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Nash 1938: Labor problems intensify, economy sours

Why is this at Allpar? Nash joined with Hudson in 1954 to form American Motors (AMC); Chrysler purchased a majority share of AMC in 1987.

In the fourth quarter of 1937, reported on January 21, 1938, Nash-Kelvinator’s profit was down, and its stocks were just 12.5 cents a share, off 50% from the previous period. Mason told the press that although the earnings “were not satisfactory,” he expected that strong sales in January would hold throughout the first quarter of the New Year. Unfortunately, the Great Depression returned with a vengeance; even WJRN, the labor-owned Racine radio station with studios in Kenosha, closed its doors, leaving the sister cities without a voice on the air. Citizens tuned their radio dials to stations in Milwaukee and Chicago.

1938 Nash Ambassador

British publication Autocar tested the 28 horsepower Nash Ambassador Six sedan (article supplied by Jim Raymond of the Nash Car Club of America). The magazine pointed to its overhead valves (unusual in a day of side-valve construction) and twin spark plugs for each cylinder, not to mention the “Weather Eye” fan-assisted automatic fresh-air heating/window defrosting. Autocar called it “a striking example of a big, roomy, and thoroughly comfortable car possessed of a highly practical kind of performance, achieved with an absence of mechanical effort, and offered at a strictly reasonable price in relation to these considerations.”

Autocar said that the normal top gear allowed people to run slowly in traffic and turn without downshifting. The engine was smooth, even when accelerating from low speeds in top gear. The standard (on de luxe models) overdrive could be engaged at around 40 mph; the maximum speed was just over 80 mph; when the driver dropped down to 32 mph, the overdrive automatically kicked out, leaving the ordinary top gear. There was also an overdrive second gear, which had a top speed of over 70 mph, handy for fast cruising up a hill. The gearbox was not synchronized, which Autocar said was no issue at low speeds, but required double-clutching at high speed.

The car cost £460, had a 6 volt electrical system, achieved around 18 mpg, (the large Imperial gallons), had eight inches of ground clearance, and did 0-60 mph in 20.2 seconds. 0-50 came in 13.6. The quarter mile time was 82.4 mph (on average).

The magazine praised the soft (though not independent) suspension, saying that sway under high speed turns was not excessive; the steering required nearly four turns to go lock to lock. Brakes were hydraulically activated with a reserve for high-speed stops. Seats were supportive and the engine started readily. Complaints were made about headlights and the “harsh” sounding horn; turn signals were only included with the de luxe package.

Dealers and manufacturers sponsored March “National Used Car Exchange Week,” with large advertisements in hundreds of papers. “Bring in your old car and dive out a better car! Easy Terms!” The ad promised that many 1935, 1936 and 1937 models were available, all of them “first class” transportation with “thousands of miles of first-class unused transportation in them.”

New car advertising was more aggressive than ever before. The 1938 Plymouth 5-passenger sedan was delivered for $685. Wade Motors on 52nd Street sold the economical little Willys at a starting price as low as $499. Topel Nash on Eighth Avenue would deliver a big Nash Lafayette for just $781.

George Mason instituted an inspired nationwide program with the slogan, “Sales Means Jobs.” The catchy upbeat phrase swept the country like a storm. The plan excited ordinary citizens and gave them hope. The whole country watched Nash-Kelvinator, the “go-get-‘em company.”

Mason shrewdly calculated that people would dump their old iceboxes and buy an electric refrigerator if the weather were hot enough. He put his “Sales Means Jobs” strategy to the test and demonstrated it in practical terms. Mason rolled up his shirtsleeves and went door-to-door, along with a sales team, in the roiling heat of Lincoln, Nebraska, to sell Kelvinators. The plan worked like a charm. The team was mightily impressed. So was the nation. (2)

Union members at the Milwaukee, Racine and Kenosha plants demanded on May 26 that they be paid unemployment insurance by the state during a layoff resulting from a shut down. Management countered that there had been no layoff, that it was a strike, the result of workers in Milwaukee walking off the job. It was calculated that if the state picked up the tab, Madison would shell out $85,000 a week.

