/////////////I'm a Studebaker and Packard enthusiast. In my own little automotive world the major US independents survived. Studebaker-Packard is still building Studebakers, Packards, and Clippers as well as Studebaker trucks and SUV's. American Motors is still building Hudson, Nash, and Rambler. GM is still building Oldsmobile. Chrysler, not affiliated with Mercedes Benz, is still building both Plymouth and DeSoto. What would it have taken to make that happen? What would the past 50 years of automotive history been like and what would it be like today and in the years ahead? I have wondered. In 1953 and 54 Ford wanted to be number one in sales and just dumped cars on dealers forcing dealers to make deals, cut prices, and sell cars. Chevrolet retaliated by doing the same. This Ford/Chevy sales war hurt the independents. But what if Studebaker had said, "We can play this game too." They clearly had the production capacity at South Bend, Indiana as well as at Los Angeles, California and Hamilton, Ontario Canada. What if Studebaker had dumped cars on dealers forcing them to make deals, cut prices, and sell cars the way Ford and Chevy did and what if Studebaker had sold some 300,000 to 400,000 cars each of those two years? Where would that have put them and the newly formed Studebaker-Packard Corporation going into 1955? What would that have put them long term say 1956, 1957 and beyond? If you could somehow go back to the middle of the 1950's say 54, 55, 56, have an IN with the company and do some things that would cause Studebaker-Packard to have survived and still be with us today, what would it be? What could have been done differently that would have allowed that to happen?/////////////// =========================== This kind of question is always very thought provoking to those of us who appreciate something a bit less ordinary than the mass "everybody's got one" product. Actually, I think the reply that says there's nothing they could have done is closest to the brutal truth. On the other hand, the one that says the demise started with the sales decline of 1963 is way, way off the mark. Studebaker was barely struggling for a few shallow breaths by that time. Packard was already dead. In my opinion, the real opportunities lost and/or mistakes that ultimately cost S-P its corporate life (aside from the challenge of competing with the Big 3) were these: 1. As the Great Depression took hold, Studebaker was a strong, financially stable, highly respected company with an enviable position in the medium priced car market. Unfortunately, company president Albert Erskine had more interest in maintaining the value of the company's stock on Wall Street than he had in anything else. Studebaker stock had long been known for paying generous dividends (from operating profits). Erskine had most of his personal fortune invested in Studebaker stock. He convinced the Board of Directors to continue paying out large dividends, even though they were now losing big money in the depression, right up until the company went into bankruptcy (and Erskine committed suicide) in 1933. Essentially, they gave away the store. 2. Packard saved itself from the certain death it was facing in the 1930s by bringing out a lower (medium) priced car line, the famous Packard 120, and later the 6-cylinder Packard 110. This greatly diluted the company's prestige among its traditional big-money customers. After WWII, Packard foolishly continued to produce large numbers of lower-priced cars, even though they could have sold anything they turned out in car-starved postwar America. They could have emphasized the high-priced, high-prestige, high-profit models, but they didn't. This continued to erode their prestige image, and Cadillac captured the imaginations of the upper end car buyers. 3. Studebaker-Packard refused to join American Motors in a big merger that would have created more of a true Big 4 auto industry in America. This master plan had been conceived during and shortly after WWII by Nash president George Mason. Unfortunatley, right after the war, all the companies were selling all the cars they could build, and only Mason could forsee the future of tough competition returning. By the time the other independents were hurting, it was almost too late. Then too, S-P had a new president in James Nance, who had been a former competitor of George Mason's in the appliance business. Nance was not willing to play second fiddle to anyone, so the merger never went through. S-P then further foiled any cooperation. S-P sold Packard V-8 engines and Ultramatic transmissions to AM for use in senior Nash Ambassador and Hudson Hornet models in 1956, but refused to buy any AM products in return. Hudson's old body plants were just sitting idle, with lots of capacity, but Packard went out and bought Budd body company to have its own body factory instead. I think these are 3 of the most pivotal events in "what could have been". I enjoy hearing other thoughts and opinions. Let's continue to hear some more. Take care, Jerry K ------------ The survival of Studebaker would take you back to 1946-47. Studebaker spent $13 million to tool the 1947 Studebaker in 1946, something many writers say Studebaker could have held off until 1949. Instead, they