Why did this company flourish while so many others flopped?

Reinventing the Wheel

What a beauty, Fergus thought, admiring the carriage wheel he was assembling. Putting down his sandpaper, he wiped sweat from his forehead.

“Ready for lunch?” came a voice from behind.

Fergus turned to see Simon holding up their lunch buckets. “Sure thing!”

Inseparable since they were boys, the two now worked together at the McLaughlin Carriage Company. Simon specialized in axles and wheel bearings, some sheet metal too. Fergus was passionate about woodworking. He loved nothing better than to cut, shape and sand a fresh piece of hemlock.

Thankful for the break, Fergus pulled off his shop apron. The men made their way to the back of the factory and took their usual spots at the lunch table.

It was a cloudless summer day in Oshawa, Ontario. Rays of sun shone through the dusty windows above. As usual, the noise from the factory floor hammered at their ears, an echoing cacophony of banging, sawing and hollering.

“You won’t believe what I heard this morning,” Simon ventured as he fumbled for his salami sandwich.

While his coworker tore a bite out of his own sandwich, Simon let a pause hang between them. He was nervous to tell Fergus. No one liked to hear gossip that might shake up their job — never mind their entire livelihood. But it was 1906, after all, and change was knocking on their door. Even Simon could see that.

Unfazed by Simon’s drama, Fergus took his time eyeing the biscuits in his lunch bucket. Finally he replied, “Okay, tell me, what’s going on?”

FROM FARM TO FACTORY

I’m thinking about the McLaughlin Carriage Company as I wander around Heritage Park, a living history museum in Calgary, Alberta. Stopping to admire McLaughlin’s 1910 Top Buggy — the wood, the leather, the suspension — I recognize my kind of company: one with high standards. McLaughlin employees like Simon and Fergus were true craftspeople.

The buggy is grand enough on its own, but it’s the pairing with a 1918 McLaughlin-Buick motorcar that illustrates this company’s exceptional transition from the paradigm of animal power to petroleum engines.

This 1910 McLaughlin Top Buggy boasted a patented fifth-wheel mechanism on the front axle that improved comfort and safety and facilitated a tight turning radius.

First, let me back up a bit.

The McLaughlin story starts with a hardworking fellow named Robert McLaughlin. He was the son of Irish immigrants who sailed across the Atlantic Ocean for a piece of land and the promise of a better life in Canada.

In the 19th century, everyone arriving in the backwoods had to labor with their hands. Young Robert worked hard felling trees to make room for crops near the village of Tyrone, Ontario. Yet it wasn’t long before his wood chopping led to a passion for woodworking — and, by his early 30s, to entrepreneurship.

Robert started out crafting ax handles and built his first horse-drawn sled in 1867. Both items were mandatory for Canadian winters! A neighbor expressed interest in buying the sleigh and, long story short, Robert’s small farm was soon transformed into a workshop for sleds and carriages.

Within a couple of years, Robert had already outgrown the workshop. So, he expanded his operation to a larger facility in nearby Enniskillen and formed the McLaughlin Carriage Company.

Robert McLaughlin was in business.

And it was a very successful business: the workshop evolved into a three-story manufacturing complex in Oshawa, filled with hundreds of employees.

“Well, what is it?” Fergus mumbled through a mouthful of ham, lettuce and bread.

Leaning forward, Simon chose his words carefully. “It’s no secret Sam’s been trying out those horseless carriages called automobiles, right?”

“So what? He’s the boss’s son,” Fergus countered. “Curious type. Probably just fooling around with toys.” Gazing out the window, he declared, “I don’t see it going anywhere.”

“Okay, but listen ’cause I think it’s getting serious. Apparently, Sam met with some big shot at an American automobile company last week and came back all fired up to make his own motorcars.”

Fergus rolled his eyes. “That’s news? I’m not surprised. He’s been on about automobiles for a while now.” His left foot began tapping in agitation. “All this talk about motorcars taking over the world is tiring. People still like horses.”

