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The firm that would become the Yellow Truck & Coach Co. on July 8,
1925 was formally organized two years previous by Chicago's Taxi-cab king, John D. Hertz as the
Yellow Coach Manufacturing Co. A subsidiary of Hertz' Yellow Cab Mfg.
Co., Yellow Coach was a reorganization of the American Motor Bus Mfg.
Co. a business acquired when it's parent firm, the Chicago Motor Bus
Co., was purchased by Hertz in November of 1922.
American Motor Bus Mfg. was a direct descendant of the (Roland)
Gas-Electric Motorbus Co. (N.Y.C.) and American Motor Bus Co. (Chicago),
two related firms founded in 1913 by two brothers, Stanley L.
(b.1850-d.1920s) and Roland R. Conklin (b.1858-d.1936). The history of
the Conklins and their early bus manufacturing activities is covered in
great detail elsewhere in the encyclopedia.
The Yellow Coach story begins with Hertz' takeover of the
Chicago-based Lake Shore Motor Bus Co. in October, 1922. Included in the
deal were a number of similarly-named firms engaged in surface
transportation in and around
Chicago,
Illinois. Joining him in
the enterprise were W. H. Wrigley, Jr., scion of the chewing gum
Wrigleys, Charles A. McCulloch, president of the Parmalee Transfer Co.,
and John A. Ritchie, former president of the Fifth Avenue Coach Co.
The Lake Shore Motor Bus Company was a large holding company whose
assets included the Chicago Motor Bus Co., an operator, and the American
Motor Bus Mfg. Co., a manufacturer that specialized in building buses
for surface transportation enterprises owned and operated by Lake Shore
Motor Bus.
The October 11, 1922 New York Times carried the following news item,
the first mention of Hertz' newest venture in the news:
“QUITS COACH COMPANY HERE; J.A. Ritchie to Become Head of
Chicago Motor Bus Lines.
“The resignation of John A. Ritchie as President of the Fifth Avenue
Coach Company was announced yesterday. Mr. Ritchie will go to
Chicago to become head of
the recently organized Chicago Motor Bus Company. Associated with him in
the reorganized company will be John Hertz, President of the Yellow Taxi
Company of
Chicago; Charles McCullough, a
Chicago banker, and William
Wrigley Jr., the chewing gum manufacturer.
“Mr. Ritchie has been President of the Fifth Avenue Coach Company
since April, 1918. Before that he was operating statistician for the
Interborough subway, elevated and surface lines, having been brought by
the late Theodore P. Shonts, when President of the Interborough, from
the Illinois Central Railroad.”
Additional details of the new enterprise were announced in the
October 1922 issue of Bus Transportation:
“Lake Shore Motor Bus Company Changes Hands; Influential Chicagoans
Take Financial Control—Will Extend Activities to Cover North, South and
West Sides of City
“FINANCIAL control of the Lake Shore Motor Bus Company, the holding
company for the Chicago Motor Bus Company and the American Motor Bus
Company, the operating and manufacturing company respectively, has been
secured by John D. Hertz, president of the Yellow Cab Company; Charles
A. McCulloch, president of the Parmalee Transfer Company and also
vice-president of the Yellow Cab Manufacturing Company, and other
influential and progressive Chicagoans. Among these are W. H. Wrigley,
Jr., of chewing gum fame. John A. Ritchie, who has been president of
the Fifth Avenue Coach Company of
New York City since 1918,
has been elected president, general manager and a director of the
company. As Bus Transportation was being sent to press it was announced
that Col. G. A. Green of the Fifth Avenue Company would also join the
Chicago company. The present
organization of the two underlying companies will be kept practically
intact. Greatly increased service is to be given on the present routes
and new lines are to be opened.
“With service over all of the routes contemplated 300 buses will be
in operation. These, as a combination of the L type coach of the Fifth
Avenue Company and the latest open-top double-deck model of the Chicago
Motor Bus Company, are to be of an improved low-level design, worm
driven, with chain-driven transmission. The engine will be a vastly
improved Moline-Knight. The double-deck coaches are to seat sixty-eight.
In addition to the double-deckers the company will also use between
twenty-five and thirty one-man high-speed single-deck buses chiefly as
feeders to the trunk lines.
“Present operating plans call for 70 miles of route on the south
side, 40 miles on the west side and 30 on the north side. The main lines
will run direct to the
Loop district and the fare will be 10
cents. No transfers will be issued except from short line to long line
buses.
"Hearings have already been started before the Public Service
Commission on the application for permits to operate over the new routes
mentioned above. The statement was made by officials that the newly
organized company would spend $3,500,000 in perfecting its operations.”
