why did studebaker go belly up?

[Skip Lackie]

quote:Originally posted by dpson

I'd like to add one observation as to the reason for Studebaker's demise in the 1960's as was told to me by my father (a diehard Oldsmobile man) who was a part of the car buying generation in the late 1950's and 1960's; Studebakers in this part of the country (northern New England) had the front fenders rust through in the first two years. This gave the general impression (undeservidly so) of poor quality. Unfortunatley Studebaker didn't address the problem until it was too late.

1960 Lark Convertible
1962 Lark Regal Convertible

In 1974 I attended the first national meet of the Milestone Car Society at Carlisle, Pa. Brooks Stevens and Robert Andrews were two of the guests of honor. After they had talked for a while about what it was like to be a car designer, they opened the floor for questions. I asked them why they didn't fix the fender rust problem -- certainly by the time they were designing the Avanti and GT Hawk in the early 1960s, there was plenty of evidence that all the Studes built after 1953 had serious front fender rust problems. They replied that they had suggested that the design of the rear of the front fenders be modified so they wouldn't retain water. Studebaker refused to make the change, as it would add 35 cents to the cost of each fender. It was already costing Stude a couple of hundred dollars more than Chevy to make a car, and they had to cut corners wherever they could.

Sigh. If only . . . . .

Skip Lackie

[sbca96]

quote:Originally posted by Skip Lackie
They replied that they had suggested that the design of the rear of the front fenders be modified so they wouldn't retain water.

AH! Look at it this way .. it lightens the car for better weight
distribution over the course of a few years!! Design superiority!!

Tom

[rockne10]

www.studebaker.com

[Transtar56]

None of the independents after the post war boom could build and sell cars competively with the big three,and that was before the imports,then only VW and a few British makes were in the picture.
Look at Hudson,you might not care for the styling but if you have ever driver a big Hornet with the 308 Twin -H power,you know they were damn fine cars.Look what Marshall Teague did with them in the early fifties on the stock car circuits,and in those days they really where close to being stock cars. All the shot gun marriges with the independants were caused by the fact that nobody could sell a car like a Ford or Chev as cheaply as they could,nor did anyone else have the vast dealer networks.
I think Studebaker,as it srarted out as a wagon builder and sold well in rural ares to rural type people,should have put much more effort into the truck market,why not go head to head with Mack and I-H,Diamond,and White,than try to build a better Chevy.
Sure,management made lots of mistakes,but it was almost sure to happen as the big got bigger and the small competed for crumbs,after 1950 the writing was on the wall.
I remember an article Tom McCahill wrote about newly formed American Motors,why didn't George Rommney dump all the big car line that wasn't selling,and just concentrate on the Rambler,as at that time the little Rambler had no competion and was selling,a fact that didn't go unoticed by Studebaker in the late fifties.
Its all ecomomies of scale,and I sure hope that GM and Ford arn't heading down the same path,even though I bought a new KIA,simply because I think it was the biggest bang for the buck in what I wanted,a well built truck with real off road capabilites.
Ive been hooked on off-roading since my 29 Studebaker I built into an off-roader when I was a kid,then later I went through a half dozen VW dune buggies,several Honda three and four wheelers,a 76 Dodge Ramcharger,and many dirt bikes.
It sure is fun finding your way to uninhabited beautiful country like we have here in Nova Scotia,its a real passion for me.

[56H-Y6]

Good Subject, all good realistic responses!
I became facinated to find the answer to this question 30 years ago and my understanding is mostly complete now.
I'd like to add:

1): How odd it was that the Hoffman and Vance management team that had brought Studebaker out of receivership in the 1933-36 period and built the success of the Champion before WWII, seemed to lose direction in the postwar period.
They were responsible for giving into the generous labor contracts, to being so bend upon being "the friendlist Factory in America" that they hobbled the company with excessive per unit costs.

2): In the period when they were the most profitable, the forties, they did not take action to build new, modern production facilities as exampled by other automakers to become more efficient. That sin of omission guaranteed to put them behind as the industry evolved.

3): As the competitive situation heated up for styling cycles, holding a body over for six years (1947-52) was unacceptable. This from a company whose reputation was made on new and progressive designs.

4): When forces in the industry turned into a headwind for the company, not taking bold actions to correct the situations as much as was possible. At some point, every decision seemed to be just a holding action.

Regards
Steve

[Blue 15G]

All that has been written so far is true, and quite interesting. Another definite factor in Studebaker's demise was the fact that their dealer network was less than the best. Many of Studebaker's dealers also sold farm equipment, or were just basic service stations, etc. and the cars were a sideline. Studebaker should have weeded out these sorts of places right after WWII. Also, even the ones that sold Studebaker exclusively often kept very minimal stock. For example, I talked to a man who was a part-time salesman for a Studebaker dealer in the Lark era. He said that typically the dealer would have just one Lark in stock, let's say a blue one. The customer would say "I really wanted a red one". Then they would go somewhere else and buy a red car, but it wasn't a Studebaker.

Also, as the years went by, some dealers knew that only a small number of people would buy a Studebaker anyway, so they wouldn't discount nearly as much as the Big 3, because they saw no need to do so. They still made their money, but it didn't help on the corporate level.

I recall reading somewhere that in 1958 some Studebaker dealers were selling less than one car a month. [:0] Now, even in the 1958 recession, don't you think they could have tried just a little harder than that?

Of course, there were good dealers as well. But too many bad ones.

[imported_n/a]

In the pictorial: "Studebaker Remembered"(published by the South Bend Tribune), there is a photo of some office workers holding a sign that says "Going Out Of Business-- Dec. 17, 1963". What makes this so interesting is that the five middle-aged people in the photo are smiling broadly, as though it were just an office party before a Holiday. A looong holiday for many people, I would guess. [:0]

[56H-Y6]

Hi
After reading all the responses to this subject, I am impressed with the depth of knowledge of those contributing.
I think it would be a good idea if these reasons were collected into a feature on the main page, for the continuing information of those who visit the website with a curiousity about the central question.
Regards
Steve