were obliged to go barefooted and wear ragged clothes we didn't Grumble but tried to make mother think it was all right this humble beginning seems to have brought the red-haired Brothers together as partners rather than set them apart as Rivals and despite the four-year age difference between them they shared the same strong initiative and work ethic from a very young age and took on any jobs they could to support their family however in 1882 the Dodge family had to relocate first from Niles to Battle Creek and then again later to Port Huron after the collapse of the family's business as teenagers John and Horace began working alongside their father at the Upton manufacturing company which specialized in steam engines and threshing machines it was here where the two brothers mastered the trade of a skilled machinist and gained invaluable experience working with Iron and Steel these duties quickly turned into a passion for the young men as they fell deeply in love with their trade however John the older brother wasn't satisfied staying at Port Huron and decided he wanted to search for better opportunities outside of the small City they lived in thus after turning 21 and with just 50 cents in his pocket John packed his things and headed off toward one of the most prominent industrial cities of that time Detroit foreign in Detroit in 1886 John Dodge began working at Murphy Ironworks a manufacturing company that specialized in Steam boilers for stationary and Marine Engines earning 16. 50 a week A year later Horace Dodge also arrived in Detroit and as expected Jon quickly got his younger brother to work with him earning 13.
50 a week although the brothers enjoyed their job the heavy work in a smoke-filled shop might have been a factor in John developing tuberculosis one of the two leading causes of death at the time John's diagnosis scared the family and left him unable to work for a few months during which time he reportedly drank large quantities of medicine in order to recover in particular a drink called Elixir 130 which contained 42 percent alcohol according to the Dodge family this increased his dependency for alcohol and led to his half of heavy drinking ever since a reputation the brothers would carry throughout their careers Horus on the other hand had to take on a second job in order to take care of both himself and his older brother his new job would bring him in contact with a man named Henry Leland who would later go on to establish both Cadillac and Lincoln MrLeland brought his high standards of precision machine work to the city of Detroit and there's no doubt Horus gained valuable experience in his time there working with him once Jon recovered from tuberculosis the brothers agreed to find a new job that was safer and cleaner so that their work would never jeopardize their health again this led them to work at the Dominion typograph company in 1892 which was located across the river in Windsor Canada there John and Horace manufactured typesetting machines and learned how to use special tools that allowed for greater Precision in their process of making machine parts it was also during their time in Canada that the brothers would make their first documented entrance into the transportation industry when Horus invented a four-point bicycle ball bearing his Innovative design had the advantage of not only being dust free but also offering a smoother ride with minimal effort following the success of his invention the red-haired Brothers partnered up with one of their managers from the typograph company Fred Evans and the three of them went on to establish the Evans and Dodge Bicycle Company in 1897 using their patented bearing this Venture became a huge success in the market largely due to Fred evans's strong salesmanship skills he would travel to exhibitions and cycle shows around the U. S displaying their bikes making theirs one of the few if not the only Canadian bicycle companies to do so the company's sales immediately soared so high and so quickly that by January 1898 they were already making plans to expand their branches in London Ontario and Montreal however Fierce competition in the bicycle industry at the close of the 19th century would seriously threaten the future of their company although the brothers Still maintained good jobs and royalties from their patented bearing design they decided it was time to move on from the bicycle industry and search out a new and different Venture they sold their shares in the company for seven thousand five hundred dollars returned to Detroit and used the money to establish their own machine shop which they named Dodge Brothers in the year 1900 little did they know this decision was about to change the whole American car industry and the rest of the world foreign the story of the Auto industry and the American economy at large is a story of competition for the latest information and Technology however with today's click bait headlines and information overload it's never been harder