“I know how you feel,” said Simon, “but I saw some numbers in the newspaper last week — something like a hundred and seventy-eight motorcars were registered in Ontario a couple of years ago. It’ll probably be over a thousand soon enough. I tell you, people are buying these things!”

Simon’s babbling about numbers just added to Fergus’s irritation. “Far as I’m concerned, they’re loud, smoke-belching death traps,” he shot back. “And Sam’s old man thinks the same. Just look at the company’s calendars!”

“I’ve seen them, saying automobiles are unsafe and dirty and such.” Still trying to open his friend’s mind, Simon cautiously suggested, “Fergus, getting rid of carriages might take away the soul of what built the family company, but we gotta think the world is changin’.” As if to punctuate his point, he took a big bite of his apple.

“Changin’?!” Fergus scoffed. “Carriages aren’t going anywhere. Certainly not McLaughlin carriages. Just yesterday, some guy in Toronto ordered twenty Top Buggies!”

“You’re right.” Simon nodded. “Joe over in accounting once told me we made something like fourteen thousand in ’04, but —”

“But what?”

“Well, it’s just that … if Sam has made up his mind … I don’t know.” Simon shrugged. He could see there was no changing Fergus’s beliefs.

An illustration from the 1906 McLaughlin Carriage Company calendar shows a car tipped over in a stream while a carriage cruises by

Robert McLaughlin was so amused by his bookkeeper’s antics with his new car that he made car accidents the focus of two McLaughlin calendars. In this 1906 calendar, automobiles and their drivers are literally in the ditch while stylish young couples in carriages trot by.

REINVENTING THE WHEEL: 5,000 YEARS LATER

Sam had in fact made up his mind. In 1907, the McLaughlin Motor Car Company Limited was formed, and by 1908 the iconic carriage builder had entered the automobile business. This 1918 McLaughlin-Buick I’m standing in front of at Heritage Park is a beautiful testament to the success of that pivot.

Kneeling down, I take a closer look at the craftsmanship of the McLaughlin buggy and its engine-powered successor. Both have four wheels, but the step-change in mobility is stunning. Here’s a company that transitioned from the old world to the new without compromising its commitment to quality.

I reflect on the rarity of an established company so successfully reinventing itself as it stood on the cusp of obsolescence. Sit in any boardroom these days and someone is guaranteed to declare, “Hell, we don’t want to be another Kodak or Blockbuster Video.”

In this age of technological assault and serial disruption, lamenting corporate losers — and declaring you’ll avoid the same fate — has become trite. The tough part is in the doing. Just ask anyone in the business of newspapers, entertainment or retail. I marvel at those who lead through radical change, and doubly admire those who become successful all over again.

The epitome of quality, McLaughlin automobiles were used for royal tours. Even a notorious bootlegger ran a fleet. This 1918 Touring Car had a price tag of $1,900 (about $30,000 today). By contrast, a Ford Model T went for about $300 at the time.

Technology is the easy part of advancing innovation. Mindset is the most difficult thing to change.

With a hundred years’ hindsight, and a billion cars on the road, it’s simple for an armchair analyst to declare that shifting from horseshoes to pistons was a natural move for the McLaughlins. But, in the moment, rarely is anything so obvious. Entrenchment of the status quo in corporate culture is like family tradition: tricky to break. When a product has existed a long time, and you’re in the business of selling it, thinking outside the box is hard.

To be sure, the horse-and-carriage box was really rigid. By the 19th century, human mobility was deeply embedded in our consciousness. This makes me think of a display of ancient Assyrian chariots I once saw at the British Museum. Dating back to the 9th century BCE, those stone carvings of people being pulled by horses are a reminder that the McLaughlins weren’t building anything new — Robert and his sons were simply establishing a company in a business-as-usual paradigm.

In fact, Bronze Age artifacts suggest that good ol’ human know-how figured out how to roll stuff around on carts five thousand years ago, shortly after the invention of the wheel. That’s a lot of generations to ingrain a way of life and weld mental blocks into our DNA. I call them “intransigence genes,” strongly embedded beliefs that inhibit mental flexibility. In my experience, such genetic material is widespread in corporate culture, so I understand how workers like Fergus believed the animal-powered transportation model would never die. Even Robert McLaughlin himself was afflicted with the gene.

Yet by the early 1900s, the wheels of change were accelerating. Animal power was on a fast trot out to pasture, and companies like McLaughlin had to pull their thinking out of the ruts. There was only one corporate survival plan: make a wide strategic turn by investing hard dollars into the automobile age.

As I consider the buggy and the Buick in front of me, I imagine the uneasy discussions that must have taken place in the boardrooms of carriage makers back then. The wheel — and all that made it go round — had to be rethought. Most of all, corporate culture had to be rethought.

Entrenchment of the status quo in corporate culture is like family tradition: tricky to break.

A neo-Assyrian wall panel relief of a horse-drawn chariot

A gypsum wall panel relief dating back to circa 865 BCE shows two horses pulling an Assyrian chariot. Many such carvings of the era demonstrate the multi-millennia longevity of the horse-and-buggy paradigm.

A month after Simon shared his gossip with Fergus, the two had much to talk about on their morning walk to work. The McLaughlin company had confirmed it would begin manufacturing motorcars alongside its carriages.

Simon, always the chatty one, kindled the conversation. “I’m looking forward to working on automobiles!” he said. Then, remembering that yesterday’s news would have shaken his friend, he added, “And you get to keep working on carriages!”

Plodding along grudgingly, Fergus contemplated the factory as it came into view. “Yeah, I appreciate you’re ready to move on, but I’m happy to stick to makin’ carriages. People will want the pleasure of them for a long time. They’re not going away.”

“No, not for a while anyway,” Simon granted. Despite Fergus’s declaration, he could see his friend was starting to doubt himself. “Besides, motorcar interiors are made with a lot of wood!”

But Simon’s words of consolation went into the ditch. Fergus didn’t think of himself as just a carpenter — he was a proud carriage maker.

“I don’t see myself building those smoke-belching machines,” he snapped.

Simon understood his friend’s mood. Fergus was clinging to the idea that his job — and the world — would never change. He dropped the subject, and the men walked the rest of the way in silence.

But the metalworker knew he was right: carriages were a dead end. Fergus was being his usual obstinate self. Only, this time, Simon worried that Fergus’s close-mindedness might eventually lose him a job.

Related Vignettes

Vignette featuring an illustration from the letterhead of McLaughlin Carriage Company

McLaughlin employees outside a factory building in 1908

SENSING CHANGES A MILE AWAY

Three decades after Robert’s first carriages were built, the automobile age had arrived, and the McLaughlin family business was about to be transformed.

It started with another McLaughlin employee introducing Robert’s two youngest sons, Samuel and George, to the allure of the automobile. Having inherited their father’s entrepreneurial spirit, the brothers quickly grasped the incredible change that was afoot and began transforming McLaughlin operations to produce motorcars alongside their traditional offering.

Sam was the main driver of the change. What’s especially impressive to me is that, at the time of its shift to automobiles, the McLaughlin Carriage Company was doing well — there wasn’t an immediate financial incentive to shake things up. In fact, at its peak, McLaughlin claimed it ran the largest carriage works in the British Empire.

Too often, the adage “If it ain’t broke, don’t fix it” is the default for corporate leaders. Yet the vehicles in front of me confirm that McLaughlin’s management overcame any complacency, and resistance, that plagued it. The first point of resistance? Robert McLaughlin. Sam had a tough time convincing the man they called “the Governor” that cars were anything more than a passing fad. As he says of his father in a 1954 Maclean’s article, “He honestly believed that the automobile would never replace the horse-drawn carriage; certainly not for many years; certainly not in his time.”

