Why did the Studebakers go under?

What he said.
Sure glad businesses learned from Stude's mistake and don't do that these days...

 

This question is asked about the wrong time period. Studebaker was the only company to transition from covered wagons to cars. One out of hundreds.

 

Ditto on the Ugly!

 

The car culture of those days was quite different. When somebody got a new car it was an event. Everybody wanted the latest and greatest so not changing body style every year so people knew you had a new car really hurt sales.

Having the fenders rust out in 3 years didn't help either.

 

http://auto.howstuffworks.com/1960s-studebaker-concept-cars.htm

Here's an interesting look at what was in the works if things had gone better. The wagon and the Sceptre were very decent looking, I'm not so sure about the 4 door sedan concept.

 

True, but all cars rotted out in a few years in that era. I can't tell you the number of 50s-60s cars I've worked on that were only on the road maybe 10 years tops, about the average lifespan for cars of that era, and they have redone quarter panels or redone fender tops over the headlights. I parted out a '64 Gran Prix that looked to have last been on the road in 1971 going by the reciepts in the console and the body didn't look bad - until I cut into the rear quarters and found they'd been patched over on both sides with new tin right over the old.

 

Also another little known fact is that Albert Broccoli and Pinewood studios wanted a Avanti for James Bond to drive in Goldfinger, but Studebaker could not afford to allocate one to the studio as they were so far behind with actual orders.[/QUOTE]

I'm sorry... but I'm havin' a tough time with this statement. 007 in a Stude? Its' just not done old boy. Truth... an Avanti in any trim is a thing to be desired. I think that the selection of the Mustang, over say an Italian or German make, for the other 'feature' car was pure concession to the American movie market.
This is in no way a slam on Studebaker. One of my very earlyest memorys is of my Great-Great Granpaws yellow M(something) Stude truck. The Granitelli/Studebaker exploits at Bonneville (and Indy) were a big deal when I was a pup. In casual research I'v found the Brothers came to California with the Gold Rush and made their bones making wheel barrows for the miners. Local connection. If I must make a confession: I let a local "Parnelli" talk me into talking my grandparents out of a perfectly good 4 door bullet noise, destroying it for an ill fated dirt car project that never saw combat. A situation which I, (and a not so favorite Aunte of mine, who apparently had strong personal attachment to the rear compartment) have never really forgiven myself.

 

The Packerd deal is greatly miss understood. Packard actually bought Studebaker. They did it to get their hands on the more modern assembly plant in South Bend rather than remodeling the Packard plant or building a new one. After the deal was done someone finally decided to measure the width of the plants assembly line. Much to their dismay the assembly line was too narrow for the Packard bodies. So instead of producing new and better Packards they were forced to put Packard engines in Studebakers (one year and one model only) and make bolt on pieces to fit the Studebaker bodies to make them kinda look like a Packard. One of the ugliest Studebakers came out this mess. The Packard hawk was a car only it's own mother could love and she kicked it out of the nest. When the Packards didn't sell the only choice was to discontinue the Packard and concentrate on the Studebakers. It's kind of funny that Packards plan was to faze out the Studebakers and just make Packards within two to three years. Instead forgettting to stop to measure the line cost them the brand. Wierd how things work out sometimes.

 

Doesn't Bond's American colleague Felix Leiter feature in that one? I seem to recall his driving a Cadillac-powered Stude in one of the books.

Now that's interesting!


There are some broader questions here that are worth pondering. I'm not sure industry itself really understand how economies of scale relate to social and political conditions, for example. It would make for a fascinating analysis. We're inclined to see economies of scale as a sort of law of nature, and the consequent pattern of manufacturing as a sort of historical inevitability. I've been wondering, however, if both are not contingent on specific measures being taken by governments. Though inspired by British and, to a lesser extent, Dutch precedents, American laws of incorporation and the instruments of investment created thereby gave the early industry a very definite shape. After c.1930 the US road-building policy again had a huge influence, in its secondary effects bigger than that of the German equivalent at the time. In that sense the influence of government support of railway expansion had a much greater influence on the organizational shape the motor industry would subsequently develop than it would seem at first. Then, since c.1955 the role of product regulations has had an increasing effect, generally in favour of the since-then status quo.

