Could Studebaker have survived?

[rons50]

Has anyone else read the article in the January issue of Hemmings Classic Cars (Issue #28), by the subject title?

Made me wonder if they were that close, why didn't the Board of Directors go for it?

Ron

[Chris Pile]

Dr. Loren Pennington (Emporia State) published an article and also gives a speech about why Studebaker failed. I didn't agree with all his points or conclusions, but he was right about one thing - Studebaker could no longer compete once they held less than 12 percent of the market.
That was the "tipping point" when Studebaker lost the ability to control costs for their raw materials, and lost influence in the market prices.
In today's market, the number of makers is much higher - perhaps Studebaker could have survived as a niche maker.

Chris Pile
The Studebaker Special
Midway Chapter SDC

[Chris Pile]

Dr. Loren Pennington (Emporia State) published an article and also gives a speech about why Studebaker failed. I didn't agree with all his points or conclusions, but he was right about one thing - Studebaker could no longer compete once they held less than 12 percent of the market.
That was the "tipping point" when Studebaker lost the ability to control costs for their raw materials, and lost influence in the market prices.
In today's market, the number of makers is much higher - perhaps Studebaker could have survived as a niche maker.

Chris Pile
The Studebaker Special
Midway Chapter SDC

[studeclunker]

Not with their production costs the way they were.


Lotsa Larks!
K.I.S.S. Keep It Simple Studebaker!
Ron Smith
Where the heck is Lewiston, CA?

[studeclunker]

Not with their production costs the way they were.


Lotsa Larks!
K.I.S.S. Keep It Simple Studebaker!
Ron Smith
Where the heck is Lewiston, CA?

[Studedude1961]

The Studebaker plant overhead was as atrocious as the plants were aged. There was no money available for a desperately-needed total automotive product overhaul (past due in 1958!). The dealership network was weak and the Big 3 were coming on like gangbusters with new niche products in areas where Studebaker could not hope to compete. Even AMC, with resources much greater than Studebaker in the mid-1960s, nearly killed itself trying to match GM, Ford and Chrysler model-for-model. Studebaker didn't have a chance.

Studedude1961
--1963 Cruiser

[Studedude1961]

The Studebaker plant overhead was as atrocious as the plants were aged. There was no money available for a desperately-needed total automotive product overhaul (past due in 1958!). The dealership network was weak and the Big 3 were coming on like gangbusters with new niche products in areas where Studebaker could not hope to compete. Even AMC, with resources much greater than Studebaker in the mid-1960s, nearly killed itself trying to match GM, Ford and Chrysler model-for-model. Studebaker didn't have a chance.

Studedude1961
--1963 Cruiser

[JBOYLE]

With today's fragmented market, it's easy to think Studebaker could have survived by filling a niche. After all, there are plenty of specialty segment firms out there: Mini, Hummer, Land Rover, Subaru, etc. And that's not counting the really niche players: Avanti & their Studebaker branded SUVs, Lotus, Morgan (with their 2 or 3 U.S. dealers) and the high dollar exotics (Ferrari, Lamborghini, Maserati).

But most of those are owned by larger firms...GM has Saab & Hummer; Ford has Jag, Land Rover & Volvo; BMW owns Mini and Rolls Royce.

But niche players survive on product. And the one thing Studebaker didn't have is an up to date product. At some point they'd have to abandon the 1953 frame. Maybe the board could have sold off something to fund the (tens? hundreds? of) Millions necessary to fund development of a new generation of cars to fit into a niche (I'm guessing compacts...but I'd like to hear what your opinions are).

Even then they would have faced high overhead costs due to labor and an out of date factory....not to mention building or rebuilding a dealer network and an expensive media campaign to let the public know Studebaker's back...or it's not your father's Studebaker or whatever their tag line would be.

Faced with these options...and the fact that imports were on the rise...the Board did what it is supposed to do: protect the financial interests of the corporate shareholders...so they deep-sixed car production. We may not like it or agree with it, but there is a financial case to be made for their action.

63 Avanti R1 2788
1914 Stutz Bearcat
(George Barris replica)

Washington State

[JBOYLE]

With today's fragmented market, it's easy to think Studebaker could have survived by filling a niche. After all, there are plenty of specialty segment firms out there: Mini, Hummer, Land Rover, Subaru, etc. And that's not counting the really niche players: Avanti & their Studebaker branded SUVs, Lotus, Morgan (with their 2 or 3 U.S. dealers) and the high dollar exotics (Ferrari, Lamborghini, Maserati).