claim, Studebaker should have spent that money on new plants, etc. However, the Champion body was dated and the Commander used a totally different body. With the 1947 models, both series used the same body saving Studebaker money and it was tooled on pre-inflation 1945-46 dollars. Plus it gave Studebaker word of mouth advertising that the old body just would not have supplied. With the 1947 models the public put Studebaker at the head of the class in styling and up-to-date product. As well, that $13 million body resulted in profits of $122 million from 1946 through 1952. If Studebaker could have built new, modern facilities with $13 million, what stopped them with $122 million? And there begins Studebaker's problems - antiquated production facitlities, something Studebaker should have dealt wth. Next, Studebaker kept giving their workers more money and benefits during the last 1940's to prevent a strike and keep the plants going. Nice in the short term, but the rest of the industry did take strikes and by 1953 Studebaker's labour costs were 13% or more than the competition. A drill press operator was getting $2.64 an hour when the rest of the industry was around $2.00. This meant Studebaker was paying 13% more to build a car than Chevrolet or Plymouth. And that placed their cars in the price class above the markets they were designed for. Strike two. Studebaker had to tool two separate bodies for their 1953 line, one the sedans and one for the coupe/hardtop. Plus their engineers designed the chassis frame to flex and made the body more rigid to compensate. Good in theory, but when the first 1953 cars came down the line, the body would attach to the frame but not the front clip. The Champion sedans with their lighter six and 116.5" wheelbase could be shimmed, but the longer 120.5" wheelbase V8 models were next to impossible to get things to line up. Thus the delay in getting the coupes/hardtops to market Turned out the lighter frame flexed when the engine and body were installed, preventing the front clip from lining up. The 1953 models were noted for being rattly, squeaky cars, giving the impression of shoddy assembly, which was not the case. It was poor engineering. The 1954 models used thicker steel in the chassis frame. Strike three. And to add icing to the cake, the body was engineered to rust. By the time Ford and Chevrolet were slugging it out, the Studebaker Champion hardtop cost $2,241 compared to $2,055 for a Ford Victoria 6 and $2,131 for a V8. And Studebaker made but $2 million dollars in 1953 on $594 million in sales. 1954 was worse with a loss of $24 million on $222 million in sales. Given those figures, there is no way Studebaker could have gone against Ford and Chevrolet. Now, if Studebaker had spent some money on new plants, had kept their labour costs in line, kept the 1953 body enginering 'normal' and tooled one body,. Studebaker could have been in better shape to fight the battle. But you would have to back to 1946 and start over. And the same is for Packard. James Nance should have been hired in 1945. Although Packard had money, its product styling was dated and the lower priced lines outsold the luxury Packards. In 1951, for example the lower priced 200 series had 76,002 units built compared to the lusury 300/400 with 24,310 builds. And that 24,310 in luxury Packard models paled in comparison to Cadillac's 110,340 units. The other competitors were Lincoln with 32,574 and Chrysler Imperial at 17,512. In the 1930's Packard was number one and in 1951 number three. And a very poor number three. Nance forced Packard to get a V8 engine in production as well as the torsion bar suspension. He wanted them for 1954, but even 1955 turned out to be too early. He was also the one behind the move to separate the Clipper from the Packard. Had he become Packard president in 1945 instead of 1951, his story at Packard may have had a different ending. Sadly, a Studebaker dealer was not the gold mine a Ford or Chevrolet outlet was. There is no way Studebaker could have dumped cars on their dealers. They just did not have the cash and Studebaker the market to make that viable. Not even Plymouth was able to do that. And Ford was on a dealer raid. Studebaker had a network of distributors who had dealers selling cars. The dealers dealt with the distributor, not Studebaker. Around 1957 Consolidated Motors, Studebaker-Packard distributor for Manitoba and N.W.Ontario, dropped their contract with S-P and became a Mercury-Meteor-Lincoln dealer. And Studebaker lost all their dealers in Manitoba as their contracts were with Consolidated Motors and not Studebaker. Studebaker sales in Western Canada never recovered. For the independents to have survived, Henry II would have to go back and dump his plans to outproduce Chevrolet. Take all the above into consideration, Studebaker and Packard would have lasted longer. As to whether they would still be here today, though . . . . . Bill Vancouver, BC =============== ///////On your third point Nashtwin8, my understanding was that George Mason would merge Nash and Hudson to form American Motors. James Nance would merge Packard and Studebaker. These were to then be merged into a larger American Motors building Packard, Hudson, Nash, and