What happen to Studebaker?

[dallastx75208]

I do not see on the sight where I can search for this information. I am new to Studebaker and do not have a car yet but am looking for one.
Why did Studebaker go out of business? It seems from all the information I have read on here they had a good product. The Hawk should have competed with the T-Bird.

[BobPalma]

Jon, you'll get a lot of answers to this question, but the primary reason, without being a smart-alek, is that they just didn't sell enough cars (and trucks) to stay in the automobile and truck manufacturing business.[}]

A number of factors caught up with Studebaker after WWII. Economies of scale made it harder and harder for the independents to keep their heads above water after the immediate postwar sellers market went away beginning in 1950. However, there was a brief respite in late 1950/early 1951, when people ran back in to buy cars for fear that the Korean War would leave them without a new car (again).

Labor relations at Studebaker were pitiful. They prided themselves so much on never having had a bad strike that they wound up with workers [)] making more than they could at The Big Three, but that higher cost had to be spread out over FEWER cars! [xx(] The result was that prices kept getting higher and higher in relation to their competition.[:0]

Management made several product tactical blunders, too. The 1953 models showed great promise[], but the idea of building essentially two different cars that looked alike resulted in, again, higher costs per unit than could be tolerated and still be competitive. [8] And it took forever to get the first units thrown together and shipped, long after many folks had just gone out and bought a nicely warmed-over [for 1953] Chevrolet, which had better body integrity anyway... and a generally lower price, model-for-model.

The truck line was a knockout in 1949; very contemporary, ahead of the competition, and well-received. But it was given too little attention thereafter and all but allowed to die on the vine.

The singular brilliant decision after WWII was to develop a modern OHV V-8 engine. That V-8, and having any truck line at all, is what kept Studebaker alive into the mid-sixties. Without trucks and a good V-8 engine, Studebaker would have died as did Kaiser, Hudson, Nash, Packard, Willys, etc., in the mid-1950s. (Sure, Hudson and Nash "sort-of" survived as American Motors, but not as identifiable brands.)

Having been an attentive student of Studebaker since I was about 9 years old (1955, when my Dad became a partner in a Studebaker dealership), here's my personal opinion (OPINION, I stress!). The remaining Studebaker brothers surviving to run the company at the dawn of the automobile age were simply too old and too wealthy (having slain all the dragons they needed to), to embrace the new automobile and take advantage of the best dealer network and name recognition going in 1900 and shortly thereafter.

Son-in-law Fish had to more-or-less drag them screaming and kicking into the automobile business through the back door. Their heart was never sufficiently "in it" to make what could have been a very successful transition from horse-drawn vehicles to automobiles, using the enviable name recognition and excellent dealer network already established. (Sure, I may have oversimplified, and I stress that is my overall opinion. There are of course a million details and "what-ifs" that could be discussed for ages...and will be as this thread unfolds, I am sure. Maybe even Dick Quinn could be drawn in. We'll see.)

So your question is a fair one, but is not easily answered in a few paragraphs.BP

[whacker]

Very good analysis, Mr. Palma, but you forget that the big two, f*rd and ch*vy, had a price war going from 1952 to 1957 and sent cars out to the dealers so fast the dealers had to get them off the lots before the next load came in. The result was that you could order a car from Studebaker, or Packard, or Hudson, and wait six weeks, or you could drive onto the big guys lot in your old car and drive out in a new one. They didn't want Studebaker to fail, they just didn't want them to succeed! The worn out old plant in South Bend just didn't have the capacity to pump cars out, and the company wasn't financed well enough to ship cars on credit to small dealers. When the Hamilton plant came on line, the capacity problem was solved, but by then the credit problems were catching up. All part of the mix. You have to remember, Studebaker didn't fail. They just quit building cars. They still made lots of other stuff, they just decided to cut their losses and ride the winners. A bean-counter decision.

[StudHawk60]

My Dad worked at the Studebaker plant in 1950-51 (installing dash boards and rear seats), before going into the Air Force. He said that management was so screwed up and didn't know what was going on that there were a few employees that punched in to work on their shift, left the building, walked a couple blocks and worked their shift at Olivers. After their Oliver shift was over, they'd come back to Studebaker and punch out from their "shift" there. Management never did catch on. He also noticed that a good percentage of employee cars in the parking lots were NOT Studebakers. What's that tell you?

[dallastx75208]

Thanks for the report. I was just wondering why they did nto make it. It seems like most companies, upper management was the problem.

quote:Originally posted by BobPalma

Jon, you'll get a lot of answers to this question, but the primary reason, without being a smart-alek, is that they just didn't sell enough cars (and trucks) to stay in the automobile and truck manufacturing business.[}]

A number of factors caught up with Studebaker after WWII. Economies of scale made it harder and harder for the independents to keep their heads above water after the immediate postwar sellers market went away beginning in 1950. However, there was a brief respite in late 1950/early 1951, when people ran back in to buy cars for fear that the Korean War would leave them without a new car (again).