Another article in the very same issue (October 1922) of Bus
Transportation, highlighted the successful career of John A. Ritchie,
the man in charge of Hertz' new bus operation:
“J. A. Ritchie Leaves Fifth Avenue Coach Company.; President of New
York Concern, Famous for His Civility Campaign, Will Head Chicago Motor
Bus Company
“JOHN A. RITCHIE, president since April, 1918, of the Fifth Avenue
Coach Company, New York, N. Y., and the man who first introduced
'Civility' into a public utility corporation and made it a popular
byword, has resigned to become head of the recently reorganized Chicago
Motor Bus Company. The departure of Mr. Ritchie for Chicago removes one
of the outstanding figures in transportation developments of New York
City.
“The Chicago company has been organized to conduct a bus
transportation system on a scale larger than has ever been undertaken by
a corporation in this country, and Mr. Ritchie, as president of the new
company, will occupy an important position in the field of motor coach
transportation.
“The Chicago Motor Bus Company will be the operating company. Its
coaches will be manufactured by the American Motor Bus Company, a
subsidiary, of which Mr. Ritchie also will be the head. The company
possesses franchises to operate its coaches over more than 70 miles of
Chicago streets at a 10-cent fare. Dispatches from Chicago state that
the Chicago Motor Bus Company has been capitalized at $3,000,000 and
that an equally large amount will be expended in manufacturing motor
coaches of the general design of the Fifth Avenue company coach, but of
an improved type and possessing greater seating capacity.
“Associated with Mr. Ritchie in the new company will be John Hertz,
president of the Yellow Taxi Company of Chicago; Charles A. McCullough.
Chicago banker; William Wrigley, Jr., the chewing gum man, and others.
“The present equipment of the Chicago Motor Bus Company will be
utilized until the new coaches are ready to go into service. The
building program calls for 300 coaches in a year.
“Civility, a new theme in business and social relations, was
introduced into the Fifth Avenue Coach Company when Mr. Ritchie, a man
in the early forties, became president of the company. Previous to that,
Mr. Ritchie had been operating statistician of the subway, elevated
railroad and surface car lines of New York City, under the presidency of
the late Theodore P. Shonts. Mr. Shonts ‘found’ Mr. Ritchie back in 1908
when the latter was connected with the Illinois Central Railroad as
investigator of accounts. Mr. Ritchie entered the transportation
business in his youth.
“Mr. Ritchie assumed charge of the Fifth Avenue Coach Company at a
time when every industrial enterprise in the country was beset by labor
difficulties as a result of the European war. As president his first aim
was to establish the most cordial relations with his employees, from the
man on the coach up. The word ‘boss’ soon disappeared from the
vocabulary of the Fifth Avenue Coach man. Mr. Ritchie adopted the policy
of an open door to all, ever being ready to listen to the complaint or
suggestion of the most humble.
"Mr. Ritchie's next move was to arouse in the public mind a wholesome
respect for the courteous service of the men on the coaches and the
degree of his success in this respect is best reflected by the reports
for August, which show that there was but one complaint of incivility to
every 996,310 passengers carried during the month. His most recent
innovation in transportation was the substituting of name plates for
numbers on the blouses of the coach men so the public might know with
whom they were riding. This change evoked considerable favorable comment
from the public.
“Corporations throughout the country and educational institutions of
every variety joined with Mr. Ritchie in a universal appeal for a more
general practice of every-day courtesy. The civility campaigns conducted
under his personal supervision started a flood of public comment which
resulted in the compilation and publication of a series of pamphlets on
the subject which are considered as among the best ever issued by a
public service corporation. Some of these pamphlets now are in the
libraries of virtually every city in the country and the most recent of
these, ‘A Harvest of Thoughts on Civility,’ created such demand that the
edition was exhausted over night, and requests by mail became so
numerous that filling them became a virtual impossibility.
“An extended biographical sketch of Mr. Ritchie was published in Bus
Transportation for February, page 148. Further details of the
reorganization of the Chicago Motor Bus Company will be found elsewhere
in this issue. Just as Bus Transportation went to press it was announced
that Col. G. A. Green, vice-president and general manager of the Fifth
Avenue Company, would also join Mr. Ritchie in Chicago.”
The November 1922 issue of Bus Transportation revealed the results of
a traffic study which led to Hertz' decision to enter the bus operating
business:
“Chicago Company Stresses Direct Communication — Experts' Traffic
Study Shows City's Greatest Increase on South Side”
“THE Chicago (Ill.) Motor Bus Company which was recently reorganized
by financial interests with which are identified John Hertz, president
of the Yellow Cab Company, and Charles A. McCulloch, president of the
Parmelee Transfer Company, has presented its reason why it should be
granted a certificate of convenience and necessity by the Illinois
Commerce Commission in hearings which were held on Oct 10 and on Oct.
25, 26 and 27. The routes under consideration are those leading from the
Loop district to the south side over the boulevard and passing through
and adjacent to the parks in that district.
“The new company has already obtained a franchise to operate through
the parks and boulevards under the jurisdiction of the South Park Board.
