Automotive industry: The Beginning of the Industry - Business in United States of America
Many people in many different places were responsible for the invention of the automobile. Étienne Lenoir, a Belgian, made the first successful internal combustion engine in 1860, and twenty-five years later Carl Benz, a German engineer, was the first to build a usable vehicle powered by such an engine. In 1893, Charles E. and J. Frank Duryea built America’s first successful automobile in Springfield, Connecticut, and two years later their vehicle prevailed in a car race against German-built competitors. The Duryea car averaged seven miles per hour in the fifty-five-mile race from Chicago to Evanston, Illinois. At this time, accidents and breakdowns were extremely common, and many people looked on motor vehicles as a passing fad.
During the 1890’s, numerous entrepreneurs were competing in an attempt to develop a commercially profitable vehicle. In 1897, Colonel Albert A. Pope of Hartford, Connecticut, established the Pope Manufacturing Company, which is considered the true beginning of the U.S. automobile industry. That same year, Francis and Freeman Stanley began making steam automobiles in Newton, Massachusetts, and they built a few hundred Stanley Steamers before the advantages of the internal combustion engine become clear. The first truly successful company, the Olds Motor Works, founded by Random E. Olds in 1899, sold five thousand cars during its first five years of operations. The “Merry Oldsmobile” was dependable, affordable, and simple to operate. Olds was the first to apply the assembly-line principle to the automobile and the first to build a factory specifically designed to manufacture automobiles.
In 1902, Henry M. Leland founded the Cadillac Automobile Company, which was named after the founder of Detroit. In 1903, David Dunbar Buick founded the Buick Motor Company. That same year Henry Ford, an engineer who had failed in two earlier business ventures, established the Ford Motor Company, which for its first three years simply assembled parts supplied by other companies. Although Thomas Alva Edison encouraged Ford to persevere, Edison disdained the noise and pollution of gasoline engines, investing his time and money in an unsuccessful attempt to build an electric car.
The majority of the earliest automobile manufacturers paid a royalty of about 1 percent to the Association of Licensed Motor Vehicles (ALAM), which existed only because George Selden had obtained a patent for making automobiles in 1895. Although Selden did not actually build an automobile until 1904, he obtained a patent based on a crude model that he had first submitted in 1877, after observing a two-cycle engine built by George Brayton. Henry Ford refused to pay royalties to ALAM, and after a long legal battle, a federal appellate court in 1911 ruled in Ford’s favor, holding that Selden’s patent applied only to automobiles using the obsolete Brayton engine. Publicity from the litigation helped enhance Ford’s reputation as an opponent of unmerited gain at the public’s expense.