How Reo Cars Work

By: the Auto Editors of Consumer Guide

1934, 1935, 1936 Reo Cars

The 1936 Flying Cloud, such as the one shown here, was one of Reo's final cars.

Most 1934 Reos appeared in July and September of 1933, essentially carryovers save more deeply skirted fenders and an eye-catching array of six vents per hoodside. Headlining the "real" "34s, unveiled in April, was the new S-4 Flying Cloud with nice streamlining and an optional built-in trunk for four-door sedans, though most everything else was continued from the S-2 and interim S-3 models.

Arriving in May 1933 was the "Self-Shifter," a new freebie for Royales and an $85 extra for S-4s. This was a semiautomatic transmission developed at a cost of about $2 million amidst mounting corporate finacial losses.


Innovative and dependable, the Self-Shifter replaced the conventional gearlever with an under-dash T-handle. Pushing the handle to "Forward" brought access to a pair of driving gears that changed automatically according to road speed. You pulled the handle halfway out for Neutral, all the way out for "emergency low," which also had two automatic ratios. For Reverse, turn the handle right, then pull out. The clutch pedal was used only for starting off.

Nice though this was, the Self-Shifter attracted few buyers. But surprisingly, Reo's calendar-1934 car output was slightly higher at 4460, and truck sales jumped a startling 70 percent.

Some experts cite the Self-Shifter's development cost as a key factor in Reo's demise, but management turmoil since the Great Crash also contributed. When Ransom Olds moved up to board chairman in 1923, new president Richard Scott greatly expanded production, which left Reo with money-losing excess capacity when the Depression severely shrunk the medium-price market.

At Old's insistence, Scott was replaced in 1930 by William Wilson, an executive of the Murray Body Company. But when Wilson couldn't halt the sales slide, Scott got another chance. That angered Olds, yet Scott's supporters were entrenched, prompting the founder to resign in December 1933. That shook up embattled Reo stockholders, who persuaded Olds to return the following April and elected Donald E. Bates as president. Hopes were high that things would turn around.

Meanwhile, the S-4 continued into 1935 as the little-changed S-5, and Eights gave way to a lowly S-7 Royale Six coupe and sedan, essentially S-5s with a 95-bhp engine selling for $985. Both were gone by early 1936, a sorry end for the once-mighty Royale.

But somehow, Reo managed yet another new Flying Cloud for 1935. Designated A-6, this offered two- and four-door Hayes-built fastback sedans with 115-inch wheelbase and a superior new 90-bhp 228-cid six with seven main bearings, aluminum head, automatic choke, and external vibration damper. Front styling vaguely recalled Auburn, with flared fenders and vee'd bumper. For all that, Ransom Olds disliked the A-6, calling its $450,000 tooling cost a waste of money.

But as at Olds Motor Works long before, his colleagues disagreed, and they pushed ahead for '36. They were doubtless encouraged by Reo's first profit in years, a slim $42,156 for the first half of 1935 on meager sales of cars and trucks. Still seeking to bolster income, the firm shared its body dies with erstwhile rival, Graham-Paige.

Reo announced "America's Finest Six" in November 1935, but it was just an A-6 with fuller fenders, rubber-tipped bumper guards, optional "Zeppelin-style" fender lamps, and a reworked hood and radiator wearing bright trim a la Pontiac's "Silver Streaks." The Self-Shifter was canned for conventional over-drive as a $50 extra for standard and DeLuxe models priced at $795-$895. But public confidence in Reo had nearly evaporated, so the firm built a mere 3206 cars that year, versus 4692 for calendar-year 1935.

With trucks now far more profitable than cars (the G-P deal had produced little revenue), the Reo board voted on May 18, 1936, to move truck assembly into the main Lansing plant; on September 3rd, Reo officially left the auto business. Though the company lost nearly $1.4 million on its 1936 cars, it was able to write off $604,000 for terminating its auto operations. Reo then turned exclusively to the truck field. Ironically, it would thrive there far longer than it had with cars, producing for the next 40 or so years under the Reo and Diamond-Reo nameplates.

For more on defunct American cars, see: