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  • Forum Discussion: April 2008 Almanac Article

    For easy reference, I thought we might begin a thread dedicated to discussing the lengthy, interesting letter to Gordon Grundy presented in the April 2008 Turning Wheels Almanac. Columnist Dick Quinn solicited comments at the end of the article. Dick frequents this forum, so comments posted here will be available for his (and others) viewing and he can respond publicly or privately as he wants. This should be an interesting discussion! Not for everyone, of course, but for those interested in the company's last years as an automobile manufacturer.

    The most suprising element of Mr. Burlingame's missive, at least to me as a student of these things, was the intolerable, pathetic per-dealer sales of new Studebakers cited: An annualized rate of 8 new cars per dealer per year for 1965! Stop and think about that. Another way of expressing it is this: The average Studebaker dealer in 1965 went a full four months without selling one new car...and after those four months were up, he only sold one new car per month for the balance of the year! E-GAD!

    Anyway, I concur with Dick's summary in Turning Wheels; Mr. Burlingame's writing to Mr. Grundy repeatedly emphasized only one thing: cost reduction, cost reduction and, then, more cost reduction. Mr. Burlingame paid scant lip service to product development for 1967; indeed, he says engineering costs are already too high and must also be reduced! How Mr. Burlingame thought the Automotive Division would meet new U.S. federal safety standards for 1967 model year automobiles is a good question. Maybe he didn't.

    Overall, Mr. Burlingame's directive to those in Studebaker's Automotive Division might be summarized thus:

    "Mr. Grundy, I am certain that I reflect The Board of Directors when I say that we would like to remain an automobile producer, providing your division can sell more cars without adding dealers, reduce the costs incurred to build those you are building, and spend even less money developing new product in an increasingly hostile government environment that continually imposes new regulations on the industry.

    The Board has every confidence in your and The Automotive Division's ability to accomplish 'all the above.' While this is a daunting assignment, we trust you are up to the challenge...and if not...."


    Naturally, such frankness would not have been tolerated in a document of this nature, so Mr. Burlingame necessarily couched the above message in more pleasant prose.

    For the longest time, especially as a young man of 18 when Studebaker ceased South Bend production, I did not like Mr. Burlingame. I knew he had been Packard's undertaker, and felt certain he had been elected to succeed my hero, Sherwood Egbert, to preside over Studebaker's burial as well. As an unadulterated bean-counter (sorry, Bill Pressler!), I envisioned him as needing a stiff drink every evening just to keep his blood circulating above the freezing point.

    However, given the wisdom that comes with age, I now know Mr. Burlingame was doing exactly what he was supposed to be doing; protecting shareholder equity in Studebaker Corporation stock, producing a return on the investor's money, and, hopefully, increasing the value of that stock. Sadly, the proud tradition of Studebaker as a vehicle producer necessarily wound up in Mr. Burlingame's crosshairs, to the disappointment of thousands of loyal customers and enthusiasts...and what were certainly hundreds of dedicated dealers and their employees.

    I'd be remiss in not commenting on Gordon Grundy and SDC's own Stu Chapman in this appraisal. I have always
    We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

    Ayn Rand:
    "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

    G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

  • #2
    quote:Originally posted by BobPalma

    For easy reference, I thought we might begin a thread dedicated to discussing the lengthy, interesting letter to Gordon Grundy presented in the April 2008 Turning Wheels Almanac. ...I'd be remiss in not commenting on Gordon Grundy and SDC's own Stu Chapman in this appraisal. I have always highly regarded those men as among the best-ever Studebaker Automotive Division executives. They were excited about Hamilton supplying Studebakers for the world after January 1, 1964, and took their assignment as enthusiastically as they did seriously. That the skids were greased beyond their human ability to clean them is to take nothing away from their sincere and heartfelt dedication to their job. ...
    When I picked up my '64 Wagonaire at Hamilton in May of '64 I was given a factory tour by one of the executives (unfortunately don't remember who). It was quite a contrast to South Bend. The plant was very clean and bright and morale seemed to be very high. Everyone was excited and proud that they were THE Studebaker production facility. The man escorting me took great pride in pointing out things they were doing better than South Bend (even if they did forget to put oil in my overdrive). The attitude there even made me feel better about my purchase when there was so much. uncertainty about the future.