The hearing will be concluded on Nov. 6 and it is expected that if the
certificate is granted operation will begin from two to three weeks
after that date.
“In seeking its certificate, the company introduced evidence by which
it sought to show that the proposed bus service will provide direct
accommodation along the boulevards and will provide more rapid,
convenient and comfortable service to and from the loop district for
certain residential districts not now conveniently served. Another
contention was that it would afford an opportunity for pleasure riding
to that part of the population which does not own motor cars, and it
will particularly make available the advantages of the parks and
boulevard system. The extent of pleasure riding was shown by figures of
the north side lines of the Chicago Motor Bus Company and also from
records of the Fifth Avenue Coach Company. It was also demonstrated that
operation of a route proposed would not be injurious to the traffic of
the Chicago Surface Lines or the Chicago Elevated Railroad.
“To show the financial soundness of the new company, John D. Hertz,
president of the Yellow Cab Company, pledged the bus line to an
expenditure of $3,500,000 which is already available. He placed himself
on record as a witness before the commission to this effect.
“As announced in Bus Transportation last month, John A. Ritchie and
Col. George A. Green have resigned from the Fifth Avenue Coach Company
to take active charge of the new Chicago Motor Bus Company, although it
is understood that both Mr. Hertz and Mr. McCulloch will take a
prominent part in the management of the concern. Mr. Ritchie, who has
resigned as president of the Fifth Avenue Coach Company, has been made
president and general manager of the new company, while Colonel Green
has left his position as engineering chief of that corporation to become
vice-president and manager.
“Mr. Ritchie has testified before the commission that the general
method of conduct of the company will be along the lines of that of the
Fifth Avenue Coach Company. In his testimony, Colonel Green, who has
made a life study of bus transportation in this country and abroad, said
that Chicago offers the greatest opportunity for a bus transportation
system of any city that he knew. He said that he hoped to be able to
give Chicago even better service than is operated in either New York or
London. The plan, he explained, calls for two types of buses, one of the
double-deck type carrying sixty-eight passengers and the other a
single-decker carrying twenty-five passengers.
“Feasibility Of Bus Service Determined By Traffic Study
“To show the feasibility, convenience and necessity of bus operation
on the proposed route, the Chicago Motor Bus Company engaged Ford, Bacon
& Davis, Inc., consulting engineers, to make a detailed traffic and
transportation study. The results of these studies were introduced as
evidence of why the certificate should be granted. In this survey it was
shown that in the decade 1910 to 1920 the population of the south side
of Chicago increased at a greater rate than that of the city as a whole,
the rate of increase being 27.3 per cent for the south side and 23.6 per
cent for the city. Moreover, of the total population increase in that
period, namely, about 560,000, more than 40 per cent was on the south
side. The result of the traffic study was that although Michigan Avenue
is congested at present, the introduction of bus service would possibly
increase that congestion by 3 or 4 per cent while the boulevard would be
made available to a very large number of people. The fact that bus
service would be a prominent factor in the conversion of south Michigan
Avenue into a high-class shopping district was brought up as a point to
show why the certificate should be granted.”
Another article in the same issue (November 1922) of Bus
Transportation, announced that Col. George Alan Green had resigned as
vice-president and general manager of the Fifth Avenue Coach Co. in
order to accept a similar position with Hertz' newly acquired Chicago
Motor Bus and American Motor Bus Mfg. Companies in Chicago:
“G. A. Green in Chicago.; Noted Automotive Engineer Resigns from
Fifth Avenue Company to Assume Position of Vice-President and Manager of
Chicago Motor Bus Company and American Motor Bus Manufacturing Company
“IF EVER a man was a step ahead of the events in the engineering
industry of which he is a part, George A. Green, the new vice-president
and manager of the Chicago Motor Bus Company and the American Motor Bus
Manufacturing Company, is that man. In these companies Mr. Green will
again be associated with John A. Ritchie, both Mr. Ritchie and Mr. Green
having resigned from the Fifth Avenue Coach Company, New York, to go to
Chicago.
“Necessarily there is a community of interest existing between the
two men so long associated in one enterprise, but that alone could not
have held them together in New York or induced Mr. Green to cast his
fortunes and his future with Mr. Ritchie in Chicago. It was more than
that. It was opportunity. Opportunity held them together in New York and
opportunity for both of them has induced them to go to
Chicago—opportunity for Mr. Ritchie to apply to Chicago on an even
bigger scale than he did in New York ideas of management and personnel
which have put the New York company in the forefront of transportation
organizations the world over, and for Mr. Green opportunity to apply and
extend ideas which he has about bus construction and maintenance.
