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Daimler-Motoren-Gesellschaft (Daimler Motor Company or DMG) was a German engine and later automobile manufacturer that operated from 1890 until 1926. Founded by Gottlieb Daimler and Wilhelm Maybach, it was based first in Cannstatt near Stuttgart. Daimler died in 1900 and the company moved in 1903 to Stuttgart-Untertürkheim, after the original factory was destroyed by fire, and again to Berlin in 1922. Other factories were located in Marienfelde (near Berlin) and Sindelfingen.
The company started as a petrol engine producer, but after the success of a small number of race cars built on contract by Wilhelm Maybach for Emil Jellinek, it began to produce the Mercedes model of 1902, after which automobile production expanded to become DMG's main product and it built several models.
Because of the post World War One German economic crisis, DMG merged in 1926 with Benz & Cie., to become Daimler-Benz and adopted Mercedes-Benz as its automobile trademark. A further merger occurred in 1998 with Chrysler to become DaimlerChrysler.
By 1882 both Daimler and Maybach had left Nikolaus Otto's Deutz AG Gasmotorenfabrik and, eight years later, in 1890 they would found their own engine company, the Daimler Motoren Gesellschaft (Daimler Engines Company) or DMG. Its purpose was the construction of small, high speed engines based on the same stationary engine technology.
DMG thus grew out of an extension of the independent businesses of Gottlieb Daimler and Wilhelm Maybach, both workaholic inventors who would revolutionize the world with their inventions for the automobile of a four-stroke petrol engine, carburetor, etc. The company would manufacture small internal combustion engines suitable for use on land, sea, and in the air (the basis for a symbol Daimler devised of a three pointed star, with each point indicating a different way).
On July 5, 1887, Daimler purchased a property in Seelberg Hill (Cannstatt) previously owned by the Zeitler & Missel who had used it as a precious metal foundry. The site covered 2,903 square meters, cost 30,200 Goldmark, and from it they produced engines for their successful Neckar motorboat. They also sold licenses for others to make their engine products and Seelberg became a centre of the rapidly growing automobile industry.
Daimler ran into financial problems because sales were not high enough and the licences didn't yield significant profit. An agreement was reached with the financiers Max Von Duttenhofer and William Lorenz, both of whom were also munitions manufacturers, along with the influential banker Kilian Steiner, who owned an Investment Bank, to convert the private company to a public one in 1890. (This agreement is regarded by some historians as a "devil's pact", as the inventors never got along with the new company status.)
Not really believing in automobile production the financiers expanded the stationary engine business, as they were selling well, and even considered a merger with Otto's Deutz-AG. (During 1882, Daimler had serious personal problems with that company's chairman, Nicholas Otto, when Daimler and Maybach worked for Otto.) Daimler and Maybach continued to advocate car manufacturing and as a result even left the DMG company for a short period.
Two years later, in 1892, the enterprise was close to a crisis, but stabilised itself by selling mobile and stationary engines through a number of retailers around the world, from New York City to Moscow.
In 1900, Daimler died, but later DMG's successful Mercedes models based upon race cars designed by Maybach to the specifications of Emil Jellinek changed the board's outlook in favour of the automobile. Maybach continued as designer for a while, but quit in 1909 and was replaced by Paul Daimler (Gottlieb's son).
DMG's automobile sales took off, particularly with the first Daimler-Mercedes engine designed by Maybach placed into several race cars of 1900 built for Emil Jellinek. That race car was later referred to as the Mercedes 35 hp. Production capacity was extended to Untertürkheim. In 1902, the company officially adopted Mercedes as its automobile trademark, producing the first of the Mercedes models and the number of employees went from 821 (1903) to 2,200 (1904).
1906 to 1913 were further expansion years, with the creation of new capacity reducing the number of external suppliers. Increased mechanization took the annual productivity from 0.7 cars per worker, to 10. In 1911, shares of DMG were listed on the Stuttgart stock exchange.
On October 2, 1902, DMG opened a new works in the mountainous region to the south of Berlin. Its scope was initially limited to motorboat and marine engines. Later, it expanded into making trucks (1905) and fire trucks (1907). The region became a centre of the automobile industry, and other companies moved in.
Untertürkheim was an ideal location to site a large factory as it was close to both the Neckar river and the Stuttgart-Ulm railroad. The local Mayor Eduard Fiechtner sold the land (185,000 square meters) at a low price and also arranged for a railroad extension with its own station and energy from the Neckar's hydro-electric plant which had been built in 1900.
DMG had planned to open the facility in 1905 but the total destruction of Cannstatt's factory by fire in 1903 hastened the work and the new Art-Nouveau building, with a jagged-roof, was brought forward to start production in December 1903. The work force continued to grow.
On May 17, 1904, Unterturkheim became the company's headquarters with the rest of the administration staff moving in on May 29. In 1913, an additional 220,000 square meters were acquired and between 1915 and 1918 it was extended further. By the 1920s, Untertürkheim had almost all the production processes on one site from foundries to final car assembly. In 1925 the DMG design department also moved in.
On the night of June 10, 1903, the original Seelberg-Cannstatt plant suffered a great fire. All the machinery and 93 finished Mercedes cars, a quarter of the annual production, were destroyed, together with a small museum with historical items like Daimler-Maybach's first ever motorcycle.