    [img=right]http://www.frontiernet.net/~thejohnsons/Forum%20signature%20pix/R-4.JPG[/img=right][img=right]http://www.frontiernet.net/~thejohnsons/Forum%20signature%20pix/64L.JPG[/img=right][img=right]http://www.frontiernet.net/~thejohnsons/Forum%20signature%20pix/64P.jpg[/img=right][img=right]http://www.frontiernet.net/~thejohnsons/Forum%20signature%20pix/53K.jpg[/img=right]Paul Johnson, Wild and Wonderful West Virginia
    '53 Commander Starliner (since 1966)
    '64 Daytona Wagonaire (original owner)
    '64 Daytona Convertible (2006)
    Museum R-4 engine
    1962 Gravely Model L (Studebaker-Packard serial plate)
    1972 Gravely Model 430 (Studebaker name plate, Studebaker Onan engine)
    Paul Johnson, Wild and Wonderful West Virginia.
    '64 Daytona Wagonaire, '64 Avanti R-1, Museum R-4 engine, '72 Gravely Model 430 with Onan engine

    Comment


    • #3
      I would love to comment, but apparently someone has heisted my copy of TW prior to its arrival in my mailbox. [xx(]

      UPDATE

      My prescription that was mailed on March 19 arrived today. Can my TW be far behind?


      http://community.webshots.com/user/GuidoSalvage

      Hiding and preserving Studebakers in Richmond, Goochland & Louisa, Va.
      Join me in removing narcissists, trolls, self annoited "experts" and general idiots via the Ignore button.

      The official SDC Forum heel nipper ���

      �Middle age is when your broad mind and narrow waist begin to change places.� E. Joseph Cossman

      For every mile of road, there are 2 miles of ditch. ���

      "All lies matter - fight the kleptocracy"

      Comment


      • #4
        As I responded in the original thread, in my interview with former Studebaker dealer Dave Meachum back in '04, he stated that one of Studebaker's major problems was it's weak dealer network. There were lots of dealers, but a large number of them hardly kept any cars in stock. I've seen this mentioned by other sources through the years as well.

        Seems like it should have been possible for each dealer to sell just a couple more cars per month. But maybe it WASN'T that easy!

        At any rate, this strategy could have helped in the 50s, but by late '65 most people had long given up on thinking of buying a Studebaker.

        AvantiDon, I enjoyed your post and comments.

        Dave Bonn
        Valencia, PA
        '54 Champion Starliner

        Comment


        • #5
          sigpicSee you in the future as I write about our past

          Comment


          • #6
            quote:Originally posted by BobPalma
            The most suprising element of Mr. Burlingame's missive, at least to me as a student of these things, was the intolerable, pathetic per-dealer sales of new Studebakers cited: An annualized rate of 8 new cars per dealer per year for 1965! Stop and think about that. Another way of expressing it is this: The average Studebaker dealer in 1965 went a full four months without selling one new car...and after those four months were up, he only sold one new car per month for the balance of the year! E-GAD!
            Decimal Dude here..... an average of 8 cars per year translates into a sale once every month and a half (or every 6.5 weeks or every 45.625 days ).

            By any means, a minuscule amount. Remember, this is the AVERAGE, meaning there were likely dealers selling less. I have a friend who quit his job and ended up taking a sales job (no prior experience) selling cars at a local Honda dealer. He did it for a little over a year until he found something in his field, but was the leading salesperson the last 11 months there (talk about upsetting the other guys). In his best month, he participated in the sale of 32 cars.

            I hope these Studebaker dealers had another income stream (other brands, tractors, implements, etc.) to keep them afloat.


            http://community.webshots.com/user/GuidoSalvage

            Hiding and preserving Studebakers in Richmond, Goochland & Louisa, Va.
            Join me in removing narcissists, trolls, self annoited "experts" and general idiots via the Ignore button.

            The official SDC Forum heel nipper ���

            �Middle age is when your broad mind and narrow waist begin to change places.� E. Joseph Cossman

            For every mile of road, there are 2 miles of ditch. ���

            "All lies matter - fight the kleptocracy"

            Comment


            • #7
              Dave, I have thought about this subject for a long time probably close to 20 years or so. I keep asking others about what happened wether it be people on here or former Studebaker employees or dealers I have met. One dealer Mr. Dietrich who bought the Bangor PA dealership that Dick mentioned is adamant about some of the thoughts I have posted. He is in a small N/E PA town in a state that had more Studebaker dealers than any other and clearly feels their lack of sales leadership and loose dealer contracts were a major problem.
              sigpicSee you in the future as I write about our past

              Comment


              • #8
                quote:Originally posted by Guido
                I hope these Studebaker dealers had another income stream (other brands, tractors, implements, etc.) to keep them afloat.
                They certainly did, Gary. For the most part, it would have been used cars. To some extent, that's always been true; dealers make more money on used cars than on new ones, often "using" new cars as a means to draw profitable used car trades.

                As you know, my Dad and Uncle Milt moved to Paris IL to take over the Packard dealership there, with a sale date of June 15, 1953. They were greated pleasantly enough by the existing dealers, and were kind of taken under his wing by the crusty old DeSoto-Plymouth dealer, one D. R. Noonan (I never did know what D. R. stood for.)

