Why did the Studebakers go under?

Not that it didn't happen, I have never read or heard about the quota requirement. I do know of reports that to receive the $5.00 a person was investigated to confirm they didn't smoke and were living in away that ford approved of.

 

This article brings back good memories. I used to admire the Stude inventory at Rogers Studebaker in Kenmore NY. in the mid 50's. I used to stop for a 5 cent donut after school and then walk up the car ramp to the 2nd. floor to look at the 55 Speedster and many other mid 50's Studes. I also remember my 64 GT. Hawk that was my drag race car.

 

Remember the "LARK?"

 

I heard they started hangin' around with the wrong crowd doing drugs and drinking too much. MTV Behind the music-Studebaker

 

Sleepers..........Some of those Larks would haul ass..!!!

 

Me thinks you are confused,...maybe doing drugs, and drinking too much.
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I'll weigh in. The company was invested in a lot of companies and enterprises. The board of directors was least interested in the car part of Studebaker. The plant was actuall pretty modern when Packard bought Studebaker. That's right Packard bought Studebaker. The reason Studebaker survived was for lack of a tape measure. Packard needed to rebuild it's own assembly line. It was felt that buying out Studebaker who was for lack of good managment struggling to survive would give them a modern plant for a small investment. The problem is no one ever bothered to measure the assembly line at South Bend. It was too narrow to build Packards. That is why the 1956 Packards were Studebaker bodies with Packard fines, grill ect bolted on. Much like Chevy and GMC trucks. Once the cost of shutting down the plant to modify it to build Packards was realized it was too late as there wasn't enough money left after the purchase to rebuild the plant. So Packard went bye bye and Studebaker survived. Bad managment and lack of board support killed off Studebaker.

If you think they made bad cars your wrong. One of the best ratings for dependability. Some of the industry firsts happened at Studebaker. Firs American car with standard front disc brakes and more. They won the "Mobil Economy Run" year after year. I could go on but it's water under the bridge. I grew up with them and left for another brand. Went back three years ago and will never leave again. I love my Studebakers and when I go out of the store at the mall I don't have to look all over to find my car. It's always the only one in the lot.
Dan

 

Yeah, but boy were they UGLY. Good friend of mine dad owned a Studebaker dealership. During the years 1958-1961 his dad made him drive a 1949 or 1950 bulletnose. He hated that car, but what do you do when you dad is the dealer?

 

Still dont get that arguement, I absolutely love Larks. Great style and very different from what the big three were up to.

Pops wants a Bullet Nose, great looking car as well, 50s Comanders are incredible too, but in the end I still like the Larks better.

 

I may have posted this before, but my first ride in a truly fast car was when my older brothers adult friend stopped by after having just picked up his brand new '63 Daytona Super Lark. R-1 powered, Borg-Warner T-10 4 speed, Dana 44 Twin-Traction posi. diff. bucket seats, tach. Man it was a sweet Red hardtop. They let kid brother ride along, next thing I knew, we were out on a country road doing 130 MPH...! Made a lifetime impression!
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My best friend in High School had a '50 Bullet Nose that was given to him by his Grandfather who bought it new, and drove it to California after he retired from Studebaker in South Bend Ind. That car was great, we could put a case in each of the rear armrests. We'd go out to the orange groves on the weekend, get plastered, go cruisin' on E Street in San Berdoo CA. then over to Market St. in Riverside. Good Times!
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The story told by those who tell the story of the Hudson-Nash "merger"--which was actually Nash-Kelvinator buying out a sinking Hudson Motor Car Co.--is that Packard bought Studebaker without actually understanding how far in debt that Studebaker was.

From WIKIPEDIA: "It was hoped that Packard would benefit from Studebaker's larger dealer network. Studebaker hoped to gain through the additional strength that Packard's cash position could provide...
...Packard executives soon discovered that Studebaker had been less than forthcoming in all of its financial and sales records. The situation was considerably more dire than Nance and his team were led to believe; Studebaker's break-even point was an unreachable 282,000 cars at a time when the company had barely sold 82,000 cars in 1954. Furthering the new company's problems was the loss of about 30% of Studebaker's dealer network by 1956...
...Following a disastrous sales year in 1956, Nance resigned and Studebaker-Packard entered a management agreement with the Curtiss-Wright Corporation..."

