In June of 1916, William C. Durant, John North Willys, and associates attempted to create a gigantic auto conglomerate, but the deal fell apart as quickly as it was assembled.

Readers of the New York Times on June 4, 1916 were no doubt shocked by the sensational headline: “FIVE AUTO CONCERNS JOIN GIANT MERGER.” This collossal new auto company was to be among the largest ever created, second only to Ford, uniting Willys-Overland, Chalmers, Hudson, Electric Auto-Lite, and United Motors. Their combined market capital, the story continued, was estimated at more than $200 million.

In the following days, more details emerged in the Times business pages about the proposed merger. The three men at the top of this enterprise were:

+   John North Willys, chief executive and majority shareholder in Willys-Overland Inc. of Toledo, Ohio

+   Willam Crapo Durant, founder of General Motors, Chevrolet, and United Motors

+   Louis G. Kaufman, the president of several major banks, a board member of General Motors, and a key financial backer of Durant

William C. Durant (left) and John North Willys

This was a stunning development, then or now. Earlier that very same year, Durant had just engineered his re-takeover of General Motors, using his Chevrolet shares to acquire GM stock until he controlled both companies. Ejected in 1910 from GM, the automaker he founded in 1908, by spring of 1916 he was back in the driver’s seat. What’s more, in May of 1916 Durant also created United Motors, which combined Delco, Hyatt, New Departure, Remy Electric, and the Perlman Rim Corporation to create a major auto parts supplier valued at $60 million.

Willys, a sporting goods dealer from upstate New York, had taken over the bankrupt Overland Automobile Co. of Indianapolis in 1907 and successfully transformed it into Willys-Overland of Toledo, which by 1912 became the nation’s second-largest automaker (albeit a distant second to Ford). All the while, Willys had kept a tight hold on his majority shares in the company, which by some estimates was worth $90 million in 1916 dollars.

Willys-Overland’s stately administration building, built in 1916

The ambitious plans continued to expand, with Fisk Tire & Rubber said to be joining the organization. A Times story on June 11 estimated that the proposed Durant-Willys partnership would control nearly 40 percent of the USA’s auto production under the GM, Willys-Overland, Hudson, and Chalmers banners. But only 11 days later on June 15, and after two days of what was described as intense negotiation, the grand plan completely fell apart.

A statement issued the next day (June 16) by Willys himself identified how the scheme came undone. “As the proposition was first put to me, I understood that I was to receive payment on a cash basis for the holdings which I would then turn over… when I discovered that the cash was not forthcoming and that it was the intention to carry through the proposition on a different basis I decided to withdraw.”

Willys-Overland plant Yost Street entrance at noon, 1916

In other words: Willys was apparently led to believe he was receiving cash for his Willys-Overland shares, but instead he was to receive some other form of payment—presumably a stock swap, a favorite Durant method of empire building. (Henry Ford had declined a similar Durant offer in 1908). When the cash was no longer on the table, Willys said no, thanks, and the great auto merger of 1916 never happened.

Shifting gears, Durant was able to merge Chevrolet and United Motors with General Motors in 1918, but he lost GM for the second and final time in 1920 when the board, frightened by his habitually reckless stock trading, forced him out of the company. Through an ill-timed over-expansion, Willys also nearly lost Willys-Overland in 1920 to Walter P. Chrysler and a group of bankers, but he managed to hang on.

Much of the material in this article comes from the New York Times Company’s TImes Machine, an online library of New York Times issues dating back to 1851 and a valuable historical resource.