Daimler, Maybach, and DMG At Seelberg
By 1882 both Daimler and Maybach had left Nikolaus Otto's Deutz AG Gasmotorenfabrik. In 1890 they founded their own engine business, Daimler Motoren Gesellschaft (DMG). Its purpose was the construction of small, high speed engines they had developed based on the same stationary engine technology.
DMG thus grew out of an extension of the independent businesses of Daimler and Maybach, who would revolutionize the world with their inventions for the automobile of a four-stroke petrol engine, carburetor, and so on. They 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 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 licences 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 von Steiner, who owned an investment bank, to convert the private business to a public corporation in 1890. (This agreement is regarded by some historians as a "devil's pact", as the inventors never got along with the new 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, Gottflieb Daimler had serious personal problems with Nicholas Otto, when Daimler and Maybach worked for Otto.) Daimler and Maybach continued to advocate car manufacturing and as a result even left DMG for a short period. Daimler's friend, Frederick Simms, persuaded the financiers to take Gottflieb Daimler and Wilhelm Maybach back into faltering DMG in early 1896. Their business was re-merged with DMG’s. Daimler was appointed General Inspector, Maybach chief Technical Director and Simms a director of DMG.
In 1892, Maybach designed the Phönix, an inline two-cylinder engine fitted with a new carburetor. Following the withdrawal of Gottlieb Daimler and Maybach to their own business to concentrate on cars, the enterprise had been close to a crisis but stabilised itself, selling mobile and stationary engines through a number of retailers around the world, from New York City to Moscow.
The first Daimler car, a singularly inelegant model, appeared in 1892, followed in 1895 by a two-cylinder vis á vis and, in 1897, DMG's first front-engined model, a Phönix-engined four-seat open tourer.
In 1900, Gottlieb Daimler died. Later DMG's successful Mercedes models based upon race cars designed by Wilhelm Maybach to the specifications of Emil Jellinek (who wanted a more modern and safer car, following the death of Willhelm Bauer in a Daimler racer) 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 Gottlieb's son, Paul.
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