Studebaker. George Mason passed away in October or November 1954 before the final merger could take place, and my understanding was that it was Mason's successor George Romney who really kept the final merger from taking place. My understanding has always been that Romney was the one who didn't want the final merger to take place. There was a lot of friction between Romney's people and Nance's people and I understood it came mostly from Romney and his people. Another thought I have had. What if they had taken a different path for 1957? Suppose the money spent on the Connor Avenue (former Budd) plant had been spent to upgrade and modernize the East Grand Boulevard plant? Even with the cramped inefficient Connor Avenue plant, what if they had built at least some version of the full line program designed off the Packard Predictor? For the most part equipment was already in place to do that. What if they had done the sheet metal restyling to look like the proposed line off the Predictor? Consolidate truck and certain componant production in South Bend. Consolidate passenger car production in Detroit. Instead of deriving a Packard off the Studebaker, derive a Studebaker off the Clipper. Even some engineering ideas. Bore the Packard V8 out to 440 cubic inches, upgrade and update the twin ultramatic, taper the torsion bars, use torsion level under all three makes. For a six cylinder in the Studebaker Champion, use the Big 6 or Commander 6 which was still being built for use in some trucks, maybe even convert it to overhead valve as they did do later on with the Champion six. I think a plan like this would have made them look far far less like they were about to become an orphan company, more like a company that could make it. It would have allowed them to build an acceptable big Packard and a more competitive Studebaker and Clipper, and they might have done quite well for 57 and 58. I think had they had plans like this really well under way at least to where they could easily be implimented had the money been there, they could have sold such a plan to investors. Also, while they had very little money, they were not totally pennyless. I think the Packard they developed for 57 and 58, developed on a shoestring bduget, would have done fairly well if it had been built and marketed as a Clipper not a Packard. The Studebaker they did develop those two years would have sold much better had the company not looked like it was about to go under. To do that they also needed a big full size luxury Packard as well. I think there were a few things they could have done that would have made a big difference. I think the fatal blow or fatal whatever came with the 1957 and 1958 models. I have always felt it didn't have to go the way it did for Studebaker-Packard, it could have been different, the 57 and 58 models could have been handled differently, and had that happened Studebaker-Packard still be with us today, and by a coattail effect maybe even American Motors would have survived the long haul as well, that we would today have a Big Four and perhaps a Big Five in the American automobile industry, and that the last 50 years of automotive history, and our automotive world today could have bery easily been very different than it is. Had that happened, what effect would that have had on our economy, our culture, and even in politics? Had that happened, what would our world today be like? /////////// ------------ Actually, it was American Motors that would not play ball. Nance and Mason were old acquaintances and it has long been held that Mason was the man to get Nance into Packard. Why else would an old-line firm like Packard hire a non-auto outsider to run its company? Mason got Nash and Hudson together while Nance got Studebaker and Packard together. What put everything in the dust bin was Mason dying and George Romney being head of AMC. When Mason was alive the two companies were working on projects to share bodies, engines, transmissions, and accessories. When Mason died, so did the sharing project. Romney had decided that the Rambler was AMC's salvation and everything else just was not worth it. He put all AMC's engineering and tooling money into the Rambler line and wrote off any idea of merger with S-P. The use of Packard engines by AMC was not meant to be a long term idea after Mason died. It was supposed to last only long enough until AMC got their own V8 engine in production. And that is exactly what happened. Nash was working on a V8 engine when the AMC merger came about in 1954, but it did not get into production until mid-1956. With that, and AMC's new Flash-o-matic transmission (built by Borg-Warner - same unit as Studebaker's Flightomatic), AMC no longer needed S-P. As to Studebaker using AMC faciltities, Studebaker wanted to use the Rambler six. It was larger and more modern than the Champion unit, but Romney said no - they would need every one for their Rambler cars (which turned out to be true). AMC did bid on Studebaker parts, but their costs were way out of line. Stampings for the front end cowl top and windshield came in at $7.56 as quoted by Hudson. The bid Studebaker accepted was $4.59. Front fender splashers were quoted by Hudson at $2.07 while the winning bid was $1.35. Radiator lower splashers were $1.66 compared to the accepted bid of $1.12 and the battery carriers were quoted by Hudson at $0.86 while Studebaker accepted a bid of $0.15. And Hudson quoted $33.48 for engine blocks which compared to $30.70 that Studebaker paid a local foundry. Now, whose bids would you have accepted? As for Packard bodies, Budd had no link to Packard. Budd was involved with Nash and then AMC with its unit body engineering plus was a major supplier for Studebaker. But Packard bodies were built by Briggs starting with the Clipper in 1941. Briggs's other major customer was Chrysler. In 1951 Walter Briggs died, and the family had to sell something in order to come up with the taxes, duties, etc. now due. Chrysler purchased the American Briggs body company (Ford bought the British subsidiary) and served Packard notice they would not be building bodies for Packard after two years. Packard purchased the former Briggs plant on Conner Avenue and began using it with the 1955 models. That was the one major error than Nance made during his tenure at Packard. Packard never purchased Budd. The company is still in business. Budd was the company that developed Uniside for the 1963 Rambler and was a major supplier of stampings to Studebaker right to the end in 1966. They also supplied Ford and Chrysler. --------- ////////Please excuse me for saying Packard bought the Budd plant. I knew it was the Briggs plant and that it was on Conner Avenue. The Conner Avenue plant was cramped and inefficient, and Packard would have done better to spend the money that they spent on the Conner Avenue plant in other ways instead. I think Packard would have done well to spend it for a bigger more efficient body and assembly plant, possibly to upgrade and modernize the East Grand Boulevard plant for that purpose. James J. Nance made very few mistakes as president and ceo of Packard and then Studebaker-Packard, but I think the Conner Avenue plant was a mistake.///////// ---------- You are correct about the "arrangement" between Mason and Nance. It all came apart with Mason's death. Romney had no intension of merging with Studebaker-Packard. His aim was to survive with the Rambler and kill Nash and Hudson. There were plans afoot to market a 1958 Hudson and Nash, but they were to be Ramblers with longer hoods. The product that did appear was the 1958 Rambler Ambassador with 1956-7 Hudson styling cues. Prior to the collapse of S-P in late 1956, the plan was to tool one body - a small version for the Studebaker, a large one for Packard, with the Clipper falling between. Just as Chrysler did in 1957 - one body with three sizes for Plymouth, Dodge, DeSoto and Chrysler. General Motors followed suit in 1959 with one body for Chevrolet, Pontiac, Olds 88 and Buick LeSabre/Invicta,. and an extended variation for the Olds 98, Buick Electra and Cadillac. When the banks refused to come up with the money for such a project, S-P approached Ford with the idea of using the basic 1956-7 Lincoln body shell for the Packard and the new 1957 Ford for the Studebaker. Ford brass killed it when the projected Studebaker and Packard looked too much like the Ford and Lincoln. S-P had spent money on designing these cars, but no money had been spent on tooling. There just was not any cash around for such a major expense. Renovating the Detroit plant would have been a wiser move than using the former Briggs (not Budd) plant on Conner Avenue, on first thought. But S-P management was concerned about the plant's structural integrity - it was not as stable as it was in the 1930's. Perhaps S-P would have been better off buying the old Hudson plant. That plant had enough capacity to produce over 200,000 cars a year. Or using the Conner Avenue facility to build the bodies and an overhauled Grand Boulevard plant for final assembly. The production 1957 Packard came about as S-P could not justify the Detroit operation given the low sales and they just did not have the cash to do anything other than revamp the Studebaker President. S-P was in a tight bind financially, and they were penniless. Total losses for the 1954-56 period came to $99,683,408 and the company's net worth fell from $138,633,282 to $15,609,932. A further $11,135,108 was lost in 1957 and net worth fell to $4,474,824. Bill Vancouver, BC ----- //////////This is very very interesting and is giving me a lot of ideas, it is answering some of my questions. I like the idea of Packard or of Studebaker-Packard buying the old Hudson plant. I also like the idea of using Conner Avenue to build bodies and revamping East Grand Boulevard for final assembly. Not sure which idea would have been best. But all this still isn't quite answering my initial question. What if somehow you could go back to the middle of the 1950's, say to 1954, or 1955, or 1956, have some kind of IN with Studebaker- Packard, and do something that would cause Studebaker-Packard to survive and still be with us today building all three makes, Studebaker, Packard, and Clipper, what would that something be? If you could go back and change something what would you change, what would you do? My own feeling still is that it has to do with the 1957 and 1958 models. You would need to build a big full size "true" Packard. You