The workers picked up their tools again on June 6; on July 1, the State Labor Board ruled that the men were eligible for unemployment benefits ranging from $15 to $30 a week because Nash management had not proved that there was “a bona fide labor dispute in active progress in the establishment in which the employee was employed.” (3)

With WPA highway construction in full swing throughout the county, Portland Cement took out an advertisement in the Kenosha Evening News announcing, “Vacationists bring money and what brings tourists? Concrete roads!”

racine factory

The economy’s poor performance prompted officials at Nash to announce the closing of the Racine plant on August 20, in a letter to the 800 employees, which read:

To our Racine Employees, We regret very much that general business conditions have made it necessary to discontinue our operations at our Racine plant for the time being. We hope that until such time as this plant may resume operations there may be opportunities for employment of our former Racine employees in the Kenosha plant should make application at the Kenosha employment office. Yours very truly, Nash-Kelvinator Corporation. (4)

Angry workers posted observers around the clock to prevent the removal of machinery to Kenosha. The director of the newly created Wisconsin Department of Commerce announced that he would meet with the employees on September 7. He also told the press that he “would attempt to confer with Nash officials in Kenosha.” For its part, management obtained a court order requiring union officials to appear in Racine County Court to justify why an injunction for “mass picketing” should not be issued. (5)

Negotiations began in earnest. Wisconsin’s Secretary of Commerce attended as an observer; union officials were hopeful when they learned that Nash was sending the Executive Vice President from Detroit to represent management. An 11-hour bargaining session between the union and management on the 8th was secret, neither side would divulge to the press if any progress had been made.

Six days later, Nash announced that the entire executive would meet a union committee comprised of three representatives of the factories in Milwaukee, Racine and Kenosha. William Ashe, the Secretary of Commerce, was invited to attend as well.

Federal Judge F. A. Geiger heard Nash’s petition for an injunction against the picketing vigil on Friday the 21st and postponed a decision until the 22nd.

1938 kelvinator-nashNeither side said anything until statements were prepared and released on Friday the 23rd. Ray DeVlieg, the General Works Manager, announced that Nash had closed all three factories on Wednesday night. His statement read in part, “The Racine dispute does not involve hours. The Racine dispute does not involve wages. The Racine dispute does not involve working conditions. The Racine dispute does not involve any reduction of employment in Wisconsin. The Racine dispute does not involve the elimination of the Racine workers from our payrolls. The Racine dispute centers entirely around the demand of the executive committee of the Racine local and its president, that Racine workers be given work in the Racine plant instead of the Kenosha plant, a few (ten) miles away.”

He added, “Without some certainty as to when we can start regular production of our new cars, now long delayed, we cannot continue present operations at Kenosha and Milwaukee.” (6)

DeVlieg pointed out that the shutdown affected more than fifty important Wisconsin manufacturers. To drive home his point he listed every one: Aluminum Goods in Manitowoc; American Brass in Kenosha; Air Reduction Sales in Milwaukee; Briggs & Stratton in Milwaukee; Malleable Manufacturing in Racine; Burlington Mills in Burlington and Dunneback in Kenosha; and many mre.

The union responded with an agreement that allowed sufficient equipment to be moved to Kenosha so that manufacture of the 1939 automobiles could begin.

Talks continued until management suggested that seniority be disregarded in bringing in workers from Racine into the Kenosha plant. DeVleig refused to put the suggestion in writing and when Clarence Truckey, union president, refused to send it up to the members as a trial balloon, management broke off talks.

De Vlieg was quoted as saying, “Pull the fires in the Milwaukee, Racine and Kenosha plants, close up, and throw the keys in the lake,” but denied saying it. He pointed out that the plants would close on Monday night and if the plants were closed it would affect the jobs at 2,000 men at the body plant in Milwaukee, 3,200 in Kenosha and another 1,800 in Racine. He underscored the severity of the situation by saying another 22,000 people employed in the dealer organization was also be affected. (7)

1938 nash

John Milkent, president of the UAW local in Kenosha, responded with a statement. “We have always cooperated with the company. As far as I know there is no dispute between the Kenosha local and the company. We like to live together and work together. We have sat in on several conferences because it is our duty to look after the interests of our union and Kenosha.”