My hypothesis in all this is the old Mutualist contention that corporate gigantism is the product not of private enterprise but of State policy, without which the US motor industry might have settled into more of a Cunningham/McFarlan/Daniels or Wasp/Velie type of character, though gradually broadening in socio-economic penetration. One wonders what that might have meant both for the environment and the practical liberty of Americans.

 

It all was because of General Motors.From a late 40's up into the 60's GM set the standard for style and performance.Around 1959 GM was dragged before the Feds for suspected violations of monopoly laws.GM had 60 percent of the domestic market sales.Not much left for everyone else.
And what was Studebaker's image that the general car buyer saw? Not the prestige and power of an Olds shown blasting down a highway in the ads of the era.Or an attractive couple parking their Caddy or Lincoln at the country club.Or the flashy style and performance of a 57 Desoto. Or even the utility of a Chevy or Ford that when optioned with 300 hp could outrun the expensive cars.
Studebaker's were oddly styled cars with limited appeal.

 

from the late 1980s to the early 1990s I traded with an elderly car dealer who ran a junker used car lot. in his prime he had worked for a large Chevy dealer from the late 1940s-60s.

he used to talk about "the 1955 blitz". he said that in '55, GM, Ford and Chrysler decided that there were too many players in the field and made a pact to sell their cars at below cost to thin out the herd.

Studebaker, Hudson, Nash, Willys and Packard were forced to sell outdated, pudgy cars at higher prices than the sleek, newly bodied GM, FoMoCo and MOPAR products. this 'blitz' caused the already financial weak smaller companies to move towards failure at break-neck speed.

I have no clue whether or not the story was true but the old guy told the story very matter-of-factly and never varied it.

 

I always remember the trivia question at a car show in the early 80s...Which manufacture has produced the most transportation vehicles to that date....Studebaker when you added all the wagons that they made in the 1800s Probably no longer true today.

Could you imagine a 63 Chevy using the same frame, engine and basic body shell as a 53 Bel Air???

 

I dont see the conection with my spelling
versus ugly Studebakers.I dont think the
spelling change the fact that the majority
of buyers thought they were ugly

And that you think they rock
Did not help the company thats a fact

 

Studebaker did not 'go under'...

Their board of directors found better ways to make money than selling cars.
They diversified their holdings by acquiring other companies.
They strangled the Studebaker automotive division by limiting funding for future development.
The capitol needed to modernize, or build new plants, and production equipment was not forthcoming.
Labor cost due to union contracts, and labor strikes soured the board of directors on an expansion.
They kept the automotive cookie cutter machine going because they had dealer contracts and obligations.
Their dealer elimination program was a higher priority than their auto production program.
There are several huge organizations around today that were once owned by Studebaker.... Paxton, STP, Worthington Leasing, Onan, Gravely ....
Yes, Studebaker stopped building cars and trucks.
But it was their decision to shut it down.

 

I guess you can call it whatever you want, and we can debate how and why things happened as they did, but..... when your products aren't selling, you are losing money, there is no apparent way out of the predicament, and you close the doors because the competition ate your lunch, one could fairly call that "going under". Before Studebaker management turned its back on the car business, the marketplace turned it's back on Studebaker's cars.

 

A friend of mine owned one of those Packard Hawks in the late 1970's.... you're right, it looked a lot like a thinly-disguised Studebaker. Interesting car though. As I recall, the front end and grille surround was fiberglass? Here's a photo:

 

I figured that the extra g was for emphasis! As a children, we thought Studebakers were ugly. We bought model cars and Corvettes, Jaguars, MGs and Thunderbirds were much more popular than Avantis. One of my friends was very disappointed when he got an Avanti model as a birthday present.

Mass production by the big three to force the competition out likely helped cut production costs and allowed them to build vehicles cheaper. GM was a major player in the booming home appliance business also.

