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56H-Y6
10-01-2014, 01:39 PM
Hi

Recently I've read the book "Champion of the Lark" by Robert Ebert, examining Harold Churchill's 1956-1961 presidency of Studebaker-Packard. It's an excellent book, a worthwhile read for all SDC members and automotive historians in order to understand the situation in which the cars were conceived and the motivations behind those decisions.

In the financially precarious days of late 1957, product planning for 1959 was well way. Churchill presented three options for consideration at the October 31st board meeting, summarizing:

Option 1: Continue the complete full-size lines with a general restyling. Tooling estimate was $4.2 million, by dropping the Packard, it would be reduced to $3.25 million.

Option 2: Develop a compact car within one of the following programs:

Plan 2A: Build four and two door sedans on 108.5" wb, add a station wagon if possible. Retain both Hawks unchanged. Tooling estimate was $5.843 million. Break-even point estimated at 121,000 units.

Plan 2B: Build four and two door sedans on 108.5" wb, plus a station wagon on 116.5" wb. Retain both Hawks and the Y-Body sedan on 120.5" wb. Tooling estimate was $7.287 million. Break-even point estimated at 115,000 units.

As background to their ultimate decision, the 1957 model year was turning out to be mostly a holding action against completely a new Chrysler Corporation line, new Fords and Mercurys, increasing strength from AMC's Rambler even as Nash and Hudson faded. And GM just kept steamrolling along. The upward trend in Rambler sales paralleled the increases in import volumse along with the bright spot that Scotsman had become. All that augured well for the success of a compact Studebaker.

As the board turned its attention to 1959, optimism for improved 1958 business was still alive, the steep economic downturn just beginning. Few would have expected its depths or disastrous result. In addition to the encouraging Scotsman sales, Hawks were on pace to outsell 1956 and the Packard Clipper was moving in the volumes expected. Although President Classics weren't equaling 1956 volume, that was understandable with the Clipper Town Sedan now sharing the showroom. What mattered was these high-unit-profit Y-Body sedans were selling a combined total greater than the prior year. This last point was an important consideration for 1959.

Assessing each option in light of the above and with hindsight:

Option 1: Continued as constituted, the 1958 model line-up, largely restyled and refreshed but essentially a holdover of all models and body styles. Telling is that even at this stage when Packard sales were meeting forecast, the demise of the make was on the table. This option, had it been chosen, short of a restyling so complete, including the greenhouse, as to represent a totally new car, would have failed miserably in the face of the 1959 opposition. Ford, fielding it's conservatively Thunderbird-styled cars, held the line but an all-new Mercury made no headway and Edsel simply failed. Chrysler retrenched after it's 1957 skyrocket crashed in 1958 abetted by the self-inflicted reputation for poor quality plus recession. DeSoto, squeezed to death by upmarket Dodges and cut-rate Chryslers, competed right where the 1959 Packard would have. But chiefly, the completely new 1959 GM line-up with their long, low, dramatic lines would have only emphasized how outdated any again-restyled 1953 sedans were. There was an exception in that grim picture, see Plan 2B.

Option 2: President Churchill correctly read compacts as the port in the storm, the execution would be key. Of Plan 2A or Plan 2B:

Plan 2A: This would ultimately become the 1959 Lark and Silver Hawk. It's hard to argue with the success it engendered in the short run. Conjecturing, but central to creating a compact car with existing resources was to retain the existing body shell, reduce the wheelbase and overall length, apply new front and rear styling, thus creating new-appearing cars with the least tooling expense. The possibility of a station wagon was tentative though acknowledged as necessary. Interestingly, keeping both Hawks was entertained, though given their decent sales showing at the time, not surprising. While the tooling estimate was the lowest, note the break-even number was higher than Plan 2B. Break-even point was critical to profitability. Ultimately, the casualty of this program was the 1959 Golden Hawk and any luxury-performance pretense.

