REO Motor Car Company

REO Motor Car Company was the new automobile company Ransom E. Olds started after leaving Olds Motor Works. Its brief mention marks a reversal in Olds’s fortunes: the pioneer who had helped shape an emerging industry returned to car manufacturing, but by then the market’s decisive shift toward mass production had passed him by.

Founding and Background

Olds left Olds Motor Works after only a few years, following a fight with Samuel Smith’s sons. Although his company had achieved early success, the departure meant he did not get to enjoy it for long. He eventually founded REO Motor Car Company, carrying his experience into a new venture rather than remaining with the business he had helped establish.

A Changed Automobile Industry

The timing was unfavorable. In the industry’s early years, makers pursued a wide range of designs and technologies, including electric- and steam-powered vehicles. But electric cars could not travel far enough without recharging, and steam cars took too long to heat up. Meanwhile, gasoline-car makers invested heavily in mass production and learned how to reach a broad market.

Olds had helped pioneer a more specialized way of making cars by buying different parts from different manufacturers rather than producing every component in-house. Other approaches helped reshape production: Cadillac successfully used standardized components to reduce manufacturing time and cost, while Henry Ford revolutionized the industry with the moving assembly line and a relentless focus on producing one kind of car as cheaply as possible. These changes altered the competitive ground on which a new company such as REO had to operate.

Olds’s Late Return

Olds’s new company did not recapture the moment he had helped create. By World War I, Henry Ford made almost half the cars in America. The industry had moved away from the bewildering variety of early automobiles: steam- and electric-powered vehicles no longer figured in the same way, and the Model T had become the familiar image of what an automobile looked like. The account offers no further details about REO’s operations or later history; its significance here lies in the contrast between Olds’s early influence and his belated attempt to re-enter a transformed market.