The Blacksmsith and Drop Forgers Local 62 in Kenosha cabled Governor LaFollette appealing to him to “use his good offices to obtain an immediate reopening of the Nash Motors plant in Kenosha.” The cable read, “The loss of employment for almost 2,000 Nash workers added to the already serious depression will be a calamity to Kenosha.”

Adding fuel to the fire was the fact that top Nash officials were quietly being moved from Kenosha to the company’s new headquarters in Detroit. Described as an economy move, locals continued to speculate that following the transfer of white-collar jobs--which had taking place since January—production would disappear from Kenosha.

When put to a vote, the Racine workers rejected management’s proposals by a large majority. (KEN 27 Aug). Workers in Milwaukee laid down their tools in solidarity with their brothers in Racine.

kenosha nash plant

Monday’s Kenosha Evening News put the labor dispute on the front page of the paper. The impact of DeVlieg’s statement had had the desired impact as ordinary citizens came to realize exactly what a huge blow the strike and a total shutdown of the company was about to bring to the already fragile state economy. An unnamed reporter described “frantic efforts” and “hurried moves” in a bid to reopen the plants. A special meeting was called for the same evening with the Racine local of the UAW, Nash management and state government representatives. (8)

On Tuesday, Kenosha City Council and members of the Kenosha County Board called a joint session at one o’clock and offered their services in any way that might help to break the deadlock. A telegram was sent to the governor, requesting that he intervene in the crisis, but LaFollette, on the campaign trail in a bid to be elected to his fourth term, declined.

A petition to resolve the dispute was drafted by the Kenosha City and County committee members for citizens to sign. In an extraordinary move, the petition was published in full on the front page of the Kenosha Evening News. Citizens were asked to sign it and bring it into the newspaper offices before eight o’clock Tuesday evening in order that “at least five thousand of these may be transmitted to Governor LaFollette at Wisconsin Rapids.”

On Thursday the 29th, another attempt to break the labor deadlock took place at the Hotel Racine. State officials now included representatives of the labor board who met with the union. Management was prepared to attend but did not. Secretary Asche asked them to “remain away but to hold themselves in readiness for a call.” Picketing continued at the plant in Racine.

Completely unrelated news of the day was that the Seaman Body Corporation of Milwaukee, in existence since 1919, had been legally dissolved and was now a direct operating property of the Nash-Kelvinator Corporation.

inside the 1938 Nash

On September 30th, Local 72 of the UAW issued a statement, printed on the front page of the Kenosha Evening News, that proved to be a bombshell in negotiations, showing that Nash had negotiated in bad faith. Just days before the letter was handed to the Racine union committee on August 19, announcing the closing of the plant there, that the company had promised the union that employment would resume on September 6, after the annual shutdown for changeover.

Nash executives ordered the removal of equipment from the Racine plant, but picketers lay down on the railroad tracks and prevented the four fully loaded boxcars from leaving the plant. Another report said that locked automobiles were placed on the tracks to prevent engineers from bringing more boxcars into the plant. (9)

Friday was a day of proposals and counterproposals, difficult due to the number of union locals involved. At ten o’clock on Saturday morning, representatives of Nash were finally invited to sit down at the bargaining table in the Hotel Racine; the State of Wisconsin sent a representative from the Attorney General’s office as well as a personal representative of the governor, to draft a proposal that could be put to the union members for vote. The meeting was postponed until Monday because the Racine local had not yet “perfected a counter-proposal which it was planning to make regarding the situation.”

rear view of 1938 nash

The downtime was not wasted. The three executive committees of the unions involved met on Sunday in Kenosha to consolidate their position.

Nash had been shut down for a complete week when negotiations resumed on Monday afternoon, the 3rd of October. The stakes were raised when Francis J. Michel, a regional director of the UAW international, flew into Kenosha. Reverend Father Francis J. Haas, a Milwaukee and international labor board mediator, arrived from Washington. Both men were intent on resolving the strike.

x-rayPicketers continued to march around the plant in Racine. Acting in good faith, the picketers permitted a few workers to enter the premises in Kenosha to prepare the year-end statement for the automotive division and some employees were allowed to ship urgently needed parts orders to dealers.

On October 4, a proposed agreement was approved by both sides and prepared for ratification.

