The company was founded by Rollie, William, Frank and Claude Fageol in 1916 to manufacture motor trucks, farm tractors and automobiles in Oakland, California. It was located next to the Chevrolet factory originally built in 1917 by William Durant, which later became part of GM.
The initial Fageol farm tractor was a re-labeled Hamilton model, designed and built by Rush Hamilton of Geyserville, California. As a result of the many tractor performance trials of the day, the tractor was redesigned to be more compatible with the needs of the West Coast. The Fageol version was designed by a team led by Horatio Smith with the cooperation of Hamilton. In about 1923, the tractor business was sold to the Great Western Motors Company of San Jose. Hamilton and Smith went with the sale.
In 1921, Fageol became the first company to build a bus from the ground up. This new style bus was initially called "Safety Bus". The goal was to build a bus that was resistant to overturning when cornering. It had a wide track, and was lower to the ground for ease of entry and exit. Following the successful introduction, the vehicles were renamed "Safety Coaches", a term intended to imply greater value.