                D. R. took them to lunch one day and offered the "youngsters" this advice, "Remember, you will make most of your money on used cars. The leg up you have on other used-car dealers is that you have the appearance of a new-car dealership."

                And, as you say, Gary, smaller Studebaker dealers by 1965/1966 may have been selling all sorts of merchandise [:0] in addition to Studebaker automobiles. [8D]BP
                We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

                Ayn Rand:
                "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

                G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

                Comment


                • #9
                  quote:Originally posted by BobPalma
                  [The most suprising element of Mr. Burlingame's missive, at least to me as a student of these things, was the intolerable, pathetic per-dealer sales of new Studebakers cited: An annualized rate of 8 new cars per dealer per year for 1965! Stop and think about that. Another way of expressing it is this: The average Studebaker dealer in 1965 went a full four months without selling one new car...and after those four months were up, he only sold one new car per month for the balance of the year! E-GAD!
                  Somehow,that reminds me of what you stated your dad had to go through when it came to obtaining Packards for the 1955 model year; having to go four months without any brand new Packards to sell, and how upset he was.[V] A complete opposite of some of these Studebaker dealers in 1965!![}] Obviously, they had their minds on other product, be it other makes, or non-automotive items like farm equipment or hardware.

                  Craig

                  Comment


                  • #10
                    As an unadulterated bean-counter (sorry, Bill Pressler!), I envisioned him as needing a stiff drink every evening just to keep his blood circulating above the freezing point.

                    Hey Bob, it's my job, but certainly not my passion (LOL)!

                    I, too, was taken by the ridiculously low sales-per-dealer by that time. Our local dealer, Carl E. Filer Co., was a long-time dealer in a town of less than 9,000 back then (Greenville, in NW PA), but based on retail sales records I saw in the SNM archives, which seemed pretty complete for '64 but seemed spotty for '65 and '66 for this dealer, I noted the following:

                    Jan. '64-Dec. '64 (right after the shutdown of South Bend): Retail sales cards found for 23 retail sales (not counting two cars the Filer family purchased for themselves and also four cars traded to other dealers). There were no cards for January, April, or July. The filing by month was the processing date by the Philly Zone office, not necessarily sales month.

                    Jan. '65-Dec. '65: When first doing this research, I could only find cards for Filer's for April, August, and November. My last visit, I located several more of their cards for '65 but neglected to write them down.
                    Anyway, for April, August, and November, I found seven retail sales cards, not counting two cars traded to other dealers.

                    1966: I could find retail sales cards for only one car, plus another for a car traded to another dealer. Only April could be located in the files ('April' being the processing date by the Philly zone office). The last car Filer's sold was on 3/25/66 to Mr. Albert Allen of nearby Masury, OH, whose occupation was listed as "Retired". It was a solid-turquoise Cruiser with white vinyl interior, serial 530882, which was an early '66 serial no. He traded in a '60 Studebaker.

                    Starting in '64, Filer's sold new Simcas and Sunbeams as well as used cars. Mr. Filer told me he thought that the Chrysler Corp. 5-year warranty on Simcas would be a sales positive (probably like Hyundai's was three and a half decades later). He won a trip to France for selling Simcas, which blows my mind! To this day he still says he likes the '64-'66 Studebaker design.

                    Although I was just a kid in '65 and '66, I believe the bottom fell out of Studebaker sales, big-time, once the Chevy engines started being used, first, and hardtop and convertible bodystyles disappeared. I think those things, on top of the earlier big negative of the move from South Bend and the result of Avantis, Hawks, and trucks disappearing (a psychological bust), resulted in the last nails being put in the coffin.

                    As far as requiring dealers to sell a certain number of cars, I remember some time back looking through paperwork from late '62 for a dealer in Barberton, OH (now home of the big 'Wink's' Studebaker meet each August). It was an agreement signed by the dealer, that they would do everything in their power to sell 25 cars and two trucks in 1963. The "25" and "2" were written in on a pre-printed form. Shows you how bad the truck business, particularly, was by then.

                    BTW, I remember reading somewhere, sometime, that by the closedown in March '66, Studebaker was down to only 450 dealers. That's sure a huge decline in the previous 24-26 or so months.

                    Bill Pressler
                    Kent, OH
                    '63 Lark Daytona Skytop R1

                    Bill Pressler
                    Kent, OH
                    (formerly Greenville, PA)
                    Currently owned: 1966 Cruiser, Timberline Turquoise, 26K miles
                    Formerly owned: 1963 Lark Daytona Skytop R1, Ermine White
                    1964 Daytona Hardtop, Strato Blue
                    1966 Daytona Sports Sedan, Niagara Blue Mist
                    All are in Australia now

                    Comment


                    • #11
                      quote:Originally posted by Blue 15G
                      At any rate, this strategy could have helped in the 50s, but by late '65 most people had long given up on thinking of buying a Studebaker.