Thursday’s headline was a brash double header. On the left side of the page was “Racine Union Ratifies Nash Peace Proposal; Kenosha Votes Tonight” and on the right side was “Home Runs Rout (Dizzy) Dean; Yanks Win Second, 6-3.” Separating the two headlines was a photo of Polish soldiers occupying a defeated Czechoslovakia.

Details had not been released to the public but it pleased the workers. The vote by the Racine local was 640 to 218 in favor of the agreement. Nash officials felt confident enough that they immediately called the 1,000 employees back to the body plant in Milwaukee.

Wisconsin held its collective breath as Local 72 jammed into the Eagles’ Club ballroom to vote on the proposal at 7:30 PM. There were nearly four hours of passionate debate. Finally, the men cast their ballots at 11 o’clock that night. Twenty minutes later, the results were announced. Voters roundly rejected the plan by 1,129 to 569. There were thirty-seven blank ballots.

Astute leaders saved the day by presenting alternative proposals. The men voted a second time to approve the proposal with revisions that would be sent back to the negotiating team for study. They wanted their seniority to be the same as the men in Racine. “The shouts of the men on the floor were so loud that a count was deemed unnecessary,” reported the Kenosha Evening News. By the time it was all over, it was two o’clock in the morning.

The Kenosha Evening News screamed the headline in enormous bold type, “Ratify Nash Pact With Reservations” Workers in Milwaukee immediately returned to the task of making bodies. But it was not all over, yet. Norman Moe of the State Labor Board brokered a meeting on Saturday with Nash and the three unions to discuss the requested changes.

The main bone of contention was how seniority was accumulated in the two different plants. A man who had put in ten years in Racine had his time counted as such. An employee in the Kenosha plant who had been laid of for three months during any four-year period would have only nine years’ seniority. The men asked for revisions to two paragraphs in the 12-point plan.

Yet another impasse was reached when two of the unions could not agree. Three international officers from the United Auto Workers flew in from Washington to Racine to break the deadlock. Getting the men back to work was a priority for all parties. After thirty hours of grueling and intense sessions they were all in agreement that meetings would continue but the men would go back to work during the arbitration period.

With that, yet another huge bold headline splashed across the Kenosha Evening News, “Arbitrate Dispute as Nash Opens Factories.” Everyone could finally heave a sigh of relief. Workers in Racine would vote on the compromise on Monday the 10th of October and workers in Kenosha would vote on the Friday the 15th.

rear seats

Equipment finally began moving from Racine to Kenosha on Monday. The milling department in Racine was called back to work on Tuesday. The international executives from the UAW left town but would return on Friday when the vote was taken.

Dealers were frantic for new cars, and Nash officials swore the 1939 models would be rolling out the doors by Friday. Charles Nash and George Mason presided over a national dealers’ conference in Detroit that opened on Wednesday the 12th. Nash proclaimed that 1939 “is our year.” The big buzz was the all-new Weather Eye, a refinement on Nash’s revolutionary air-conditioned heater, introduced last year.

Inspired speeches from leaders swayed the workers to vote for labor peace and the final tally was overwhelmingly in favor of accepting the arbitration board’s recommendation. DeVlieg then announced that Nash was ready to add another 1,500 jobs in the three plants. That bit of news was loudly cheered by the workers.

Nash announced prices for its four series of 1939 automobiles on October 18. The least expensive in the line was the Nash Lafayette Coupe, selling for $770, while the most expensive was the Nash Ambassador Eight sedan, equipped with the revolutionary Weather Eye Conditioned Air System. It sold for $1,235. Prices had been reduced by as much as $68 from the previous year.

tape measure

Earl Topel, president of Topel Nash in Kenosha told a reporter, “The Nash designers have given us an automobile which reaches a brand new mark in grace and beauty without resorting to the freakish or bizarre.” (11)

Although all automobile assembly was now in Kenosha, a hundred new workers had been hired at Racine, all for making sheet metal parts, connecting rods, crank cases, transmission parts, and screws.

On the 24th, company officials announced that 600 new cars had been built during the previous week and that another 1,000 men would be called back to work by Nov. 15 in anticipation of higher sales and expanding consumer confidence.