 

The big three delayed their labor costs with pensions and health insurance which came back to bite them in the ass.

Funny that you mention those companies because they seem to be fading away like Studebaker did. You hardly see an STP add today and I don't see it on the shelves much. They sell other products but don't use the STP name as much. Onan sold out to Cummins and are forcing their dealers out. It's difficult to get parts for Onan engines. I recently modified a mower deck for guy because he couldn't get parts for his Gravely tractor.

 

http://www.theavanti.com/jb007.html

 

That's pretty funny...
Now, 55 years later, you are bringing up the current status of companies that Studebaker once owned, and making current judgments on them as if they were still a Studebaker company.
STP was just sold this year for the third or fourth time since Studebaker sold them. It sold for something like 855 million dollars (Armor-All included in that deal)
Onan was purchased by Cummins, so how does Cummins rate a comparison to Studebaker?
Gravely is still around, but some of the stuff that is old is not stocked by them any more. Try and buy a 1983 Impala fender direct from Chevrolet.
Worthington leasing company was sold a few years ago for several billion dollars...at a nice profit for the investors.
You have to look at the bigger picture and not just local issues and folklore....

 

Preach it, Jeff!

 

Own a Paxton supercharger? Studebaker.

Own a Gravely Tractor? Studebaker.

Own an Onan generator? Studebaker.

Got a Kohler sink, toilet, faucet or engine? Studebaker.

Own a Clark forklift? Studebaker.

Own a White or White-Westinghouse sewing machine? Studebaker.

Own any Baker furniture in your home? Studebaker.

I may be over-simplifying things a bit because the post 1964 history of Studebaker and all of it's divisions is quite confusing but I like to say that Studebaker didn't really go out of business-they just stopped making cars.

BTW since we're on this subject I highly recommend ' Bob Bourke Designs for Studebaker' by John Bridges...excellent read if you're at all interested in the history of design.

https://studebakermuseum.org/store/books-and-videos/studebaker-designers/bob-bourke-designs-for-studebaker_00132/

 

I did not know that, Thank you for the Clark info as that sheds new light.
-I had followed Studebaker up to the point where Studebaker changed their name
to Studebaker-Worthington (~late 67 or early 68) but that's about when all my leads went funky.








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My understanding is that their CFO just misjudged the timing of the bailout.

 

What Jeff listed is all true. It's also true that Studebaker's automotive division actually made small profits in 1965 and 1966. But, one also needs to look at the future and what was around the corner from 1963 (the closing of the assembly plant in South Bend) and the end of production at Hamilton in 1966.

Hamilton wasn't a large production assembly plant. You weren't going to build 200,000 cars there.

The Studebaker V8 was not an emissions friendly engine (not that most engines were). It was also an antique from 1951. That 340 engine would have definitely been interesting. Until cars with 400 cubic inch engines were going into smaller cars. Studebaker needed a redesigned engine and didn't have the money to build it.

As others have mentioned, the cars of 1966 could trace their frame and suspension design to the sedans of 1953. While innovative with disc brakes starting in 1963, it still didn't provide the handling and ride of the competition. Studebaker would have needed to redesign the entire car. Again, they didn't have the money.

Safety was something the Congress started mandating. Dual master cylinders and colapsable steering columns were just things that were going to be required by 1970 along with ignition lock steering columns. Again, requiring a complete rethinking of the cars they were selling.

And last, where do you build a new car? The South Bend plant was more than 100 years old by the time it was closed. How much to build a new modern assembly plant?

Studebaker wasn't making money to build a new plant to build a new car with new modern engines. They would not have met new emission standards or safety requirements with the '66 models for any length of time.

By the way, they reason behind closing the plant in Hamilton in March of 1966 was because the tooling for stamping the sedan deck lids was damaged and Studebaker didn't want to spend money to retool. It gave corporate the reason they were looking for to shut everything down.

As for past history, the car the doomed Studebaker was that pretty '53 hardtop/coupe. They could build them in volume and the sedans/wagon were completely different cars that had no common parts. Ad in a sales war between Chrysler, Ford and GM and it spelled doom for the independents. This sales war almost made Chrysler go under back then.