would also need to maybe build a different or somewhat different Studebaker and Clipper than they built for 57 and 58. Most important of all, you would need to make the company look like a strong company that would stay in business. You have to convince customers they aren't getting stuck with an "orphan". I think that image hurt them more than anything else. And they weren't as much an orphan as they looked then. After all, they continued building cars for some 10 years after the middle of the 1950's. So, what would you have done to change that, to allow for a big full size Packard and what would it have been like? What would you have done with the Studebaker and Clipper? Most of all, how would you have made Studebaker look to the car buying public like it was a strong healthy company that would continue to be there and draw in the customers they needed and get them to buy? That's what I've been asking here. Here's a "what if". If Studebaker had survived, the result by now would likely be just that many more indistinguishable jelly bean shaped cars and SUV's. Or as somebody on the Avanti group once said, cars that look like a bunch of Norelco razors going down the road. We just don't see many current designs that are styled as well, or as poorly, as those of the fifties. Chuck Kinze ------ What would somebody "do"? You mean, like magically create millions of dollars that just weren't there? The people who were there tried pretty darn hard, and they couldn't make it work. They didn't have enough resources to do what they knew needed to be done. Not enough money for new bodies. Not enough money for new, efficient factories. Not enough sales strength to improve their relatively weak dealer force. Let's face it, for whatever reasons (and there are lots of ideas about them), a Big 4 never came into being. By 1957, Studebaker was selling a car that was a heavily facelifted 1953 body. Their cars were skinny looking in the era of "longer, lower, wider", due to the fact that they were built in an antiquated wagon factory building, with the main assembly line (if I recall what I once read correctly) being strung out over 3 stories. This was yet another reason for Studebaker's overly high production costs (factory inefficiency). Perhaps Packard's big mistake was in ever merging with Studebaker at all. At the time of the merger, Packard still had lots of cash in the bank, while Studebaker was turning into the money-loser of the decade. It doesn't take a rocket scientist to realize that Studebaker would have ended much sooner than it did had not Packard's bank account come into its picture. It's true that George Mason's death did reduce the chances of a merger of S-P and AM. But it's also true that Nance and Mason had been rivals in the appliance business, and neither wanted to appear to be working for the other. Mason's original plan would have been much more viable had the independents merged when they were all strong in the late 1940s as he envisioned, or even by 1951 or 1952. After the Ford-Chevy market glut of 1954, none of the independents was as strong as they had been before. It's likely AM did have plans for a V-8 engine in the works even before the merger with Hudson, but those plans were definitely accelerated when S-P refused to do reciprocal business with AM. And just for the record, AM continued to use nothing but GM automatic transmissions (except for the Ultramatics on Packard V-8s) until they switched to B-W in their '58 models.) And Packard's purchase of the Briggs (not Budd as I erroneously stated earlier) body plant was a clear signal that they had no intention of doing any meaningful reciprocal business. But think of the possibilities if they had: shared bodies could have become a reality even if the companies weren't merged. The savings would have benefited both companies in a serious way. I suppose the biggest hurdle there was the fact that AM cars were unibody, and S-P cars were body-on-frame. Still, in many engineering ways the AM cars were fundamentally more modern than the S-P products (especially Studebaker), and what might the pooling of their small tooling budgets have brought about? S-P cars were coming to be viewed as out of date, and "Johnny come lately", and deservedly so. Who was last to market with a station wagon? Who was last to market with a no-post hardtop? Who was last to market with air conditioning? Who was last to market with a wraparound windshield? Who was last to market with a 4-door station wagon? Who never made it to market with a 4-door hardtop? Someone remarked that Nance made very few mistakes. Well, how about if you consider his quickly spending all the company's money trying to develop/position the product better, but without coming up with a winning result? Some might call parts of that a mistake of some kind. By 1954 or '55 or '56 it was already too late for S-P. As we all know, they struggled on through early 1966, with a couple of small bright spots thanks to the Lark, but that was the end, and it was pretty much a downhill ride all the way from 1952 to the end. American Motors, on the other hand, had some really great success, and some more ups & downs until they finally sold out to Chrysler in 1987. George Romney was right