No announcement yet.

Studebakers last day

  • Filter
  • Time
  • Show
Clear All
new posts

  • Studebakers last day

    Studebakers last day. In South Bend I mean. What was it like. When was the news released. How was it released? Did union stewards tell groups of employees? Was there a general announcement? Were employees told as they left the plant? What about the incoming shift? Were there cars left uncompleted on the line? Were workers allowed to finish those? Weren't there some government contracts that they continued to work on? Does anyone know or have an article that describes that day and the next few in detail?

  • #2
    Interesting questions!
    1957 Studebaker Champion 2 door. Staten Island, New York.

    "Education is not the learning of facts, but the training of the mind to think." -Albert Einstein


    • #3
      There have been many articles written on how it was handled, but I don't have them handy. The announcement was made several weeks before, and an orderly shutdown was executed. There was a photo of employees leaving the Sample St gate in the snow in the South Bend Tribune the next day. No vehicles were left uncompleted. The Post Office Dept contract for Zip Vans was completed in early 1964. The contract for military trucks was purchased later in 1964 by AM General, along with the Chippewa Ave truck assembly plant.
      Skip Lackie


      • #4
        I know the 4 63 Avanti's sent to Granatelli for experimentation were sent back to SB in Feb.64 to be converted from 63's to 64's so there must have been some employes still active at that time in the factory.When the factory was actually vacated I have no idea.


        • #5
          I didn't live in the area yet when the plant closed. Some friends who were told me it was a buyer's market for Studebakers for a while until inventories dropped.
          "Growing old is mandatory, but growing up is optional." author unknown


          • #6
            I would love to see some of the stories. I am especially interested in the manner the employees were told and the first stories in the media.


            • #7
              There were rumors that the plant was gonna close evern before there was an official announcement. And certainly, there had to be some realization by the employees just from looking at what was (or more likely "wsan't") going on.
              I wonder if the corporation looked at this facet of theire business as a complete faliure once it was behind them. Wonder if they broke even on the dies and such they'd paid for for the '64-5-6 models?
              No deceptive flags to prove I'm patriotic - no biblical BS to impress - just ME and Studebakers - as it should be.


              • #8
                Bubba: What you need is a copy of the 1986 softbound, 386-page, 8 1/2 X 11 book, Studebakers in the News, published by Michael Scherer:

                About 30 pages are devoted to reprints of many articles printed around the country and locally, about Studebaker's last model year in South Bend. I have a copy (not for sale) and they show up from time to time; perhaps posting here that you'd like one would smoke one out.

                That said, you must realize that Studebaker was making every effort to play down this idea of "going out of business." Rather, the official emphasis was this being a routine production shift to more modern facilities to bring production costs more in line with sales realities, nothing else.

                They were doing all they could to avoid stories and reports of the automotive division's demise, in that those were about 27 months premature! <GGG> 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.


                • #9
                  Originally posted by Skip Lackie View Post
                  There have been many articles written on how it was handled, but I don't have them handy. The announcement was made several weeks before, and an orderly shutdown was executed. There was a photo of employees leaving the Sample St gate in the snow in the South Bend Tribune the next day. No vehicles were left uncompleted. The Post Office Dept contract for Zip Vans was completed in early 1964. The contract for military trucks was purchased later in 1964 by AM General, along with the Chippewa Ave truck assembly plant.
                  I don't remember the exact date, but as Skip says, it was fairly well in advance of the actual shutdown. I was driving in my '61 Cruiser when I heard on the radio that Studebaker was shutting down. I was only a few miles from the dealer from whom I had ordered my '64 Wagonaire so I drove immediately to his location. He HAD NOT been told and he was pretty miffed about it- got on the phone to the Zone Manager while I was still there. Then I got miffed because they cancelled my early November order. They wanted to fill my order from unsold stock. One offer was extremely close- two differences, a black interior versus the red I wanted and a third seat with Captive-Aire tires. Otherwise it had it all- 289 w o/d, dual exhausts, TT, Hill Holder, HD springs and shocks, pdb, factory air, power back glass, AM-FM, roof rack, all tint glass, wsw Firestone 500s, reclining bucket seats, clock, ws washers, probably more. Wonder what ever happened to that car.
                  I did reorder in April from Hamilton, but had to settle for a lot less equipment (another long story in itself).