Packard bought Studebaker. Chrysler bought Briggs, who was making Packard's bodies. Packard wasn't aware how bad the red ink in South Bend was. This ate the money for tooling up the new '57 Packard. This had nothing to do with measuring the assembly line. This had all to do with no money.

The Avanti ate the money that could have been used to bring out the '64 restyle in '63. The '63 sales were horrible, which probably put the nails in the coffin before the '64's could really make a difference.

Styling is in the eye of the beholder. I've always liked the '64-'66 cars. My personal feeling is that compared to the Falcons, Comets, Novas, Valiants and Darts at the time, they were good looking cars. Compared to these other small cars, even the interiors were a little nicer. They also came with something the others didn't offer...horsepower. The supercharged R2 engines could put a hurt on an unsuspecting opponent. They were also available with honest to goodness 4-speeds. It just didn't help that they were more expensive and had the reputation as an old mans car.

 

I read that demand for the coupe was much higher than anticipated, that Studebaker couldn't build enough to meet that demand, and that if they could have built more things might have turned out differently.

Even if that is true, based on how Studebaker was doing in general I suspect that, at most, more profit from the coupe might have changed when they closed, but not whether they closed.

 

I am not sure if it was mentioned earlier; I may have missed it, but if it wasn't for Studebaker, Mercedes would never have had as strong a hold on the American market. Studebaker made an agreement with Mercedes that it would sell Mercedes at all their dealerships... Many older established Mercedes dealerships started out as Studebaker dealerships.

 

People wanted chevys'.

 

I realise, this is now an old thread bumped, but an interesting read anyway.
Its interesting to note the comparison with your compact styled cars, the same can be said for here in Australia aswell.
In 1966 our big three here were Holden who's parent company is GM, Ford Falcon and Valiant by Chrysler at the time the only car available with a V8 out of the three majors was a Valiant.
If you wanted a V8 you also had the choice of what we called compact Fairlanes, Galaxie, Chevrolet, Pontiac or Ramblers, the other choice was the Studebaker Cruiser, most of these cars were dearer than our local offerings with perhaps the compact Fairlane, Rambler and Studebaker being a little more affordable than their larger counterparts.
I remember in 1966 my Grandfather had a big win on the horses, and with his winnings he bought a block of land and a new car, he wanted something a little flashier than a Holden or Falcon but didn't want to spend too much so he looked at Valiant and Studebaker, with the Stude getting the nod.
My memories of that car was it was quiet to ride in, rode very smooth and was quite powerful, for a car off the showroom floor and by Aussie standards it went like a dog shot in the arse.
Me as a six year old at the time that car was a thing of beauty way ahead of our Aussie offerings, but as I got older I realised the fit and finish was not that good and was also very bad for rust, more so than other makes at the time, I also remember the decals on the valve covers reading Studebaker thunderbolt, and as I learnt a little more I eventually learnt that the engine was infact a 283 Chev, and the cruisomatic was infact an FMX ford as used in Customlines.
Apparently when my Grandfather bought his Studebaker they were already winding down or had ceased production, which is the reason the last of them had Chevy engines and Ford transmissions.
My Grandfather owned that car for twenty years, and for someone who wasn't big on maintenance it was very reliable, I too have some fond memories of that car and still have a soft spot for them.
The old Stude is now long gone but that old 283 is alive and well living in my mates Model A coupe and looking good with an Offenhauser inlet and triple 97s and corvette covers sitting on top.

 

Your grandfather must have bought one of the Studebakers built in Hamilton Ontario after the main Studebaker plant in South Bend Indiana closed.

Hamilton always got their engines from South Bend but of course, with the factory and foundries closed no more engines. Hamilton did not have foundry or engine assembly facilities.

They considered different engines but the best fit was the Chevrolet 6 and V8 engines made in Canada by McKinnon Industries. McKinnon Industries was an old Canadian hardware company that made engines for the Chevrolet company.