The public finally got to see the new cars on Friday, October 30th, but Topel Nash jumped the gun by unveiling the new cars on Thursday night at seven o’clock. “The Nash is fire on four wheels,” bragged Topel’s advertisement. “you'll say these cars are beauties from catwalk cooling to streamlined stern-and they have new exclusive features developed by Nash engineers that will make them the car of the year.” Citizens by the hundreds turned out for the special preview showing. The Nash four-door sedan was delivered for $840.

This year, the LaFayette, the Ambassador Six and the Ambassador Eight blanketed the mid-price range with twenty-two models. They ranged in price for $770 for the LaFayette three-passenger business coupe to $1,295 for the swanky Nash Cabriolet. The exceptionally handsome cars were styled for Nash by independent designer George Walker.

More good news came to Kenoshans on November 14, when it was announced the Reconstruction Finance Corporation in Washington had loaned $400,000 to Kenosha Full-Fashioned Mills to take over the operations of the abandoned Allen-A plant. That preserved another 750 jobs in the city’s economy. The news put folks in a good mood.

All was not well at the House of Nash, unfortunately. Dissatisfied with wages in the final assembly department, some 300 disgruntled men sat down and refused to work on December 1st. They wanted a raise from 91.5 cents an hour to $1 an hour. The strike created a ripple effect and work ceased throughout parts of the plant; by the end of the day a thousand workers stood idle. The next day the body plant had to close, idling another 2,000 workers in Milwaukee.

DeVlieg issued a statement that the workers instigating the sit-down were “influenced by radical leadership.” Equally unhappy with the situation, union executives sent representatives into the plant. They ordered the wildcat strikers to leave the building at 4:30.

DeVlieg turned to the public for support. “Our present wage rates are in line with those paid in the industry,” and added, “The men know that we have reduced the prices of our new automobiles and that we also have improved the quality of the cars to tempt the public to buy more Nash cars this year. However, we did not reduce the wages of our workers. We believed that this action on our part would bring more employment to Nash workers this year. The public reception of new Nash cars and sales since we went into production show that we were right in our thinking. The cars are making a big hit with the public.” (13)

conditioned airNegotiations were added to the already ongoing arbitration talks. Finally an agreement was reached. Those participating in the unauthorized work stoppage were disciplined by the union. Nash reinstated them on payroll.

Union president John Milkent told reporters, “We will not tolerate any wildcat strikes of any kind, not only for the sake of the employees but also for the employers and the community.” The happy news made Saturday’s headline in the Kenosha Evening News.

The strike was settled and labor negotiations came to an end. It was a gentleman’s agreement, not one word of the deal was ever written down on paper. That omission would come back quickly enough to haunt Nash, Local 72 and the people of Kenosha.

Sales at Topel Nash in Kenosha were up 80% over the previous December and nationwide, Nash Motors reported that corporate sales were up 53% in December.

The annual shareholder’s report was ready on December 15. It showed that Nash-Kelvinator was in the hole by $7,655,138. Still, the company was in good shape with assets of $25,032,897. Half of that amount was in government bonds and cash.

The annual report cited labor misunderstandings with its own workers and those at suppliers, as well along with the poor economy for the downturn in sales at the Nash Motors Division.

The Kelvinator Division suffered, too. It was, however, only the second year in its history that it had experienced a sales slump. Selling refrigerators, stoves, and washing machines was even more seasonal than automobiles. (14)

Still, the year ended on an upbeat note for both Nash and the city. Employment in Kenosha had jumped 25% over the previous year. Merchants had to restock their shelves over and over as they recorded their best Christmas sales in a decade.


1. Andrea, David. Personal Interview. April 27, 2004
2. Fortune, April, 1937
3. Kenosha Evening News, July 1, 1938
4. Ibid, August 22, 1938
5. Ibid, September 7, 1938
6. Ibid, September 24, 1938
7. Ibid, September 24, 1938
8. Ibid, September 26, 1938
9. Ibid, September 30, 1938
10. Ibid, October, 9, 1938
11. Ibid, October 21, 1938
12. Ibid, November 16, 1938
13. Ibid, December 2, 1938
14. Nash-Kelvinator Annual Report, 1938

Also see: Series Contents, Nash Motors, Nash engines, Nash Metropolitan, Jeffery, AMC, the Nash Car Club of America

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