Business & Finance: The Drive

In 1908 Otto Zachow, a blacksmith in Clintonville, Wis., noted how often automobiles bogged down in Wisconsin’s muddy roads. It did not occur to Zachow that roads would be improved. He decided that automobiles would not be practical until their power was transmitted to all four wheels so their front wheels could pull their hind wheels out of mudholes. Blacksmith Zachow went to work in his brick machine shop, devised the world’s first four-wheel drive car. The sprawling factories of Four Wheel Drive Auto Co. now employ almost a fourth of Clintonville’s 3,500 residents, but not Otto Zachow. Last week, when “The Drive” got permission to list its stock on the Chicago Stock Exchange, Otto Zachow, grey and grim at 75, was still toiling in his brick smithy.

Like many another inventor, Otto Zachow had no head for finance. He and his brother-in-law, William Besserdich, unable to get their machine into production, interested a husky young lawyer named Walter Alfred Olen. Walt Olen set out to raise $250,000. In 1910 the present company was incorporated, with him as president, and Otto Zachow received a block of stock. About 1914 Zachow and Besserdich sold out for $25,000. That was a mistake, for General Pershing had found several F.W.D. trucks useful while chasing “Pancho” Villa across Mexico. When War broke in Europe, the Allies began buying F.W.D. trucks in quantity. When the U. S. joined the Wrar, the U. S. Army took over F.W.D.’s entire output. By 1918 it had bought 16,000 F.W.D. trucks, and spare parts equivalent to 14,000 additional trucks. F.W.D.’s 15,000 shares had run up to $580 a share.

Since the War, F.W.D. has thrived in the commercial field with an early cab-over-engine job and with such husky specialized products as snowplows, fire-engines and machines capable of installing telephone poles in five minutes, hole and all. About 50,000 four-wheel drive vehicles are now in service and although there are 20 rival concerns,* F.W.D. made 80% of them. It now sells about 1,000 a year, has a factory in Kitchener, Ont., distributes all over the world. In the fiscal year ended last June it grossed $4,137,937, netted $151,405 or 83¢ on its 182,240 outstanding shares (after a 10-for-1 split in June).

F.W.D. is now at work on military contracts for the U. S. and foreign buyers. Dominating every detail is Wralt Olen, now 63, but still full of four-wheel-driven energy. When he laughs he still gets red all over. Pompous but kindly, he likes to lecture his men. When he is preparing a lecture, his wife has advance notice—he practices while shaving. Then a problem bothers him, he puts a compass in his pocket, strikes out into the woods until his mind clears. Whenever he passes an F.W.D. truck he tips his hat.

* One competitor which did not last was the Oshkosh Four Wheel Drive Auto Co., founded by Otto Zachow and William Besserdich in 1919.