“Originality And Initiative Are Predominant Characteristics
“Long before anybody else in this country had begun to formulate
ideas as to what a bus should be George A. Green had worked out for
himself a series of axioms that has since come to be generally accepted
as necessary to insure the best operating results for large-scale bus
systems. It was he undoubtedly who arrived first at definite conclusions
regarding the necessity for light-weight buses; regarding the question
of the low center of gravity of the bus, the proper gear ratios, the
best widths for frames and springs and wheel tracks; the turning radius
and the need for ease in steering. He reduced to a science the matter of
analyzing and recording breakages and equipment failures. He also was
quick to realize that centralized unit repairs were essential for
economy. His ideal of the true bus is to give Pullman car service under
unified control at a 10 cent fare.
“Mr. Green thinks in large units. Having done so much to perfect the
bus mechanically, Mr. Green has shown that greater mechanical perfection
must be accompanied by operation which has behind it the idea of
securing greater gasoline efficiency. He has said the latter, where the
human element enters, is even more difficult to attain than mechanical
perfection. The best thoughts of Mr. Green along these and kindred lines
were packed by him into a paper which he read before the Society of
Automotive Engineers more than two years ago. It is pronounced by men in
the automotive industry to be a classic. In addition to all this is the
work done by Mr. Green in collaboration with Ricardo, the noted English
automotive engineer. The results of this work were embodied in a paper
also presented before the Society of Automotive Engineers.
“Proved His Problems Before He Talked About Them
“Mr. Green has, however, looked beyond the mechanics of the matter.
He is what might be termed the engineer plus. His work toward perfecting
the bus mechanically has not so engrossed him that he has not seen the
bus problem in its larger province as a transportation agency. Mr. Green
has pronounced views about fares, personnel and other matters that the
outsider might think were beyond his personal field. These he has
likewise embodied in papers presented before engineering and
transportation bodies, where they have been put to the acid test by
transportation men sometimes none too friendly to the bus as a
transportation agent. In other words, George A. Green's conclusions ring
true because as a scientist he proves things before he talks about them.
“Mr. Green a Trained Engineer
“As a foundation of all the work that he has done Mr. Green has back
of him a thorough training in engineering coupled with an apprenticeship
in the shop and in the field that it is within the grasp of very few men
to attain. Thus is an idea conveyed of the fund of information and
knowledge which Mr. Green will be able to apply to the problems that
come up in Chicago, first, in actual operation of the vehicles on the
street and then in the manufacturing activities of the American Motor
Bus Manufacturing Company. Other aspects of the remarkable career of the
man were reviewed in Bus Transportation last February.”
The same magazine (November 1922 Bus Transportation) reported that
Hertz' Chicago operations were purchasing new coaches from the Fifth
Avenue Coach Co. while the Yellow Cab Mfg. plant was enlarged and
outfitted to produce new motor coaches:
“Chicago (Ill.) Motor Bus Company has purchased nine ‘L’ type coaches
and one ‘J’ type coach from the Fifth Avenue Coach Company, New York
City. J. J. Gerlach, Pittsburgh, Pa., has purchased one ‘L’ type coach
from the Fifth Avenue Coach Company. New York City. This is the second
‘L’ type purchased by him.”
One period account indicates the Chicago plant of the American Motor
Bus Mfg. Co. utilized the rear-wheel-drive Ace truck chassis, which were
supplied by Newark, Ohio's American Motor Truck Co. It's also known that
American Motor Bus built their own front-wheel-drive chassis utilizing
R&V Knight Sleeve-Valve Engines, so it appears that both front- and
rear-wheel-drive motor coaches were constructed by the firm prior to its
1922 acquisition.
During 1922 American constructed 23 fully-closed double-deckers for
the Chicago Motor Bus Company. A prototype open-top 67-seater followed
of which 71 were built before coach construction was transferred to
Yellow Cab's new bus plant midway through 1923.
The December 1922 issue of Bus Transportation gave details of the
Yellow Cab Mfg. Co.'s plant expansion:
“Plant Capacity Being Increased
“Reports from Chicago state that the capacity of the cab factory of
the Yellow Cab Manufacturing Company is being increased 50 per cent,
while the general plant is being increased another 50 per cent- in
preparation for the manufacture of buses by the American Motor Bus
Manufacturing Company for the new Chicago Motor Bus Company.”
Production of the expensive and intricate American Motor Bus'
front-wheel-drive coaches ended when Yellow Cab Mfg. Co. started
producing their own rear-wheel-drive coaches for Hertz' Chicago-based
bus lines utilizing engines produced by the Yellow Sleeve Valve Engine
Works, another Hertz-controlled firm that was a late 1922 reorganization
of the Root & VanDerVoort Engineering Company of East Moline, Illinois,
manufacturers of the "Silent Knight" 4-cylinder sleeve-valve engine,
which was built under license from Daimler of Coventry, England. A related firm manufactured the Moline, Moline-Knight and R&V Knight
automobiles between 1904 and 1924.
The move was anticipated as the R&V Engineering Co. had long supplied
the engines for the double-decker coaches of the Fifth Avenue Coach Co.,
whose management (John A. Ritchie and Col. Green) was now in charge of
Hertz' Chicago bus building operations.