So a lot of the problem was management-related...first, it's claimed that when the merger took place, Studebaker had been less-than-honest about their balance sheet; then, by losing a number of dealers by '56, the "assets" that Packard had hoped to gain from the merger were largely an illusion.

 

I made a big post in the Nash history thread about the links between SPC (Studebaker-Packard Corporation) and AMC. It falls somewhat into this thread, but no need to repost, read it here: http://www.jalopyjournal.com/forum/showthread.php?t=640072&highlight=nash+history

My understanding is that Nance orchestrated the agreement with Curtiss-Wright on his way out. May be it was his way of making amends for the mistake of buying Studebaker.

I never heard the story about the assembly line being too narrow for Packards. I tend to disbelieve that one. Packards weren't much bigger than the big Studes. 1956 big Packard (last true Packard body) had a 127" wheelbase, front tread of 60.0", rear tread of 60.8". The car would have been 14-18" wider than the tread. The 57 "Packardbaker" was built on the Studebaker President body (biggest Stude). It had a 120.5" wheelbase, front/rear treads of 56.7"/55.7". I doubt the 3-6" wider Packard made a difference on the assembly line. It possibly could for future designs, but nothing past the 56 had been set in metal -- future designs could have been altered to fit the line.

The main reason for the demise of a true Packard body was simply costs. It costs a lot to build an exclusive body. Economically the best option was to build on a higher production body. Since the Studebaker shared components with other Studes that had to be it. Another reason was the Stude plant had to build 100,000 cars just to break even. The Stude people reportedly hid that fact from Packard's accountants. They probably weren't looking real hard, felt they were getting a good deal from Stude and jumped on it... way too fast, obviously! Nance didn't find out about the 100K break-even point until AFTER the deal was signed and Packard had already shut down their ancient Detroit plant.

 

Maybe because this was substituted for the Studebaker engine.


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Hey, Stude had to do something! Couldn't keep the engine plant in South Bend going. The only reason GM sold Stude engines (and why they retreated to Canada, because GM would sell them engines in Canada) is because Auto Pact (http://american-business.org/55-auto-pact.html), the agreement between the US and Canada to allow more cars and parts to go across the border free of duty, wasn't signed until 65. Under that agreement 75% of US car sales still had to be manufactured in Canada -- the remaining 25% could be imported duty free. On top of that, 60% of the car had to be made in Canada to be called Canadian made. GM benefited by selling Studebaker engines. The added production made the GM engine plant more profitable, and Studebaker didn't have enough sales to take much market share form GM. Besides, what little they did take GM still made money on! The flip side of the agreement (the US side) was a bit more lenient. To ship across to the US a car had to have at least 50% Canadian and/or US content -- a mix of both was fine. That just kept Japanese companies from using Canada as a duty free in-road to the US.

A similar scenario was repeated in South Africa, and probably other countries in the 60s. I know that AMC (and I think Toyota) bought GM sixes from a GM plant in SA in the early 70s because of in-country content laws. GM had the capital to build an engine plant, but didn't want to. AMC (and Toyota?) agreed to buy engines from them if they would. GM also bought a few parts from those two in order to keep SA content up and taxes low. That agreement only lasted a few years as US companies pulled out of SA in the mid 70s due to Apartheid (seggregation/discrimination by the government).

 

The salient point that needs to be made here is that Studebaker did NOT 'go under'.
Yes, the automobile line was losing money for years.
The Stude board of directors chose (chose) to diversify the company and cease auto production.
They kept the Canadian production going mostly to honor dealership agreements and contracts.
The Studebaker legacy continues on via several of their other companies
(many of them since sold)...
Onan
STP
Paxton
Clarke Floor Equipment
Gravely
Cooper Industries
Studebaker/Worthington Leasing
Big-4
Cincinnati Testing Labs
Gering Plastics
(and a few I probably forgot)

So they quit building cars...... But they didn't 'go under'...