when he banked everything on the Rambler. AM was another company that didn't have enough money to update its entire product line. What they did have was the foresight to move into a part of the market where they had little or no direct competition. Even for them, from the mid-1960s the general trend was slowly but steadily downward. If I could change two things, I still say they would be these: 1. Prevent Studebaker from giving away its net worth as stock dividends in the Great Depression. The company never truly recovered its full vigor and health after that time. 2. Concentrate Packard on its luxury models in the post WWII seller's market to re-establish their luxury image. Would these have been enough to save the company? Sadly, I doubt it, although I love to imagine what "might have been". I really like some of the cars produced during the "declining years" of the independent makes; in some cases I like them BECAUSE they were a little behind the times. In other cases I like them because they were very individual, and not just like all the rest. I have to say, I do wish they had survived, but it's possible I wouldn't have liked some of the more modern products they might have turned out as well as I like the cars they did turn out. Who knows? Jerry K ------- Chuck, You raise a depressing, but interesting point. And chances are you're right. But for my money, I'd still smile bigger if I were following those jellybeans and SUVs and reading "Studebaker" or Hudson" or "Rambler" on their tail ends, and not "BMW" or "Nissan" or "Mistubishi". The recent demise of Plymouth and Oldsmobile cause me to marvel; that the American nameplates are still dwindling, even as more and more imported nameplates become commonplace on our highways. What's wrong with this picture? Take care, Jerry K ----- //////////// Chuck, I love that description you said came from someone in the Avanti Group describing today's cars and SUV's as looking like a bunch of Norelco razors going down the road. Actually I think today's cars would look much better if they did look more like Norelco razors. Thanks to everyone who offered suggestions and ideas on my question here. They have been very helpful and interesting. Hope we can keep this going a while. I still feel that if Studebaker-Packard Corporation was to have been saved intact that it would have had to involve the 1957 models. That's still my inner gut feeling. Yes, they were in a deep quagmire, but one I feel they could still have pulled out of at that point. I feel the 1957 models were the pivotal ones here. They would have needed to go with at least some version of the full line program developed off the Predictor. That means the fatal decisions and such were made late in the spring or in the summer of 1956. So that's where you would need to go. It would probably be best to go back to the late summer or early fall of 1954 when Studebaker and Packard were merging and follow it through from there, but certainly you would need to go back to the late spring or early summer of 1956 and change some decisions there, and maybe take a bunch of money along with you. So that's what I'm hoping to somehow do, go back to some point like that in the mid-1950's say early summer 1956, and change some decisions at Studebaker-Packard that might have made a major difference, then return to the present. And yes, I am working on it.////// ------- /////////What if Studebaker-Packard Corporation had survived and was still with us today as a strong thriving company building Studebakers, Packards, and Clippers. What would they be building today? What would a 2005 Studebaker, a 2005 Packard, a 2005 Clipper be like? What if the same thing had happened to American Motors Corporation? What would their cars and trucks be like today? How different would our world be today if that had happened? How would it have effected our economy, our culture, even our politics if that had happened and instead of a Big Three, we had had a Big Four or a Big Five in the American automobile industry? Back in the late 1980's and early 1990's I wrote a series I called "Studebaker-Packard, The Story That Might Have Been." It starts out in 1954 when Studebaker and Packard merged. For 1955 and 1956 I went with the vehicles they did build those years only having them build in much greater numbers than the did build those two years. For 1957 and 1958 I went with the proposed full line off the Predictor, and from there I took it down over the years at what I hoped was a normal rate of development to what was then the present, trying to make it read like books like "Studebaker The Postwar Years." Another gentleman illustrated it and one chapter even appeared in Studebaker Drivers Club's magazine Turning Wheels. It was way too long and involved to download it to this site, but I really enjoyed doing it. So, what would they be building today if they were still with us, and how different would our world be today, what would it be like if what I proposed here had really happened. I will be interested in and enjoy reading anyone's suggestions and ideas on this./////// --- Start at 1946 - Studebaker has just begun production on the totally new 1947 Studebakers. Profits are rolling in and 1947 hits $9 million followed