to find quality news that's why I read the daily upside a totally free business newsletter that happens to be the sponsor of today's video The Daily upside aims to enhance your investing knowledge by offering valuable insights into the significant people and events impacting our world every weekday they deliver a morning brief followed by more detailed stories that are shaping the business world it's something I myself along with a million other investors get delivered to their inbox every morning just recently they published a great piece examining NYC reasoning behind their recent lawsuit against Hyundai and Kia arguing the cars are an easy steal which sparked viral tick tocks and clarifying the impact on the car company's financial and consumer trust as someone who needs to stay on top of the news to make videos like this I cannot recommend the daily upside enough the best best thing about it it's totally free so just click the link in the description below to sign up if you don't love it you can always unsubscribe at any time now back to the story foreign at the time they opened their machine shop John was nearly 36 years old while Horus was 32. the brothers brought in some of the most advanced equipment they could find gathered a team of 12 people and began building and repairing just about any type of machines people would bring into their shop such as farm equipment stoves pipe setting machines and stationary engines in less than three months they quickly established their business as the best place where close and accurate machine work could be done and customers came flocking to their shop from every corner of the state a newspaper in Detroit even described their store as the most thoroughly equipped and up-to-date in the city however despite the good reputation they'd earned it still didn't stop the brothers from facing certain problems in the beginning at the time they usually dealt with small companies and these companies would often fall behind on their payments due to their limited budgets but all that would soon change when the brothers were approached by a man named Ransom Eli olds to help him produce parts for his automobile company olds Motorworks Mrolds was one of the first men to establish an automobile Factory in Detroit and had big plans to distribute his cars to the masses he created and patented the assembly line in 1901 allowing his car manufacturing company to increase their output by a much larger degree after hearing about the Dodge Brothers shop he tasked them to supply engines and transmissions for his model R curved Dash which was a light reliable and relatively powerful vehicle for its time the brothers were able to deliver their parts in great quality and by the end of its first year the curved Dash had turned into a commercial sensation after securing hundreds of sails becoming the first American gasoline car to sell in significant numbers by 1902 their car's production increased to 2 500 units and this boost to their business was enough to help the Dodge Brothers move their operations to a bigger space in the city their partnership with the olds Motorworks or Oldsmobile as it later became known quickly made them wealthy while also establishing themselves as good and reliable car manufacturers it's worth mentioning that the brother's success wasn't just down to their talents as skilled machinists but also a combination of their hard work and great rate management the experiences they gathered from working at several precise manufacturing plants as well as running a prominent Bicycle Company in Canada really gave them the resources and knowledge they needed to run a business effectively the Dodge name soon became synonymous with quality and reliability and this would bring them to a man who would change their fortunes forever and together they would reshape the entire Automotive world that man was Henry Ford foreign 1902 39 year old Henry Ford was making his third attempt to launch an automobile company after failing in his first two Ventures he was looking for someone who could help him build parts for his new automobile company and that's when he heard about the Dodge Brothers so he went to check out their shop in person and after meeting them face to face Henry was so impressed with their work that he immediately offered them a contract and the promise that the brothers would create more automobiles with him than what Oldsmobile could ever hope to produce however this was back in 1902 and Ford had yet to become the automotive genius we know today rather he had a reputation for losing money something the Dodge Brothers already knew quite well enough about despite knowing the risks of working with MrFord the brothers turned down a renewal contract from Oldsmobile in 1903 which would have been the much safer choice and gambled that their partnership with Ford would ultimately seed to kick-start their partnership they agreed to supply Ford with 650 sets of running gear which is basically a working