 

Point well taken! Actually, SPC was already rather well diversified before Studebaker was even sold to Packard. That fact probably helped with the decision to cease the auto operation, which was bleeding the company dry. AMC was reasonably diversified in the mid 70s when they started having problems, but chose to go the other route and sell off subsidiaries to keep making cars a while longer. Well, it worked for another 17 years...

 

Studebaker had a long tradition of survival and had weathered many calamities over the years. Yet, as the euphoria of the (1952) centennial faded, the company was facing a situation more dangerous than it had ever encountered. The record sales of 1950 had dropped sharply by 1953-54. Studebaker's share of the market was down and meager profits had now turned to loss. Since 1950 the board at Studebaker had repeatedly turned down Vance's requests to modernize factory facilities and instead payed out gracious dividends. Ford and GM, on the other hand, were spending vast sums on modernization. Adding fuel to the fire were Studebaker's labor costs. Their employees were the best paid in the industry and though the company had always enjoyed good relations with labor, Studebaker's more than fair treatment of it's work force was now crippling the company.

Studebaker was not the only car maker whose profits had dwindled; all of the independent manufacturers found themselves in similar circumstances. Where they had benefited in the post war years, they now faced a crisis. The only solution was merger. In 1953 Kaiser and Willys-Overland joined forces and concentrated on producing the Jeep. Then Hudson and Nash merged to form American Motors. Studebaker too was looking at a merger.

In 1954 Studebaker and Packard began talks on the possibility of merging but it quickly became clear that while Packard was in favor of a merger, they would not move forward until Studebaker brought it's labor costs down. The problem at hand was two fold. Studebakers were more expensive than their Ford / GM counterparts and Studebaker employees on average received 20% higher wages than the rest of the industry. Additionally, reports were now filtering in that suggested that the quality of the much vaunted '53 models was lacking. The labor situation needed a major overhaul.

In 1954 the longest and bitterest labor negotiations at Studebaker Corporation began. Management believed that the very survival of Studebaker was in the balance but they needed to convince labor. During the talks management took the unprecedented step of opening company books to labor. It was clear that costs had to be reduced. After three months of negotiations an agreement was reached that reduced wages by 18%. Labor had insisted on concessions to offset the cuts but when the workers were briefed on the contract, all hell broke loose and the contract was voted down. Management retaliated by stating it's intention to terminate the contract and then published ads in South Bend news papers explaining the company's position. Once the rank and file understood how critical labor costs were to the survival of Studebaker, they voted to accept.

Negotiating the new labor agreement paved the way to merge with Packard. The newly organized Studebaker-Packard Corporation was to be headed by James J. Nance, head of Packard, who assumed the roles of President and CEO. Hoffman, who had now returned from government duties, became Chairman of the Board and Vance took on Chairman of the Executive Committee.

Prior to Packard, Nance had headed GE Hotpoint where he had built up Hotpoint from an obscure appliance maker to the number three appliance company in the market. Investors and observers alike felt his no non-sense leadership would turn Studebaker around. What he encountered at South Bend was a company steeped in tradition. A tradition going back to the Studebaker brothers themselves who had always saw to it that their employees were well cared for. As Nance implemented what he felt were necessary changes, he encountered resistance from Studebaker personnel including Vance and Hoffman. As long as Nance's changes involved the executive staff he seemed to be on solid ground but attempts to "improve" work rules and standards among rank and file met with resistance and ultimately fueled slowdowns, work stoppages and a general strike lasting 36 days in early 1955.

via:http://stude100.com
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50 Champion? I thought it was the 50 COMMANDER...

 

Because Obama wasn't around to bail them out!!!!

 

As some of you are in sales and marketing, you know the public can be manipulated. So it's the fifties and we are "used to" squarish, fined, wedged" shaped vehicles.

I remember as a kid, seeing those torpedo, airplane shaped studebakers coming down the road, then in rear view, the very odd venetian blinds that filled that wrap around rear window. Look at that wierd car!

Esthetically that were not ugly, but to the average Joe, Madison avenue had us, comforming to the status quo was what we wanted.

 

OT:

My wife really likes Studebakers. She loves the horn rings and we have a Studebaker tailgate that she is making a bench out of. Her favorite quote is from HollyWood Knights: "Studebaker, The car of the Future!"

 

They were to good lookin !!!!!!!!!