Plan 2B: By identifying the compact car and sporty coupe segments, Churchill had correctly recognized two growing market niches. The third niche was less obvious and unique to Studebaker: loyal buyers for whom only a full-sized long-wheelbase Studebaker sedan would do. Even as total yearly volumes slipped, the Y-body models continued to account for a solid ten percent of overall sales. In an analysis by Mr. Ebert of the business decisions leading to the South Bend Packards, published in the Automotive History Review Fall 2006, Issue No. 46 for The Society of Automotive Historians, page 7: "The gross profit per 1957 Packard was $382.55 or 146% of the gross profit on Studebaker cars." While that would include Country Sedans as well, 82% were Town Sedans accounting for the majority of the return.

Further supporting the idea for retention of the 1959 Y-body sedan, from the cited text, page 14: "The second option Churchill presented was to drop the larger Studebaker and Packard lines. The company could then concentrate on a new 108.5-inch wheelbase compact car and the Hawk. Byers Burlingame, Comptroller, stated that with the absence of larger, higher profit margin Packards and Studebaker Presidents, the breakeven level for the company would rise to 121,000 units (from 103,000 in 1958)." As these discussions were going forward, 52% of 57H models were President Classic sedans, excluding Hawks. The 1958 results would be 75% of 58H models were President sedans and 59% of 58L models were Packard sedans, again excluding all Hawks. Clearly, there was a basis to present at least a Y-body President, perhaps even a Commander version with 259 V8, appropriately trimmed for its price range. Econo-milers were just plus business without major expense.

Who were the customers for a 1959 President? They were the over 62,000 people who had bought, since 1953 and/or would buy through 1958, any of the various Y-Body Studebaker Presidents and Packard-Clippers, to say nothing of Commander owners moving up. Had only ten percent decided to trade for a new President, that would have been 6000 more high-profit -margin cars sold. It would have been a wise decision to included those on that basis. To delete a Y-body President from the showroom was to invite loyal full-sized Studebaker sedan buyers to depart in search of the passenger room and trunk space plus overall length and prestige fitting for their transportation and self-image needs. While one might think that Studebaker buyers were not interested in the opinions of others, the type of car one was seen driving was just as important to any President purchaser as it would be to any other medium-priced make owner.

As parallel and confirmation, one need only look to the results the Ambassadors produced for AMC. Bridging to the 1956-Rambler-based cars dominating their 1958 lines, the issue existed to offer loyal Nash and Hudson owners a type of car that would be large and upmarket enough to be acceptable. Keeping them in the fold was certainly critical to success. Even as basic Rambler sales exploded, the Ambassador still added another 9% to the total volume. One can assume that they were high-profit-margin cars as well.

For a 1959 President, tight finances would have allowed only a light restyling , though visual tie-ins such as a Lark/Hawk trapezoidal grille, Hawk-style tailights, holdover rear bumper, various side trim/fins from both 1958 President and Packard rearranged for a new look, plus a Packard/President style interior and 289 engine could have completed the package. Although, seriously challenged by competing Big Three 1959 models, keeping more Studebaker loyalists returning to showrooms was key. Another possible ten percent or more added to Lark volumes would have been icing on the cake. Ultimately here too, as with Plan 2A, the casualties of this program were both the 1959 Golden Hawk and President, perhaps even Commander and Econo-miler taxicabs versions as well.

What put an end to this concept? In a word, undercapitalization. Note Plan 2B had the costiest tooling bill of the lot. Much of what would be built for 1959 was predicated on financing generated by strong 1958 sales; they had no other resources to turn to after so many money-losing years. As those sales continued to seriously deteriorate, buoyed only by the Scotsman, another financial crisis reared up, one threatening to scuttle the whole operation before the Lark ever made it to market. Author Ebert details the tribulation Churchill negotiated in the latter months of 1958 to restructure company debt in order to keep operating, make it to new car introduction. Though detailing how he did it is beyond the scope of this discussion, a reading makes clear Churchill was a man of his convictions that the compact car would be a successful avenue and fought to make it happen. It remains a shame he wasn't able to give us further Golden Hawks and Presidents but to his credit guided the company to its last great sales success.

Your comments and observations welcomed.

Steve

Stu Chapman
10-01-2014, 02:03 PM
I thoroughly enjoyed reading your extensive comments and analysis Steve. They were very well thought out and make a lot of sense.