At about the same time noted British bus designer George John
Rackham, an ex-Tank Corps officer who started his career with the London
General Omnibus Co. after the war, was recruited by Col. Green to move
to America to help design the first generation of Yellow Coaches.
Rackham returned to England in 1926 to take a position with Leyland
Motors as chief engineer where he would go on to design the drivetrains
for the firm's legendary low-floor Titan and Tiger models. In 1928
Rackham left Leyland to assume a similar position with the Associated
Equipment Company (AEC). In 1932 he introduced the AEC Type Q
side-engined bus chassis, a design loosely based upon the Fageol Twin
Coach bus chassis of the late Twenties.
On April 17, 1923, Hertz' holding company, the Lake Shore Motor Bus
Company, sold its bus manufacturing assets - the American Motor Bus Mfg.
Co. – to the Yellow Cab Mfg. Co. who reorganized it as a wholly-owned
subsidiary, the Yellow Coach Manufacturing Company.
The firm's new bus factory went online during August and by that
December (1923) Hertz had organized the Yellow Manufacturing Acceptance
Corporation in order to finance sales of the Yellow Cab's buses and
taxicabs.
During the summer of 1923 Col. George A. Green worked out a plan to
modify the existing Chicago-style double-decker utilizing features that
had proved popular with similar coaches operating in New York City.
While at Fifth Ave., Green had designated his two previous designs as
the Type A and Type L. He elected to name the new series of Yellow
coaches with an X, Y or Z prefix.
Introduced in 1925, Yellow's Type X coaches were smaller 17-21
passenger buses designed for less-travelled inner-city routes, or as
feeders to the main terminal. The Type Y of 1924 was a 25-passenger
low-headroom parlor coach (no standees) fitted with luxuriously padded
seats for express or suburban passengers. The Type Z of 1923 was a
heavy-duty city-service coach offered in two versions, a 29-passenger
high-headroom coach (44-passenger max., including standees) or a
63/66/67-passenger double deck version which offered seating for 25-27
on the first floor and 28-30 on the second. The double deck Type Z was
available with a partially-enclosed second floor (Type Z-66) or a
completely open one (Type Z-63/67).
Starting in 1925 two additional long-wheelbase Z-series coaches were
constructed for the Philadelphia Rapid Transit Corp., the Type Z-200 and
Type Z-230, the numeral designating the wheelbase in inches (when
equipped with a single deck the designations were Z-29 and Z-33,
respectively). Both coaches were available with either the standard
Yellow-Knight sleeve-valve engine or a General-Electric-sourced hybrid
gas-electric drive system, where a gasoline engine powered 2 large
electric motors located at the rear of the coach.
Col. Green insisted that any substantial change in equipment or
dimensions were to be distinguished by its own model number, so numerous
variations/models were seen, however all were based on the same four
basic types between 1923-1928.
Sensing a demand for a light truck equipped with the Yellow-Knight
sleeve-valve engine, Yellow Coach introduced the Yellocab 1-ton truck in
1924, although sales of the vehicle ended soon after General Motors
purchased a controlling interest in the firm in July of 1925.
From August 1923 through July 1925, Yellow Coach Manufacturing Co.,
built 590 buses for Hertz' various transportation companies; 420 buses
for Chicago, 90 for People's Motorbus of St. Louis, and 80 for the Fifth
Avenue Coach Co. During 1924 and 1925 Yellow Coach also produced 1079
buses for two unrelated firms; 500 for the Public Service Corporation of
New Jersey ($5 million contract) and 579 for the Philadelphia Rapid
Transit Corp. ($6.5 million contract).
The increasing success of Hertz' numerous transportation enterprises
piqued the interest of General Motors chairman Alfred P. Sloan which
prompted a more thorough investigation of the emerging surface
transportation business. Sloan wasted no time and in early 1925 entered
into negotiations with Hertz, the results of which were hinted at in the
June 28, 1925 issue of the New York Times:
“TAXI HEAD SILENT ON MERGER PLANS; Hertz of Yellow Company Conferred
With General Motors Men at Detroit. ALSO AFTER BUS CONTROL Financial
District Believes Concern That Controls Fifth Avenue Vehicles Is
Involved.
“Reports of a contemplated merger of the General Motors Corporation
and the Yellow Cab Manufacturing Company and the Yellow Coach Company of
Chicago, were neither confirmed nor denied by John Hertz, head of the
taxicab and coach companies, yesterday, according to a dispatch from
Chicago.”
Ten days later, the New York Times announced the "merger" in their
July 8, 1925 edition:
“YELLOW CAB CO. NOW IN GENERAL MOTORS; Directors and Bankers of Both
Concerns Agree to the $16,000,000 Merger.; YELLOW TO BUILD TRUCKS.;
Automobile Makers to Turn Over This Part of Its Business – Will Be
Active In Bus Field.
