Reo would remain in the truck business for some years to come, but the company’s last passenger car was produced in 1936.

Ransom E. Olds was one of the pioneers of the auto industry. His curved-dash Oldsmobile of 1901 was the first volume-produced car in the USA, but he soon grew dissatisfied with his investors in the Olds Motor Works and left in 1904 to form the REO Motor Car Company, also in Lansing, Michigan. Reo (pronounced REE-oh, unlike the rock band) produced both cars and trucks, the cars being of high quality and well regarded, though they never sold in any great numbers. The company’s best year in the car biz was 1928 with around 21,000 produced.

When the U.S. economy plunged into the Great Depression in 1932, the smaller  automakers were nearly erased from the landscape, and Reo was no exception. Production rapidly plummeted to an unsustainable level, fewer than 4,000 cars annually. Hoping to engineer a turnaround, R.E.Olds returned from retirement in 1933 to retake his seat as chairman. Meanwhile, a revolving door of chief executives, none of whom seemed to impress Olds very much, labored to keep the company afloat.

An ambitious new model introduced in January of 1935, the Flying Cloud 6-A, featured a 115-in wheelbase chassis and an up-to-date L-head six with seven main bearings and an aluminum head. Displacing 228 cubic inches, the six was good for 90 horsepower. The new product represented a sizable investment in tooling, but it did nothing to reverse the carmaker’s fortunes. Volume remanied at  the three-thousand level.

The 1936 Flying Cloud 6-D, marketed as “America’s Finest Six,” was a continuation of the ’35 6-A with some significant improvements, including a stiffer X-braced chassis and an all-steel top. Reo’s Self-Shifter semi-automatic transmission was discontinued in favor of a synchonized three-speed gearbox with overdrive. The exterior recieved a minor facelift with a restyled die-cast grille and side louvers.

Body styles were limited to three: a Two-Door Coach (the Deluxe model was called a Brougham), a Four-Door Sedan, and a Four-Door Touring Sedan with trunk. To recoup some of the cost of the Hayes-manufactured bodies, Reo negotiated a licensing deal of $7.50 per unit allowing Graham in Detroit to use the same body shell. Prices ranged from $795 for the Coach to $895 for a Deluxe Sedan, placing the Flying Cloud in direct competition with Oldsmobile, a division of General Motors.since 1908.

By May of 1936 it was evident that the situation was growing hopeless, and the truck production line was moved into the main assembly building at the Lansing plant. In September the company announced that it was leaving the passenger-car market for good, with only 3,206 Flying Clouds produced for the year.

Reo would continue to produce trucks, buses, and-quality lawn equipment through 1957, when it was acquired by White Motor, which merged Reo with Diamond T to form Diamond Reo. While Diamond Reo was liquidated in 1974, the name survived in various forms into the 21st century.