The Churchill era was before my time at Studebaker, however I did have the pleasure of meeting the man and serving with him on a panel discussion in South Bend in 1978. Unfortunately he had the problem of a monkey on his back in the person of Byers Burlingame, who subsequently became our problem as well in the 60s.

I hope you've had the opportunity of reading my book, My Father The Car, which covers the problems we faced from 1963 to the end.

Stu Chapman

BobPalma
10-01-2014, 02:49 PM
Good analysis, Steve; thanks.

Those who find this interesting will want to obtain a copy of the Museum's new DVD of our January 6, 2014 Museum Symposium, Studebaker's Closing: Separating Fact from Fiction. Mr. Ebert was the first presenter, with an excellent slide show that is on the DVD. He reviewed much of what is here, went on to the days of the early 60s and, finally, the decisions that had to be made late in 1963.

However, that DVD has proven more popular than was anticipated. :ohmy: Kevin Wolford reported being at the Museum Store this morning (October 1) and the DVDs were sold out! :!!: More are on the way, though, so "don't touch that dial" if you want one. :cool: BP

qsanford
10-01-2014, 03:48 PM
That opens up a lot of potential to imagine what a '59 President could have looked like. I imagine a Larkish grille flanked with slanted stacked headlights ala Lincoln Continental. Maybe, if Packard had to go, use the Packard taillamps with the President Tailfins?

556063
10-01-2014, 05:26 PM
With the recession of 1958, and Rambler really the only player in compacts at the time, Studebaker's hand being forced to become primarily a compact manufacturer in 1959 looked brilliant at the time. Was it more simply luck than planning? As you point out, AMC ended up having a wider, more comprehensive product offering once everyone was offering a compact. The Lark probably brought more "conquest" sales to Studebaker than returning, traditional Studebaker buyers. As the question is asked, did Studebaker leave it's traditional customers high and dry, thus forcing it out of business in 1966, while AMC soldiered on until 1988?

I would propose, and it is only a proposal, that the demographics and tastes of the auto buyers changed enough from 1955-65 that it would have made it more difficult for a 1959-64 "President" to pay it's own way. We saw, Nash, Hudson, and De Soto disappear, and the failure of Edsel, all in the same time frame. That full size market was consolidating ranks in certain quarters during that time period.

We recently saw changing demographics almost eliminate the Minivan segment in the 2000's. As the number of young families declined, so did the demand for that product. As the traditional buyers of the 40's and 50's gave way to the younger, sportier oriented buyers of the 60's, products unimaginable in earlier times like the Mustang, Riviera and Cutlass grew in importance. Full size Chevy's and Fords pretty much ruled that market in the 60's, with little that could seriously challenge them.

Very interesting history, good write up. But I think it could be argued Studebaker in 1959-61 in many ways was like a "blind pig finding an acorn". Hitting what is in demand can be a moving target, and the stars aligned for a company that could no longer afford to put a player in every position.

2R2
10-01-2014, 10:18 PM
The Rambler Ambassador was not really a bigger car then the Rambler Classic, just longer. Remember, the body tub was the same between them, the Ambassador just received a longer clip, and fancier trim. Then again, Studebaker DID come out with a bigger fancier car than the Lark - the Cruiser in '61. Maybe this is the car they should have had right from the start in '59. The higher profit margins on the car would have been a plus.
Regarding a full size 120" wheelbase car for '59, there are pictures of styling proposals of such a model in Ed Reynolds Lark book. As far as sales potential, I would guess maybe a few thousand. Keep in mind that many of the duel dealerships Stude added when the Lark came out had their own full size car to sell, and I doubt they would pushing a big Studebaker. I think a bigger draw would have been to continue with a fancier Hawk - something the same or similar to the Golden Hawk. It might prove to be at least somewhat of a halo car for the Studebaker line.
These exercises are interesting, and with over five decades of hindsight, it is fun to talk about "what ifs"

56H-Y6
10-02-2014, 09:29 AM
Hi

Thanks all for your comments and insights, proper responses to each shortly.

Steve

56H-Y6
10-03-2014, 01:29 PM
Hi

Thank you gentlemen for your thoughtful responses and insightful comments.