“Official details covering the negotiations whereby the General
Motors Corporation has acquired a controlling interest in the Yellow Cab
Manufacturing Company of Chicago were made public yesterday by
representatives of both companies. Completion of the deal joins the
largest automobile and taxicab manufacturing units in the country, and
the working agreement between the two organizations has been consummated
for the purpose of expanding in the motor truck and bus fields. Under
the agreement the truck division of General Motors organization will be
transferred to the Yellow Cab Corporation, and in exchange the General
Motors Corporation receives 800,000 shares of the common stock, a
controlling interest in the Chicago organization.
“The Boards of Directors of both companies have unanimously agreed
within the past few days to link the two organizations, and the plan
also has the support of the two banking concerns which represent the
companies. The plan, however, has yet to be ratified by the stockholders
of the Yellow Cab Manufacturing Company.
“Announcement of the details was issued for the General Motors
Corporation by Alfred P. Sloan Jr., President of that organization. The
statement of John Hertz, President of the Yellow Cab Company, and Lehman
Brothers, the bankers for the latter company, was issued through the law
firm of Chadbourne, Stanchfield & Levy.
“Change in Capital Structure
“According to the statement of Mr. Sloan, the plan calls for a
readjustment of the capital structure of the Yellow Cab Manufacturing
Company and the sale to it of all the stock of a new corporation, to
which General Motors Corporation will transfer the plants and other
assets of the General Motors truck division. The property so
transferred, it is stated, will have an aggregate net book value of
$16,000,000, including about $10,500,000 of net working capital, of
which about $5,000,000 will be in the form of cash, this giving the new
combination ample working capital. For this transfer the General Motors
Corporation will receive $16,000,000. This $16,000,000 will be used for
the acquisition of 800,000 shares of the common stock of the new Yellow
Truck and Coach Manufacturing Company, which will be the name of the new
company, which will be the name of the new company to be organized to
take over the present taxicab business and the General Motors truck
division.
“The capitalization of the new Yellow Truck and Coach Manufacturing
Company, following completion of the plan, will consist of 150,000
shares of 7 per cent, non-voting cumulative preferred stock of $100 a
share par value, 600,000 shares of Class B stock of $10 a share par
value, and 800,000 shares of common stock of $10 a share par value.
“Regarding the position of the stockholders of the Yellow Cab
Manufacturing Company, it is stated that the 6,000 shares of Class A
stock, valued at $600,000 par, will be retired. Holders of the present
Class B stock of the company will receive Class B stock in the new
Yellow Truck and Coach Company on a share for share basis, and in
addition they will receive an extra dividend equal to $25 a share, in
the form of the 7 per cent, cumulative stock of the new company.
“Expects Great Economies
“Commenting upon the importance of the deal from General Motors
standpoint, Mr. Sloan in his statement said: ‘The Yellow Cab
Manufacturing Company, apart from its position in the taxicab business,
occupies a strong position in the bus field. A merger of the General
Motor truck business with the business of that company is calculated to
result in material economies in the manufacturing and distribution end
of these important lines of business.’
‘“General Motors Corporation has recognized the importance of the
bus, and believes that the proposed merger with the Yellow Cab
Manufacturing Company will immediately place it in a strong position in
the bus business, with the opportunity of enjoying a really unique
position in the future development in that field. It also believes that
is position in the heavy duty truck business will be greatly
strengthened as a consequence of the combined management and the
benefits derived from more economical manufacture and distribution.’
“Mr. Hertz’s statement said that ‘for a long time the Yellow Cab
Manufacturing Company has been preparing to engage vigorously in the
manufacture of trucks and commercial bodies, in addition to its
established lines of motor buses, taxicabs and its present products. The
acquisition of the General Motors facilities will immediately enable it
to become a leading factor in the truck business and will secure to it
at once the excellent facilities and the vast resources connected with
the General Motors Corporation, a result which otherwise could not
possibly have been accomplished without many years of effort.’
“From the standpoint of the stockholders of the Yellow Cab
Manufacturing Company, Mr. Hertz said this deal is ‘the greatest
achievement in their history. This connection with General Motors
organization will assure to the Yellow company the great advantages of
economical purchase in large quantities, of quantity production,
intensive sale management, large savings in manufacture and the benefit
of the highest technical automotive experience in the world. In
association with General Motor Corporation, the premier automobile
manufacturers for the company will far exceed any that they have ever
had in their history.”
Pending approval by its shareholders, the directors of the Yellow Cab
Mfg. Co. agreed to give General Motors Corp. a controlling interest
(60%) in a new holding company called Yellow Truck & Coach Co. in
exchange for the assets of the former General Motors Truck Co. and the
Northway Motor and Mfg. Co. which were to be combined with those of
Yellow Cab Mfg. Co. and its wholly-owned subsidiary, the Yellow Coach
Mfg. Co.