by $19 million in 1948 and $27 million in 1949. You take some of this profit and reinvest it in the company building new plants, with body and final assembly in the same building. No more trucking bodies from one side of the complex to another (although Studebaker did build an overhead enclosed conveyor to eliminate the trucking). The union threatens to strike unless wages are not increased. You toe the line and suffer the strikes to keep wages in line with the competition. This results in lower production costs and thus higher profits. Of course, car prices can be kept in line with the competition, thus increasing sales. You make the decision to use the same body for the coupe and sedans (the Loewy group had done work toward this) or least share as many inner parts as possible. The decision for the 1957 styles are finalized in 1955. It takes at least a year to go from final design to production, longer if the a totally new body is in the cards. By the way, one plan Studebaker was working on in 1955 was to facelift the Studebaker for 1957 and introduce a new body for the Clipper and Packard. For 1958 the Studebaker would by based on the Clipper/Packard body. It was estimated the 1957 project would cost $34 million with another $16 million for 1958 for a total of $50 million.. Given that Studebaker-Packard lost almost $30 million for 1955 it can be seen why the banks did not bite. A second plan was to reverse the above, a new Studebaker for 1957 followed by Clipper and Packard for 1958. Total cost would be $44.5 million. Another project was to facelift the bodies for 1957 and have a new body for 1958. The 1957 budget was $10.3 million followed by $37 million for 1958. That comes to a total of $47.3 million, Not much better. A fourth scheme was to facelift the Studebaker and base the Clipper and Packard on the Lincoln body for 1957. For 1958 Studebaker would be based on the Ford body. Total cost was to be around $38 million, which was better but Ford rejected it. A straight facelift for the Studebaker came in at $5 million. Which is what was adopted in the end. You are correct in that 1957 was a pivotal year, expecially considering that the Big Three had new styling across the board (except Lincoln which only gained fins). But when you look at the costs above you can appreciate the importance of going back to at least 1946 and starting over to ensure the company had the faciltities, labour and tooling in line to produce the most for the least. It would help to make the balance sheet healthy enough to put a smile on the bankers' faces as they signed the contracts. If one could go back, though, it would be best to go back to 1930 and kill Erskine's dividend plan. That would have prevented Studebaker from going into receivership in 1933 and given the firm a healthier balance sheet through the 1930's. By the way, in 1955 Studebaker's break even point was 250,000 cars. 1955 model year production came to 133,000 units, almost half the needed amount to make a profit. By 1957 after various programs were implemented to cut wages and salaries of virtually all Studebaker employees plus cut the number of employees and other aspects of overhead, the break even point was down to 100,000 units. Which is why the Lark's first year production of 138,000 was able to bring in a profit of $28.5 million. Bill Vancouver, BC --- /////// Oct 2004 Actually, at the end of the 1953 fiscal year, before Studebaker and Packard 'merged' (and you are right, Studebaker-Packard Corporation was the former Packard Motor Car Company) Studebaker had no net debt and was making money. The company was losing ground, though, due to high overhead costs and sliding sales, but that would not come home to roost until 1954 with the end of the Korean War. As with all auto firms in the early 1950's, contracts for defense projects (Korean War) helped bolster the bottom line. Studebaker ended the 1953 fiscal year with $2.6 million in profit and had not lost money since the 1930's. The net worth of the company was $108.5 million. Both figures were a drop from the $14.3 million profit and net worth of $112.8 million in 1952. The total net profits of Studebaker from January 1, 1946 through to December 31, 1953 totalled $108.9 million. Net worth of the company was $40.9 million on January 1, 1946. On the other hand Packard ended its 1953 fiscal year with a profit of $5.4 million, and had arranged a credit line of $20 million with fourteen American banks to finance the tooling of the 1955 models. However, the 1954 fiscal year for Studebaker-Packard ended in a loss of $26.2 million and the company had a net worth of $148.6 million In 1955 the loss increased to $29.7 million and in 1956 to $43.8 million. So by the time the Packard was plant closed and production shifted to South Bend, the company had racked up losses of $99.7 million and saw net worth plunge to $15.6 million. Red ink continued to flow in 1957 ($11.1 million) and 1958 ($13.4 million). Total losses for the first five years of S-P totalled $124.2 million. Net worth for S-P hit bottom with 1957's figure of $4.5 million. 1959 finally brought a profit of $28.4 million. But that was the last of the big profits for the company before closing South Bend. Bill Vancouver, BC