The displaced workers received haven-salaries and additional bread rations. Neighboring companies lent workshops, allowing production to continue. DMG created a Relief Fund (one of the first worker insurance schemes) and began building separator blocks in all its plants.
The following year, 1904, the whole operation moved to Untertürkheim. The last unit produced in Seelberg rolled out in the first weeks of 1905.
At the outbreak of the First World War, in 1914, companies rushed to produce war supplies. In the autumn of 1915, DMG opened the Sindelfingen factory for military vehicles, aircraft engines, and even entire aircraft. After the war, limited by the Versailles Treaty, it produced only automobile bodies.
The production of motorboats by Daimler and Maybach began early, in 1886, with the Neckar (4.5 meters long with a speed of 11 km/h (6 knots)), the first in the world, and tested on the local Neckar river. That boat became DMG's first commercial hit, helped by the poor state of Germany's roads. Once the company was formed, motorboat production became one of the new financiers' main interests and lead in 1902 to the building of the Berlin-Marienfelde factory specifically for their manufacture.
Daimler had sold automobile-engine licenses all over the world including to France, Austria, the UK, and the United States through an agreement with the piano-maker Steinway, in New York.
The first DMG automobile sale took place in August, 1892 (its registration still survives) to the Sultan of Morocco.
Commercial vehicles had also been made mainly using a Phoenix engine, but up to 1900, when Daimler died, the bodies had not been standardised.
In 1902, the Mercedes car was announced, compact and modern, with many improved features, a move which sparked the board's interest in automobile production. Mercedes then became DMG's main car brand name. There were some small exceptions: the Mercedes Simplex of 1902-1909, (the name indicating it being "easy to drive") and the Mercedes Knight of 1910-1924, featuring Charles Yale Knight's sleeve-valve engine. All models were priced by their hp-rating.
The first truck, of 1.5 tons payload, was sold to London's British Motor Syndicate Ltd on October 1, 1896. Its rear-mounted Phoenix engine produced 4 hp at 700 rpm.
In 1897, the production of light commercial vehicles began. At that time they were popularly called business vehicles, and were very successful in the United Kingdom.
At the first Paris Motor Show, in 1898, a 5-ton truck was displayed, with a front-mounted engine.
In 1894, while working from temporary premises in the unused Hermann Hotel in Cannstatt, Gottlieb Daimler, his son Paul, and Wilhelm Maybach designed the Phoenix engine. It amazed the automobile world with:
* four cylinders placed vertical and parallel (a first for an automobile engine)
* camshaft-operated exhaust valves
* spray-nozzle carburetor (patented by Maybach in 1893)
* improvements in the belt-drive system.
The Phoenix won the first car-race in history, The Paris to Rouen 1894, in the petrol engine category, even beating some steam-cars,: .
Production of this engine which was put into cars, trucks, and boats became DMG's main product until the Mercedes car of 1902.
An automobile that would later be called the Mercedes 35 hp was created by Maybach to the order of the successful Austrian merchant Emil Jellinek who became fascinated by both the Phoenix engine and race cars.
Jellinek competed as a driver, painting "Mercedes" (Spanish for godsend), on the automobiles he raced after his 10-year-old daughter. Jellinek's pursuit of higher speed brought him to Stuttgart personally, to Wilhelm Maybach's office where he also met with Paul Daimler, son of Gottlieb. Together they designed a new kind of automobile that would be "larger, wider, and with a lower center of gravity". A small number would be produced for Jellinek under contract. This was the first true automobile designed by DMG, as opposed to a coach with an engine fitted into it.
Blending the technical refinements of Maybach's new 4-cylinder engine, with a new chassis the automobile stunned the motorsport world of 1901. Jellinek had promised to purchase a large number of the race cars, (36 units for 550,000 Goldmark), if he could also be the sole concessionaire in Austria-Hungary, France, Belgium, and the USA, using the name Daimler-Mercedes for the engine, and also become a member of the Board of Management.
In June 1902, after DMG realized that they had already conceded their Daimler trademark to Panhard & Levasor for the whole of France, they decided to name all their cars Mercedes after the engine and began to produce the Mercedes series. The great demand for the car soon had DMG operating at full-capacity.
Daimler-Benz and the Mercedes-Benz brand
For the two companies to survive the financial problems of the day, in 1919, the Benz & Cie. proposed a merger, but DMG formally rejected it in December. Then, as the German crisis worsened, the struggling companies met again in 1924 and signed an Agreement of Mutual Interest, valid until the year 2000. They standardized design, production, purchasing, sales, and advertising-marketing their car models jointly-although keeping their respective brands.
In June 28, 1926, DMG and Benz & Cie. merged into the Daimler-Benz Company, establishing its headquarters in the Untertürkheim factory.
Their automobiles were baptized Mercedes Benz, in honour of DMG's most important car model and the last name of Karl Benz. Its new trademark consisted of a three-pointed star surrounded by the traditional laurels of Karl Benz's logo and labeled Mercedes Benz. The next year, 1927, the number of units sold tripled to 7,918, and diesel truck production was launched.