(Acquired by General Motors in 1909, Northway Motor and Mfg. was
founded in 1903 by Ralph E. Northway, designer of the Northway Engine,
to supply engines and parts for Ford. Later customers included Auburn,
Buick, Cole, GM Truck, Jackson, Keeton, Oldsmobile and Scripps-Booth.)
A new firm, The General Motors Truck Corp. was organized to handle
Yellow Truck & Coach's manufacturing operations, while the General
Motors Truck Co. would handle all of Yellow Truck & Coach's sales.
(A similar arrangement was subsequently worked out with General
Motors Canadian truck division which was reorganized as General Motors
Truck & Coach Co. of Canada Ltd. later that year. For the first time
Yellow cabs and coaches were made available throughout Canada. By 1927
the Canadian operations had been reorganized as Truck and Coach
Division, General Motors Products of Canada Ltd.)
At the time of the merger Hertz was president of the Yellow Cab
Company; chairman of the board of the Yellow Truck & Coach Manufacturing
Company; chairman of the Omnibus Corporation of America; chairman of the
Chicago Motor Coach Company; chairman of the Fifth Avenue Coach Company;
chairman of the New York Transportation Company; chairman of the Yellow
Coach Manufacturing Company; chairman of the Yellow Sleeve-Valve Engine
Works, Inc.; chairman of the Benzoline Motor Fuel Company; and chairman
of the Hertz Driveurself Company.
Within the week, details of the organizational structure of the new
firm were published in the July 17, 1925 New York Times:
“HERTZ AND RITCHIE HEAD TRUCK MERGER; To Be Chairman and President of
Yellow Cab-General Motors Combine.; SEE BIG CHANGE IN INDUSTRY.;
Door-to-Door Long-Distance Transportation Probable, Head of Board Says.
“John D. Hertz, President of the Yellow Cab Manufacturing Company,
has announced the personnel of the Yellow Truck and Coach Manufacturing
Company, which has been organized for consolidating the truck division
of the General Motors Corporation, the Yellow Cab Manufacturing Company
and the Yellow Coach Manufacturing Company into one company. Mr. Hertz
will be Chairman of the Board of Directors and John A. Ritchie, Chairman
of the Board of the Fifth Avenue Coach Company, will be President.
“George A. Green, formerly Chief Engineer of the Fifth Avenue Coach
Company, will be Vice President in charge of engineering; Paul H. Geyser
will be Vice President In charge of production; Irving A. Babcock, Vice
President in charge of finance and accounting; P.L. Emmerson, Vice
President in charge of sales, and Otto E. Stoll, Vice President and
manager in charge of the motor truck division.
“This combination of the cab, motor coach and truck manufacturing
interests of the companies, according to Mr. Hertz, will result in great
economy in the purchase of raw materials and the production of vehicles,
and will give the new company one of the largest selling organizations
in the world. It will thus be a benefit, he adds, not only to the
security holders, but to the purchasers of vehicles and through them
directly to the public.
“Mr. Hertz formal statement, which appears in the current issue of
Motor Coach, says that the combination of the three companies ‘will
enable us to carry out rather extensive plans we have had in mind for
some time, to become the largest manufacturer of commercially operated,
revenue-producing vehicles in the world. We have established a
reputation through many years of manufacturing as the producers of the
highest class and biggest revenue-producing taxicabs, coaches and
light-delivery wagons in the world.’
“Pointing out that there will be no radical changes in the policies
of the Yellow Cab Manufacturing Company, Mr. Hertz says ‘this is a most
logical combination and under the new order of things will not only give
us the manufacture of a line of commercial vehicles more comprehensive
than any other manufacturer, but will enable us to incorporate in the
design and construction of our trucks many of the operating and
manufacturing refinements to be found in the construction and design of
our motor coaches and taxicabs. Incidentally I might say that the
General Motors Company truck division is a highly successful
organization. It has an experience in the manufacture of heavy-duty
vehicles extending over many years, and has in service today many of the
heavy-duty trucks doing satisfactory duty all over the world.’
“Commenting on the development of the industry, Mr. Hertz adds that
‘we feel that our industry is on the brink of a tremendous evolution.
Throughout the nation, all thinking transportation men appreciate that
the motor coach and motor truck are destined to fill an increasingly
important niche in the general scheme of things, For some time we all
have been preparing for this eventuality.’
‘“I believe that the time is near at hand when a passenger will buy a
railroad ticket calling for transportation of himself and baggage from
his home to the place at which he intends to stop in some distant city.
In other words, the purchase of his original ticket will include such
transportation as taxicabs and coaches. This equally true of freight. In
the near future I believe we will see the railroad shipper’s bill of
lading include pick-up service and delivery, as well as transportation
from one place to another. In other words, railroad companies must
necessarily avail themselves of the use of such vehicles as ours in
order to carry out a complete plan of transportation.’”