automobile without tires wheels or a body at 250 each however MrFord had relatively little cash on hand and while the brothers came through on their deliveries Ford often missed his payments which frequently upset John and Horace so much so that the two brothers threatened to sell the machines elsewhere as outlined in their contract but as tempted as they were the brothers settled down and figured out a better way to do business John and Horace proposed to write off the seven thousand dollars that Ford owed them and even give him an additional three thousand dollars all in exchange for 10 stock share in the Ford motor company as well as all of Ford's Assets in the event that the company went bankrupt Henry hated their proposal and tried to counter back with a different offer but knowing his back was against the wall he agreed to their terms and the Dodge Brothers proceeded to work as usual while their relationship with Ford didn't exactly get off to a great start it eventually proved to be fruitful for as long as it lasted the decision to acquire 10 of the Ford Motor Company was a genius move for the brothers as they earned substantial profits from the dividends of their stocks which skyrocketed almost immediately the Dodge Brothers also made a tremendous amount of money from manufacturing the major components of every Ford Model between 1903 to 1914 including the legendary Model T although Ford was not the inventor of the assembly line that title goes to MrRansom olds Henry did improve the concept by using the moving platforms of a conveyor system using this method they could produce a car every 90 minutes upon its release the Model T sold millions of units quickly becoming the biggest car production model in the world so much so that by 19 1914 it's estimated that 9 out of every 10 cars in the world were Fords the brothers had grown their employee network from 120 to over 5 000 workers and had effectively made themselves the largest supplier of Automotive Parts on the planet they became extremely rich acquiring land yachts and massive Mansions however while the two brothers had climbed their way up earning themselves a spot among the wealthiest men in the city their peers from Detroit's High Society wanted nothing to do with them you see John and Horace were known for hanging out with their employees after hours hitting the bars and getting drunk next to the same people who built their machines they also had a reputation for getting into fights at local bars and restaurants this made them unsuitable in the eyes of Detroit's Elite class and they were turned away from clubs and Symphonies although the brothers didn't really care what people thought of them they didn't like to be told where they could or could not not go so what did they do they assumed the financial liability of the Detroit Symphony and welcomed themselves into their Club gradually buying their way into the Elite Class on another occasion Horus was denied membership from the prestigious Gross Point Country Club in response to this he bought the property next to the place and built a huge and extravagant mansion with a 12-car garage facing the club all in an effort to make as much noise as possible annoy the guests and quote make the club look shabby it seemed like the once poor kids from Niles were on top of the world and as self-made millionaires in a rising industry they could not have asked for more however they were just getting started because they were about to go on to accomplish something even greater founding one of the biggest car companies on the planet while the partnership between Henry Ford and the Dodge Brothers made them all very successful it was always clear that both parties would eventually part ways Ford had been looking to rid himself of the brothers while John and Horus had also grown weary of working for a man whose arrogance and stubbornness often irritated them for years the brothers had given Ford detailed suggestions on how to improve his cars including the legendary Model T but Ford refused to ever pay any attention to their advice instead he told them to leave his design alone and stay focused on building parts for his company which really annoyed the brothers although they were comfortably making millions with no major risks the brothers knew their dependency on Ford would eventually come back to bite them later on so in 1913 John Dodge decided to resign from his role as vice president of the Ford Motor Company saying I'm tired of being carried around in Henry Ford's vest pocket they launched an ambitious 18-month plan to restructure their operations and on the 1st of July 1914 the brothers launched their own automobile Enterprise prize the Dodge Brothers Motor Company Horace and John enjoyed their reputation as the two best mechanics in Michigan their names had become synonymous with anything that had to do with quality so it was no surprise when more than 6 000 people came to see the grand debut of the first Dodge car the model of 30.