Labor relations at Studebaker were pitiful. They prided themselves so much on never having had a bad strike that they wound up with workers [)] making more than they could at The Big Three, but that higher cost had to be spread out over FEWER cars! [xx(] The result was that prices kept getting higher and higher in relation to their competition.[:0]

Management made several product tactical blunders, too. The 1953 models showed great promise[], but the idea of building essentially two different cars that looked alike resulted in, again, higher costs per unit than could be tolerated and still be competitive. [8] And it took forever to get the first units thrown together and shipped, long after many folks had just gone out and bought a nicely warmed-over [for 1953] Chevrolet, which had better body integrity anyway... and a generally lower price, model-for-model.

The truck line was a knockout in 1949; very contemporary, ahead of the competition, and well-received. But it was given too little attention thereafter and all but allowed to die on the vine.

The singular brilliant decision after WWII was to develop a modern OHV V-8 engine. That V-8, and having any truck line at all, is what kept Studebaker alive into the mid-sixties. Without trucks and a good V-8 engine, Studebaker would have died as did Kaiser, Hudson, Nash, Packard, Willys, etc., in the mid-1950s. (Sure, Hudson and Nash "sort-of" survived as American Motors, but not as identifiable brands.)

Having been an attentive student of Studebaker since I was about 9 years old (1955, when my Dad became a partner in a Studebaker dealership), here's my personal opinion (OPINION, I stress!). The remaining Studebaker brothers surviving to run the company at the dawn of the automobile age were simply too old and too wealthy (having slain all the dragons they needed to), to embrace the new automobile and take advantage of the best dealer network and name recognition going in 1900 and shortly thereafter.

Son-in-law Fish had to more-or-less drag them screaming and kicking into the automobile business through the back door. Their heart was never sufficiently "in it" to make what could have been a very successful transition from horse-drawn vehicles to automobiles, using the enviable name recognition and excellent dealer network already established. (Sure, I may have oversimplified, and I stress that is my overall opinion. There are of course a million details and "what-ifs" that could be discussed for ages...and will be as this thread unfolds, I am sure. Maybe even Dick Quinn could be drawn in. We'll see.)

So your question is a fair one, but is not easily answered in a few paragraphs.BP

[BobPalma]

quote:Originally posted by whacker

Very good analysis, Mr. Palma, but you forget that the big two, f*rd and ch*vy, had a price war going from 1952 to 1957 and sent cars out to the dealers so fast the dealers had to get them off the lots before the next load came in. The result was that you could order a car from Studebaker, or Packard, or Hudson, and wait six weeks, or you could drive onto the big guys lot in your old car and drive out in a new one. They didn't want Studebaker to fail, they just didn't want them to succeed! The worn out old plant in South Bend just didn't have the capacity to pump cars out, and the company wasn't financed well enough to ship cars on credit to small dealers. When the Hamilton plant came on line, the capacity problem was solved, but by then the credit problems were catching up. All part of the mix. You have to remember, Studebaker didn't fail. They just quit building cars. They still made lots of other stuff, they just decided to cut their losses and ride the winners. A bean-counter decision.

Well, a little too general, there:

Ford did declare a production war on GM, and GM responded in kind, but it wasn't until 1953. Prior to that, the Korean War kept them at bay. And they were pretty well over that by 1955. GM didn't suffer as Ford had hoped, but it did further seal the independent's doom.

Studebaker's South Bend facilities may have been old, but they had plenty of capacity. No problem at all turning out all those Larks in 1959, for example. In fact, it was their being UNDERutilized for the cars being sold that made the South Bend facilities inefficient. BP

[Stude4x4]

I've also heard that Studebakers biggest problem was management. I think another problem was that they didn't change their products much. Personally I don't see a problem with using the same cab from 49 to 60 or using the same bed from 49 to 60. They had a good product and they didn't think they needed to change it. If it works leave it alone. Most car companies today can't keep the same product for more than three years. Studebaker was just too far ahead of their time.
Jake

[Roscomacaw]

StudeHawk60 wrote: "My Dad worked at the Studebaker plant in 1950-51 (installing dash boards and rear seats), before going into the Air Force. He said that management was so screwed up and didn't know what was going on that there were a few employees that punched in to work on their shift, left the building, walked a couple blocks and worked their shift at Olivers. After their Oliver shift was over, they'd come back to Studebaker and punch out from their "shift" there. Management never did catch on."

Man - that sounds like McDonnell-Douglas' Long Beach plant when I worked there in the late 80s. M-D had a great line of commercial airplanes and new, truly innovative designs coming on. But they were also building military aircraft and had been since WWII.
The old firm NEVER had to watch it's wastefulness in all those years. And the waste was SO wanton and ridiculous - thanks to the glut of govt bucks that poured in - that no one had a clue as to what might happen when the flow of govt. dollars slowed to a trickle!