However, Sam didn’t let Robert stop him.

Here’s how the new thinking evolved. Sam got his first whiff of change in 1904, when Oliver Hezzelwood, McLaughlin’s bookkeeper and an early adopter of the automobile, asked Sam to make a custom top for his open-air car. He was so happy with the result that he invited Sam to drive the horseless contraption.

Oliver had ulterior motives: he saw the great opportunity in getting McLaughlin into the car business and figured Sam was his best bet for making that happen. It worked. The young McLaughlin was duly amazed, and later said, “From then on I had a new kind of wheels in my head: motor-driven wheels.”

In 1905, Sam started conversations with several American automakers. But it was a chance encounter with William Durant, head of the Buick Motor Company, that determined McLaughlin’s path. After that meeting, Sam returned to Ontario and purchased a two-cylinder Model F Buick. Impressed, he knew right away it was the car he wanted to make in Canada.

Sam headed to Michigan to meet with Durant, who himself had once run a successful carriage business. But both men were stubborn. Negotiations reached an impasse, and they agreed to disagree on friendly terms.

Back home, Sam expected his father to shut down his dreams. To his surprise, the Governor told him, “If you think you can make a go of it, go ahead.” (Robert may have been intrigued by the rosy financials Sam had dug up on Buick.) So, along with George, Sam prepared to design and produce pure McLaughlin-badged cars in their new plant.

And they almost did.

They had all the parts ready for their first hundred cars, but, close to launch, the company’s engineer fell ill. Needing a replacement, Sam telegrammed Durant, asking if he could lend them one of Buick’s engineers. Instead, Durant himself showed up with two executives, interested in continuing the conversation from their previous meeting.

They reached a deal in five minutes.

The McLaughlin Carriage Company signed a 15-year agreement with the Buick Motor Company to use its engines in McLaughlin-built cars. Robert, as president, was the one to sign the contract, but by then it seemed he’d come around to deeming automobiles a worthwhile “sideline” to the primary business. The first Buick-powered McLaughlin was completed in December 1907. In the first year, the Oshawa plant turned out 198 cars bearing the McLaughlin name (later to be called McLaughlin-Buick).

For eight years, the company manufactured autos and carriages side by side, but the sales bias of petroleum vehicles was undeniable. In 1915, even though McLaughlin was still making a carriage every 10 minutes, Sam sold off all the company’s buggies to its largest competitor.

Too often, the adage “If it ain’t broke, don’t fix it” is the default for corporate leaders.

McLaughlin employees stand in front of a factory building in 1908 with some of the company's new automobiles

McLaughlin employees gather in front of a factory building in 1908, the company’s first full year of automobile production. The vehicles at left are likely some of the first out of the shop.

As Simon made his way to the old carriage factory, a wave of nostalgia overtook him. He hadn’t been in that building since he moved over to the automobile shop all those years ago.

The door was wide open. His former haunt looked desolate. McLaughlin had finally shut down its carriage operations, and equipment was being cleared out.

Simon wandered to the area where suspension parts had been made for the Top Buggies. Reminiscing, he took off his gloves and ran his hand along a workbench pitted with decades of tool marks. One by one, he opened its small drawers, searching for something he hoped hadn’t been lost.

At the fifth drawer, he smiled. “Ah, here it is.” His worn copy of William Philipson’s The Suspension of Carriages, its blue cover thick with dust.

Flipping through the yellowed pages, Simon admired diagram after diagram of intricate designs. This 1889 beauty had once been like a bible to him. Closing the cover, Simon pushed the book into the back pocket of his overalls. He knew he’d never use it again, but he wanted it for sentimental reasons.

“All those years we spent poring over that book. And now you’re on to a new kind of manual, eh?”

Startled, Simon turned. Fergus was standing in the doorway, carriage parts stacked in his arms. The two rarely saw each other these days. Their friendship had drifted in step with the company’s changes.

“Fergus!”

“Hi, Simon.”