the new Dodge car came with a 35 horsepower 4-cylinder engine producing 15 more horsepower than the Ford Model T and even aside from its performance capabilities the model 30 was also revolutionary in other ways it was the first automobile with an all-metal body and unlike Ford's Model T Dodge's car had an electric starter headlights a 12 volt electrical system and a speedometer by 1915 more than 45 000 Dodge cars had been built and sold making them America's third best selling automaker in just their first full year of production like Ford Dodge Brothers did not make annual model updates but instead focused on mechanical improvements they also added a wider range of models and commercial vehicles such as touring cars sedans two-seater roadsters trucks and taxis over time they increased their focus on trucks and developed them for various uses such as the Dodge panel van model when someone asked them why their cars were more expensive than the Model T Horus simply replied just think of all those Ford owners who will someday want an automobile it was clear that the Rivalry between the two Brands had started and the Dodge Brothers Motor Company was on the rise with 72 000 Vehicles sold in 1916 to over a hundred thousand vehicles in 1917. as expected Ford was not thrilled about the brother's success while the brothers were rapidly building and selling their cars they still maintained a 10 ownership share of the Ford Motor Company and used the dividends from those stocks to help fund their business in other words Henry Ford was directly paying for the operations of a competing company and he hated it he decided to stop paying dividends to his shareholders and instead use that money to build a huge production factory the River Rouge planned while also doubling his workers wages to five dollars a day and drastically cut down prices for the Model T all in an attempt to grow his company while hurting the profits of his investors particularly the Dodge Brothers as a result the Dodge Brothers filed a lawsuit against Ford and after three years of battling in court they finally won the case Henry Ford had to pay them over two million dollars in back dividends as well as resuming their quarterly payments frustrated with this Arrangement Ford decided in 1919 to buy out their entire shares of his company for a whopping sum of 25 million dollars giving John and Horace a huge Fortune once again between this stock buyout and the dividends they'd received over the years they ended up with a mind-boggling 32 million dollar return on their initial investment of just ten thousand dollars at the same time John and Horace were still enjoying successes from their automobile company customers were so satisfied with their cars that Dodge Brothers didn't have to put much thought into their marketing and used simple slogans such as it speaks for itself or dependability a word that was literally invented by them their vehicles had earned such a good reputation that in 1916 a U. S army lieutenant used three Dodge vehicles to chase down a group of banded leaders during a U.
S Expedition to Mexico against Pancho Villa effectively making Dodge the first military vehicles ever used by the US Army this would later play a role in their new line of business as they earned a contract to supply military vehicles to the U. S army during the first world war as well as chassis for trucks and ambulances even France contacted the brothers to help build recoil mechanisms for their 155 millimeter artillery pieces these military sails made up for the loss of foreign sales during the first world war and most importantly helped Dodge's automobiles earn a reputation for toughness a reputation that the brand still promotes today by 1920 the brothers had turned their business into the second best-selling car company in the U. S only behind Ford delivering over 145 000 vehicles that year however just when it seemed that greater things were just around the corner tragedies struck foreign on the 2nd of January 1920 John and Horace left Detroit to attend the national automobile show in New York by the time they'd returned from their trip the following week they had contracted influenza which quickly developed into pneumonia Horus was the first to fall sick and Jon rushed to his bedside where he camped watching over his younger brother however John also came down sick and had to be bedridden immediately after while horace's Health began to improve John's condition worsened leaving everyone around him in shambles when he died just 10 days later Horus eventually managed a full recovery but was completely broken over the loss of his older brother at one point he was quoted saying the passing of my dear brothers to me a loss so great that I hesitate to look forward to the years ahead without his companionship Horus continued running the business but it wasn't long before his health once again began to decline he had deteriorated so much in the months to follow that by August of that same year he was no longer active in leading the company retreating instead to his Oceanside mansion in Palm Beach hoping to rest and recuperate but sadly he never did recover and on the 10th of December 1920 Horus died from cirrhosis of the liver passing away just 11 months after his brother after their deaths their widows inherited the company and placed Frederick J Haynes in charge of the business Frederick was in many ways the perfect successor for Dodge as he worked closely with the brothers since the very beginning and had a sound understanding of their vision for the company under his leadership they introduced a variety of new models that would help increase the company's sales most notably partnering with the Graham Brothers to produce heavy-duty trucks unfortunately MrHaynes time as president was short-lived as in 1925 the widows sold the company to an investment bank for 146 million dollars in cash and as a result Haynes was replaced immediately after the bank took ownership however this Investment Group had no experience whatsoever working in the car industry and as a result the Dodge company struggled immensely during this period this fact was evident in their sales as by 1927 they were down nearly 40 percent from the previous year and their ranking suddenly dropped to 13th Place in the U.