But most of those are owned by larger firms...GM has Saab & Hummer; Ford has Jag, Land Rover & Volvo; BMW owns Mini and Rolls Royce.

But niche players survive on product. And the one thing Studebaker didn't have is an up to date product. At some point they'd have to abandon the 1953 frame. Maybe the board could have sold off something to fund the (tens? hundreds? of) Millions necessary to fund development of a new generation of cars to fit into a niche (I'm guessing compacts...but I'd like to hear what your opinions are).

Even then they would have faced high overhead costs due to labor and an out of date factory....not to mention building or rebuilding a dealer network and an expensive media campaign to let the public know Studebaker's back...or it's not your father's Studebaker or whatever their tag line would be.

Faced with these options...and the fact that imports were on the rise...the Board did what it is supposed to do: protect the financial interests of the corporate shareholders...so they deep-sixed car production. We may not like it or agree with it, but there is a financial case to be made for their action.

63 Avanti R1 2788
1914 Stutz Bearcat
(George Barris replica)

Washington State

[Studedude1961]

It is doubtful the Studebaker Board would have considered selling off profitable divisions to prop up their biggest unprofitable one...the automotive division. Studebaker's truck plant was modern and could have been used to built niche vehicles like small subcompacts but the old bugaboo of maintaining styling, engineering, and sales divisions would have remained. Once Studebaker hit the early 1970s its "re-done" 1960s products would have again been aged and this time the corporation would have also had to face new front and side impact regulations, new emissions regs and the need to redesign for a new stable of engines. Studebaker would have at the least had to match what AMC was offering...a bread and butter family car, a sports-type car that could have doubled as a personal luxury car and some sort of truck. That's a lot of styling dollars. From a purely unemotional, business standpoint, the Studebaker Board finally made a sound business decision in the early winter of 1963. We don't like it, but that's the way it had to be to save the overall corporation.

Studedude1961
--1963 Cruiser

[Studedude1961]

It is doubtful the Studebaker Board would have considered selling off profitable divisions to prop up their biggest unprofitable one...the automotive division. Studebaker's truck plant was modern and could have been used to built niche vehicles like small subcompacts but the old bugaboo of maintaining styling, engineering, and sales divisions would have remained. Once Studebaker hit the early 1970s its "re-done" 1960s products would have again been aged and this time the corporation would have also had to face new front and side impact regulations, new emissions regs and the need to redesign for a new stable of engines. Studebaker would have at the least had to match what AMC was offering...a bread and butter family car, a sports-type car that could have doubled as a personal luxury car and some sort of truck. That's a lot of styling dollars. From a purely unemotional, business standpoint, the Studebaker Board finally made a sound business decision in the early winter of 1963. We don't like it, but that's the way it had to be to save the overall corporation.

Studedude1961
--1963 Cruiser

[Roscomacaw]

One thing I've never seen considered is the timing of the Lark's intro. Given that MANY Big3 dealers took on Studebaker in '59 because of the Lark phenomenon - if Stude hadn't managed the Lark until 1960, would ANY further year-model Studes ever have come to be??? With the Big3 all trotting out their OWN compacts in 1960, could Stude have persisted thru that year???

Miscreant adrift in
the BerStuda Triangle


1957 Transtar 1/2ton
1960 Larkvertible V8
1958 Provincial wagon
1953 Commander coupe

[Roscomacaw]

One thing I've never seen considered is the timing of the Lark's intro. Given that MANY Big3 dealers took on Studebaker in '59 because of the Lark phenomenon - if Stude hadn't managed the Lark until 1960, would ANY further year-model Studes ever have come to be??? With the Big3 all trotting out their OWN compacts in 1960, could Stude have persisted thru that year???

Miscreant adrift in
the BerStuda Triangle


1957 Transtar 1/2ton
1960 Larkvertible V8
1958 Provincial wagon
1953 Commander coupe

[studeclunker]

I suppose it's phenomenal that the company held on for seven more years, with the Lark, as it is... Really, they were on the verge of shutting down in '58.


Lotsa Larks!
K.I.S.S. Keep It Simple Studebaker!
Ron Smith
Where the heck is Lewiston, CA?

[studeclunker]

I suppose it's phenomenal that the company held on for seven more years, with the Lark, as it is... Really, they were on the verge of shutting down in '58.


Lotsa Larks!
K.I.S.S. Keep It Simple Studebaker!
Ron Smith
Where the heck is Lewiston, CA?