“I’m sorry to hear about the carriage operation shutting down.”

His old buddy shrugged in resignation. “I’m going with Tudhope.”

“You’re moving to Orillia?”

“Nope, that plant makes ambulances for the war these days,” Fergus said. “I’m headed to Brockville. That’s where we’re sending all the carriage parts.” To emphasize his point, he lifted the load in his arms.

“Gee, how many carriage companies has Jim Tudhope acquired?”

“At least four,” Fergus replied. “He’s buying them all up.”

“And, all these years on, you still get to make carriages.”

“Yes sirree, Tudhope’s focusing on building his carriage empire,” said Fergus, perhaps a little too confidently. Both men knew Jim Tudhope had been trying to make a go of it as an automaker.

“Well, I wish you the best of luck, my friend.” Simon smiled gently. He felt sorry for Fergus, going from one dead end to another.

As he started for the door, the automaker had a thought. He reached into his pocket and pulled out the book.

“Here, Fergus. You’ll have more use for this than I will.”

A diagram from and the cover of The Suspension of Carriages by William Philipson

By the late 19th century, when William Philipson’s The Suspension of Carriages was published, carriage design was highly refined. Sophisticated suspensions made for a more comfortable ride, which prolonged the horse-and-buggy era.

NOT EVERYONE KNOWS HOW TO SHIFT GEARS

Jim Tudhope was another player who dabbled in both carriages and cars. Earlier in the 1900s, he briefly manufactured motorized vehicles with help from American interests. But by 1913, his car division went bankrupt, and by the end of the First World War, he was out altogether. In 1924, he divested of his carriage business as well.

Tudhope wasn’t unique. Many companies tried to be automakers — and failed. So it raises the question, Why did McLaughlin flourish while so many others flopped?

According to Sam McLaughlin himself, the partnership with an American manufacturer didn’t guarantee success. In the 1954 Maclean’s article, Sam says, “Even with the Buick connection we had to be lucky to succeed. We just happened to pick a car that was destined to make good.”

Personally, I don’t place much weight on luck, or things “just happening” in business. I think the McLaughlins were savvy operators with a sense of urgency, while others … not so much. Tudhope’s demise in the automotive sector was the result of inefficient operations, high costs and poor-quality products. I’ve seen enough of that today. The formula for failure is a lot simpler to write than the one for success.

It’s been fun to consider the significance of McLaughlin’s two vehicles. As I prepare to leave, I take one last look, contrasting the carriage harness to the automobile’s gear selector. It’s easy to assume much of the company’s transition was about shifting from old technology to new. But the hardest thing to shift in an organization isn’t its technology, product line or manufacturing processes — it’s the attitude of its leadership and employees.

So, for me, the McLaughlin story is far more about the mindset of company leaders like Sam, and employees like Simon. The ones who embrace change and help usher it in — or at least who can cut through their emotional attachments to the past and recognize a business opportunity when they see it.

Even the Governor came around.

When Robert wrote to McLaughlin’s agents to inform them the company was dropping its carriage business, he observed, “The invention of the gasoline engine and its adaption to vehicular travel is, in my judgment, at present working a revolution in the horse-drawn vehicle trade.” Seems that intransigence gene had mutated.

Driving away from Heritage Park, I’m inspired by what the McLaughlin Carriage Company accomplished. After 50 years in business, it changed its corporate culture. In doing so, a Canadian company also played a role in changing a 5,000-year-old paradigm in personal mobility.

The formula for failure is a lot simpler to write than the one for success.

EPILOGUE

In 1918, three years after the carriage works was sold, and with the lucrative contract with Buick soon ending, the McLaughlins sold their motor car company to what is now General Motors Canada.

Cars bearing the McLaughlin-Buick name were produced until 1942. Sam remained president of General Motors until 1945 and was chair of the board until his passing in 1972, at the age of 100.

From sleds to buggies to cars, the McLaughlin family led their company through a monumental era of change.