Stu Chapman: Thanks, it's nice to have someone who was inside find my analysis worthwhile. I will be reading your book next, it dovetails with this book and "The Fall of the Packard Motor Company" by James A. Ward. Ebert examines the Egbert and Burlingame periods as well, the contrast of their management styles is striking. That "monkey on the back" was one placed on your operation by a board who had decided automobiles were no longer a business in which they wished to participate. That decision was revealed in 1960 when they turned down funding for the all-new 1962 compact line that included both four and six cylinder models. Without an completely new line to field, the inevitable end was just a matter of time.

Bob Palma: I've enjoyed your writing as well, I will avail myself of that DVD. I'm sure it has much to find of interest and insightful.

qsanford: I'll further address what a potential 1959 and later President could have looked like in the following below.

Messieurs 556063 and 2R2: To enlarge on points you've made.

" But I think it could be argued Studebaker in 1959-61 in many ways was like a "blind pig finding an acorn"". Their entry into the compact car market seems more a case of "the blind pig being shown the acorns" by the increasing import car and Rambler volumes. Brillant and courageous would have been Churchill setting the compact car program in motion by late 1956 for the 1958 model year. As it was, the 1957 and 1958 were standing pat for more two years, hoping people would miraculously find their cars somehow more appealing than in 1956. Only when he moved on the Scotsman did the spark start to kindle for new direction. Although this might sound like a criticism of Churchill, its not meant to be. He was managing under extremely trying conditions to stem the loses, satisfy C-W management as well as groping for a promising avenue.

A sea change to the compact market was definitely going to leave a share of old-line customers high and dry, it was a calculated risk. The inclusion of a 1959 President would have been a hedge against their desertion. It's success hinged completely on how well the compact and the Hawks sold, given that ninety percent of its components would have been shared with those. As far as shelf life, its saleability, as constituted would have lasted perhaps through the 1962 model year. As such, it would have been an interim model, possibly leading to a longer wheelbase sedan version of a new Studebaker compact. Since the central body structure updates would have been shared with the Lark, later restyling could only be front and rear clips, etc which should have been unique, though maintaining a familial appearance, most desirably with the Hawk. The 1959 version could have been but a light restyle combining 1958 President and Packard components plus a few new features. For 1960, had the market response been good enough, unique front and rear styling, modified C-pillar all possible but still relatively modest.

As compared to the Rambler Ambassador, Y-Bodies Cruisers (as a President would), delivered real interior space improvement, not simply a longer front end and fancier interior. Oddly enough, that advantage was never promoted to the degree it should have been. And as immediately popular as the Cruiser proved to be for 1961, why it wasn't part of the 1959 Lark line-up is a mystery. Even more perplexing when one realizes that its basis, the Y-Body Econo-miler was in production throughout, in minimal quantities. Someone in marketing truly missed the boat on that one.

Another boat that sailed without South Bend was the lack of a 1959-61 Golden Hawks. In a 1958 market anomaly, as bright a spot as was Rambler, so too was the Ford Thunderbird. Two cars about as unlike as could be. Interest in the latter was at a high pitch then; the Hawk was the only direct American competitor. For 1959, Thunderbird sales were advanced 180% and for 1960 another 137%; an updated Golden Hawk could have enjoyed a piece of this. If the Gran Turismo Hawk had been introduced for 1960, the story would have been very different. The fact that sales doubled for 1962 over 1961 demonstrates another missed opportunity. Ironically, except for size, the Avanti was very much the same concept as the Mustang would be.

Customer buying patterns changed very dramatically in the 1955-65 period. At the end of WWII, few would have predicted the inroads made by small imported cars a decade hence. Or the medium-price segment consolidation that dealt even Big Three makes a demise, to say nothing of the Independents. When the modern, unibody compact arrived, the days of body-on-frame compacts were over. Engine technology had advanced as well, Studebaker had no chance to survive and profit as long as it depended on those old methods and engineering to build its cars. As the market fragmented repeatedly throughout the 1960's, the chance for Studebaker to survive would have paralleled AMC. It's surprising even AMC made it as long as they did, eventually they were defeated by it at the end of the 1970's. If one wants to know what a latter 1960's President would have been like, one only need examine a 1965-74 Ambassador for the answer.

Steve