Guys in my department would clock in at 7AM and then turn around a leave. They'd do this several times a week! Beyond what your dad saw at Studebaker - at M-D, if they didn't return to clock out at 3:30PM, the M-D time clocks just did it for them. The assumption was that the worker must've forgotten to punch out. So you got paid anyway - without question![:0]
They'd even do this on overtime. Overtime assignments that they had CONTRIVED to happen so they could collect the time & a half or double time without having to actualy do anything but show up to clock in!
Then there was the deliberate waste of materials.... but that's another story. I was a whislte-blower in one instance of material waste. My reward was getting my ass chewed for rocking the boat![}]

Hourly? Management? They collaborated in killing McDonnell-Douglas.[8]

Miscreant at large.

1957 Transtar 1/2ton
1960 Larkvertible V8
1958 Provincial wagon
1953 Commander coupe
1957 President 2-dr
1955 President State
1951 Champion Biz cpe
1963 Daytona project FS

[SoCal54Champion]

By the early 1960's Studebaker was fairly diversified and had the option of ceasing automobile production and staying in business.
I understand that the automobile operations turned a profit in 1966 but not enough to justify the continued use of precious capital.
I guess the good news for us as preservers of the marque is that Studebaker made a commitment not to leave owners of their cars high and dry. The huge majority of spare parts was preserved and distributed and even now you can get NOS parts in the original carton and wrappers for managable cost.
Unlike the poor AMC folks who had to watch in horror as Chrysler buried or destroyed large inventories of parts inorder to claim the tax breaks. I think it easier to find NOS parts for a 1950's Studebaker than it is to find NOS parts for a 1970's AMC.
We're very lucky compared to our bretheren independants....

"Oh That? It's a STUDEBAKER!!"

[Jessie J.]

[quote]quote:Originally posted by dallastx75208

......It seems like most companies, upper management was the problem.

While I agree with the points made by others concerning Studebaker Corporations fiasco's of the '50s and '60s, I think it important to realize how badly earlier blunders had affected the company.
The seeds of Studebaker's eventual demise were planted in the '20s and '30s when Studebaker's upper management under the leadership of Albert Erskine continued to pay out huge stock dividends while the company was losing money, under the mistaken belief that "prosperity was just around the corner". Previous to The Great Depression, Studebaker was marketed and accepted as an upper level prestige marque, and no attempt was made to compete in the 'low price' and low prestige market. (except of course for the ill fated 'Erskine')
After Studebaker's management had squandered the Company's capitol and brought it into bankruptcy, they were never again able to regain the publics perception of being a 'prestigious' automobile. The future 'sales successes' of Studebaker from the '39 Champion through the last of the Lark's were 'cheap cars' of low prestige.
(while the Avanti might be considered by some a 'prestige' vehicle, it was not a sales success, perhaps mainly because it was saddled with the Studebaker moniker )
Stop and consider what might have been had not management so sullied Studebaker's sterling reputation, If they had stayed the course and shown fiscal restraint and conserved capital, they would have been able to build new production facilities, and had the resources and good will needed to see such products as the Pierce Silver Arrow placed into full production.
What a different outcome had the President remained in uninterrupted production, and in public perception an outstanding prestige vehicle from one of the most respected Company's in the world.
In short the blunders of the early Depression years are what held Studebaker bound to the position of a struggling 'independent' rather than blossoming into one of the largest and most successful of auto makers in the modern world.
A few different (better)choices back then, and today we would be able to walk into a dealer showroom and purchase a new 2006 Studebaker Commander, President, or even a Silver Arrow rather than some lesser makes like the lowly Mercedes, Lexus, or Infinity.

[Transtar56]

What I could never understand is why Studebaker was not a primary builder of trucks,right up to the heaviest.
They had a great name in the wagon business from the start,so why they didn't more agressivly compete with Mack and I-H than fighting out the car wars with Ford and GM.
It seems most years,except for the early post war years and the new C-Cab,Studebaker failed to push its truck market really bad.

[Jessie J.]

Trucks?... again, "upper management was the problem", It is sad the number of 'golden opportunities' Studebaker's management managed to miss out on, as has been stated before, sadly, Studebaker failed only because it deserved to fail.
Not that the actual products were "bad" but that the Company had been ran so ineptly for so many decades, marketing was a disaster, and the dealer level sales and service departments were hopelessly outdated.(My '65 Cruiser was sold new out of a 2 car garage 'dealership' that was an "Authorized Studebaker Sales and Service" franchise but probably sold less than 5 new vehicles a year)
In 1964 when Studebaker closed its South Bend operations, the rest of the automotive industry was in the midst of a sales boom cycle, yet Studebaker could barely give its products away, due to managements ill advised decision to overproduce in '63, effectively undermining any effective sales push. The glut of '63s first had to be unloaded at large discounts, stealing sales away from the already weak sales of the '64s. BTW, The '64 models have always been my favorites and I presently own 3 1964 Daytona HTs.
Had a few different choices been made by management in the '50s and early '60s, Studebaker could easily have obtained and held onto a big piece of the truck market. (look at the phenomenon of 'Jeep')That they neglected opportunity after opportunity cannot be laid at any other door than that of "upper management".