Fred and August Duesenberg were first-class engineers who created some of the finest early cars in the United States, but unfortunately they were not so good as businessmen.
In 1913 the two brothers set up a business in Minnesota to build engines, and to race cars. These cars were top-quality and built by hand. By 1914 though the money was running out. They were fortunate however in having an employee called Eddie Rickenbacker, the most successful World War I fighter ace in America and a confirmed speed addict. After a few brushes with the safety regulators of the American Automobile Association he had been given a year's ban from the country's race tracks so he joined Duesenberg and worked on car design until his suspension was lifted, and he was able to race again.
At the time the Sioux City 300 was one of America's major races, considered to be on a par with the Indianapolis 500. It drew competitors and spectators from all over the world. The prize money for the winner was $10,000; a very considerable sum at the time. Funds were so bad for Duesenberg that if they failed to get a win the company would go under; in the event Rickenbacker came in first, with another Duesenberg driver coming third and being awarded another $2500. The total prize money was $12,500; the company was back in business.
A Duesenberg car came 10th in the Indianapolis 500 that year; but by the 1920s they were far more successful with outright wins in 1924, 1925 and 1927. In between of course World War I intervened. The company built aviation and marine engines but once the military contracts dried up after the war car manufacture started again but more cars were manufactured than were sold and it was not long before financial difficulties surfaced yet again. Two investors named Newton E. Van Zandt and Luther M. Rankin took over, and Fred and August were kept on as just salaried employees, but by 1924 the company was back in trouble and it went into receivership.
By 1925 it had recovered – just – with Fred as president. This is where serial entrepreneur (and, some have unkindly said, serial stock market manipulator) Errett Lobban Cord stepped in. At this time Cord was one of the most influential industrialists in America, with around 150 companies under his control.
Fred was made vice president of the company and charged with producing the finest car in the world. This was to be the Model J, which by 1932 had performance which could beat just about any other production car on earth. It was said that the only car that could pass a Model J was another Model J; and then only with the drivers permission!
The 7 litre straight eight cylinder engine had double overhead camshafts and four valves per cylinder, and could produce 265 hp. Top speed was an eye watering 119 mph but with a supercharger fitted a claimed 140 miles an hour was possible; and this was for a car which weighed between 2 1/2 and 3 tonnes!
As usual the car was only sold as a running chassis with the buyers free to go to coachbuilders and have a body of their own choice designed; this unfortunately shoved the cost up quite considerably and the Model J was not only the fastest car in America at the time but also the most expensive.
Sales, needless to say, did not meet expectations and the company's prospects were not helped when Fred had a car accident and subsequently died of pneumonia in July 1932. The death knell for the company came in 1937 after Cord's financial empire collapsed amid accusations of financial irregularities. August Duesenberg made several attempts to revive the business but without success; Duesenberg Model Js now sell for anything up to about US$10 million each.