On August 12, 1925, General Motors Corp. incorporated the General
Motors Truck Corp. under the laws of Delaware. Yellow Cab Mfg. Co.
stockholders ratified the merger on August 17 and the Yellow Truck &
Coach Mfg. Co. replaced the Yellow Cab Mfg. Co. on August 26. John D.
Hertz became chairman and John A. Ritchie president. All elements of the
complex merger were complete by the end of September.
The following February (Feb. 10, 1926) GM's board of directors
approved the purchase of land for a new Yellow Truck & Coach assembly
plant. In March of 1927 a suitable 160-acre tract south of Pontiac,
Michigan was acquired from a farmer named Alfred Howland, the purchase
announced on June 13, 1927.
By June of 1926 the former Yellow and General Motors sales staffs had
been consolidated at the former Dickens Ave. Yellow Cab plant in
Chicago. The following month most of the firm's engineers were relocated
to the Rapid St. General Motors Truck plant in Pontiac, Michigan
although the actual production of Yellow Cabs, Coaches and Yellow-Knight
engines remained in Illinois for the time being.
At about the same time the Detroit-based Northway Motor and Mfg.
division was shuttered, and much of its equipment transferred to the
Yellow Sleeve-Valve Engine Works in East Moline, Illinois. The idle
Holbrook Ave. facility was subsequently sold to the Chevrolet Gear and
Axle division of the Chevrolet Motor Co.
By that time the lightweight Yellocab T-1 truck (1924-1927) had been
joined by the Yellow-Knight T-2, a medium-sized 1-ton truck offered
during 1926-1927. The T-1 was now equipped with a Buick engine, while
the T-2 was powered by a 41hp Yellow-Knight engine.
The medium-priced Chicago-built trucks were offered with a full line
of factory-supplied bodies, most of which were made in-house. However,
sales were slim, and during the 1927 model year GMC replaced the
unpopular vehicles with a line of cheaper GMC-branded T-10 and T-20
lightweight trucks.
At the time of the GM merger Hertz' Driveurself rental car business
was a subsidiary of Yellow Cab Mfg. Co., and was included in the deal.
It continued to operate as a subsidiary of Yellow Truck & Coach and a
number of GM executives held positions with both firms. Irving R.
Babcock, who served as vice-president of the Yellow Truck & Coach Mfg.
Co. served as president of Hertz Driveurself while Hertz served as
chairman of both firms.
Under General Motors ownership the Driveurself subsidiary prospered
and by 1930 the rental car company claimed to have offices located
adjacent to a majority of the nation's major rail stations. By that time
the purpose-built Hertz rental car had been dropped in favor of a fleet
of cars purchased from a number of General Motors' divisions.
In January 1927, John A. Ritchie was elevated to the position of vice
chairman of the board of Yellow Truck & Coach Mfg. Co. and Paul W.
Seiler was promoted to president and general manager. The three firm's
(Yellow Truck & Coach, General Motors Truck Co. & General Motors Truck
Corp.) business offices were subsequently relocated to General Motors
corporate headquarters on West Grand Boulevard in Detroit.
A few months later the firm's purchase of the Howland farm in Pontiac
was announced to the public. On June 13, 1927 the Detroit and Pontiac
newspapers gave details of the firm's plans to construct a modern $8
million 1.25 million square-foot factory dedicated to the manufacture of
trucks and coaches. Ground was broken for the new South Boulevard plant
and offices on July 5, 1927, and contractors worked around the clock
until the factory was completed the following January.
The very first truck rolled off the line on January 5, 1928 and
within two months most of the firm's numerous engineering, purchasing,
sales and management departments were installed in the new
administration building. By that time 150 trucks were leaving the new
Pontiac, Michigan plant daily. Bus and taxi production remained in
Chicago until later that year when the all-new Model U and Model W buses
were introduced. Production of the Model X, Y and Z coaches were all
transferred to Pontiac prior to 1930 when the final alphabetically
designated Yellow Coach, the Model V, debuted.
Prior to the move to Pontiac, a large portion of the firm's coachwork
had been built in Cleveland, Ohio by the Bender Body, Brown Body and
Kuhlman Car Companies, necessitating the transportation of the bare
chassis from Chicago to Cleveland by rail.
However the market was changing and following the move to Pontiac,
Yellow began producing more and more of their own coachwork, which was
made available in a large number of standard styles and seating
capacities.
By the late 1920s orders for the once-popular sleeve-valve engine
produced by the Yellow Sleeve-Valve Engine Works were decreasing just as
demand for the poppet-valve examples increased so Yellow Truck & Coach
closed down the firm's East Moline operations at the end of 1929. Most
of its equipment was transferred to the old General Motors Truck plant
in Pontiac, while existing employees were given the chance to relocate.
The firms shuttered Chicago and East Moline, Illinois factories were
subsequently sold off.
The
Yellow Coach Story is continued, CLICK HERE for Page 2
© 2004 Mark Theobald - Coachbuilt.com
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