                      Dave Bonn
                      Dave, I agree with that general observation. I've often wondered how many people just plain lost interest in Studebaker, including the remaining dealers, when the production source was shifted to Hamilton.

                      Perception is everything in this or any other business. Despite the company's best effort to put a positive construction on the move to Hamilton, far too many people viewed it as the beginning of the end. Few elements of the human condition are more powerful than self-fulfilling prophesies.

                      I still spent a lot of time around Snider Studebaker, the second-largest of the three Indianapolis Studebaker dealerships, after the move to Hamilton. Little things kept creeping in; "things" as small as The Studebaker News going from two color (red and black) to one color (black) ink. (I religiously read every copy in the Office of Sales manager John Knapp, who remained amused by my fascination with the company.)

                      Back in the Snider Service Dept, I had learned a good deal about high-performance stuff from mechanic Bill "Slim" Mitchell, an excellent tune-up man who was assigned supercharger duties and such. Bill taught me how to overhaul a Paxton by age 18, and we remained good friends long after Studebaker was gone and Snider was closed. Slim finished out his career at a large Indianapolis Buick dealership, driving his R-series Studebaker pickup to work there for many years.

                      Bill's enthusiasm for Studebakers was legendary, even though he was a young man while working at Snider. I remember hanging around Bill one day while he was tuning up a white 1965 Cruiser. He was installing new spark plugs and I commented on how they seemed to be harder to get out of the 283 in that chassis than the hundreds of spark plugs I had watched him spin in and out of Studebaker V-8s through the years. Bill mumbled some modest profanity about Chevy V-8s and commented; "They [Studebaker] can't last very long now."

                      And as I've posted here previously, Snider Sales Manager John Knapp told me of a trip to a dealer showing of the 1966 Studebakers in or around Detroit with dealership owner Virgil Snider in early fall 1965. John and Virgil listened to the pitch and, as had been previously arranged, picked up a new 1966 Cruiser to drive back for stock when they left the meeting.

                      John recalled a conversation he and Virgil had over a meal on the way back. John stated that he and Virgil agreed, having read between the lines of what was said to the dealers at that meeting, that "We didn't think they'd [Studebaker] last out the year." And these guys were solid dealers who had sold a ton of Studebakers in the Indianapolis market through the years, and were still doing so, or at least as well as could be expected, if not better. [8D]BP

                      We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

                      Ayn Rand:
                      "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

                      G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

                      Comment


                      • #12
                        quote:Originally posted by Bill Pressler

                        As an unadulterated bean-counter (sorry, Bill Pressler!), I envisioned him as needing a stiff drink every evening just to keep his blood circulating above the freezing point.

                        Hey Bob, it's my job, but certainly not my passion (LOL)!

                        Bill Pressler
                        Kent, OH
                        '63 Lark Daytona Skytop R1

                        "You all" have to understand: Bill and I are good enough friends that he could post something equally offensive about used car dealers and I'd be as amused reading it as Bill would have been writing it. [:0]

                        Good post, Bill. Excellent, interesting documentation about Filer's ability to stay afloat at the end. [^]BP
                        We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

                        Ayn Rand:
                        "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

                        G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

                        Comment


                        • #13
                          Little things kept creeping in; "things" as small as The Studebaker News going from two color (red and black) to one color (black) ink.

                          What message do you think the dealers, salesmen, and potential customers got when they got their first gander at the '66 sales brochure?!!! I'd have probably taken down my 'shingle' then! (although I do like '66 Studes).

                          Bill Pressler
                          Kent, OH
                          '63 Lark Daytona Skytop R1
                          Bill Pressler
                          Kent, OH
                          (formerly Greenville, PA)
                          Currently owned: 1966 Cruiser, Timberline Turquoise, 26K miles
                          Formerly owned: 1963 Lark Daytona Skytop R1, Ermine White
                          1964 Daytona Hardtop, Strato Blue
                          1966 Daytona Sports Sedan, Niagara Blue Mist
                          All are in Australia now

                          Comment


                          • #14
                            Well, we could always blame the Canadians for not showing up in droves to buy CANADA'S OWN CAR! Not very patriotic.
                            "Madness...is the exception in individuals, but the rule in groups" - Nietzsche.

                            Comment


                            • #15
                              quote:Originally posted by Bill Pressler

                              What message do you think the dealers, salesmen, and potential customers got when they got their first gander at the '66 sales brochure?!!! I'd have probably taken down my 'shingle' then! (although I do like '66 Studes).

                              Bill Pressler
                              Kent, OH
                              '63 Lark Daytona Skytop R1
                              [:0] HEY! It was four-color, Bill; whaddya' want? Size? Glamour? Good color registration as a printed product? Sheesh! BP
                              We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

                              Ayn Rand:
                              "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

                              G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

                              Comment

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