                  Yes BP, they were both white.
                  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


                  • #10
                    Studebaker's Defense Division, along with the Chippewa plant and government contracts, was purchased by Kaiser Jeep Corporation in February, 1964. KJC was acquired by American Motors Corporation in 1969.

                    From 1936 to 1963 the Canadian government had a flat import fee on imported car parts and assembled cars. Sometime during 1963 the rules were changed so that Canadian manufacturers could deduct the value of their exports against the value of their imported parts.

                    I have always wondered what came first? The decision to go to Canada or the decision to change the import rates? And what influence did one have on the other?

                    Last edited by Chrycoman; 11-22-2011, 12:09 PM.
                    Vancouver, BC


                    • #11
                      An older friend of mine was determined to buy a spanking new Avanti once he graduated from college in 1963, but his father refused to co-sign, saying "You aren't buying from any damn car company about to go out of business!". Of course, he still regrets not finding a way to pay for it.
                      The only difference between death and taxes is that death does not grow worse every time Congress convenes. - Will Rogers


                      • #12
                        Yes, if anyone has one for sale I would be very interested in buying it.


                        • #13
                          All this discussion reminds me of 1961, when I was discharged from the Army. I had a job lined up and was ready to buy my first new car. My dad had to co-sign the loan for me, since I hadn't as yet established credit. I picked out a '61 Studebaker Hawk, black with red interior, but Dad talked me out of it saying that Studebaker was in bad financial shape and might go out of business. His logic was that I wouldn't be able to get parts for it. I wish I could tell him now that I would still be able to get most parts for that car even today. Every time I see a Hawk like the one I wanted, I can't help but think that I could have had one like it.
                          '59 Lark VI Regal Hardtop
                          Recording Secretary, Long Island Studebaker Club


                          • #14
                            One story that sticks in my mind is a reporter asked a worker if he thought there was anything to the rumor that South Bend factory might close, and the worker smugly said "This plant will be here LONG after I'm gone!" That was just before the plant closed, maybe just weeks before. Somebody here can fill in/correct the details.
                            Proud NON-CASO

                            I do not prize the word "cheap." It is not a badge of is a symbol of despair. ~ William McKinley

                            If it is decreed that I should go down, then let me go down linked with the truth - let me die in the advocacy of what is just and right.- Lincoln

                            GOD BLESS AMERICA

                            Ephesians 6:10-17
                            Romans 15:13
                            Deuteronomy 31:6
                            Proverbs 28:1

                            Illegitimi non carborundum


                            • #15
                              Bob, Heres an article by Pat Foster about Studebakers last days

                              Studebaker’s Final Days | Patrick Foster
                              It has been said that all changes, even the most longed for, have their melancholy. This sentiment is certainly the case with Studebaker, whose last years of life were a whirlwind of success and failure.
                              In 1966 Studebaker – America’s oldest transportation company – closed its remaining automobile plant and exited the car business. The most bewildering thing of all is how quickly the company fell apart. After all, this was no insignificant startup company – Studebaker was more than a century old and once was America’s largest independent automaker. The company was in business a full 50 years before it produced its first automobile in 1902. At Studebaker’s 100th anniversary in 1952 it lagged just behind the Big Three. Just 11 years later, its huge manufacturing complex in South Bend, Ind., closed for good.
                              The post-WWII era had started out well. Studebaker was the first company to introduce an all-new postwar model in 1946, management believing the company “stood to gain much from being the first to give its customers the advantage of advancements both in design and production.” The advanced styling of Studebaker’s new envelope-body cars was impressive, with fenders integrated into the design rather than looking added on. Buyers waited in line for a glimpse.
                              The company soon built a reputation for styling. The 1950 Studebaker introduced controversial frontal styling with rounded fenders flanking a bullet-nose. Some thought it was the look of the future, others hated it, but it was very successful. In 1951 the company brought out a new V8 engine years before Nash, Hudson, Packard and even Pontiac.
                              Then came Studebaker’s centennial in 1952, a yearlong celebration for the company. There was much to be proud of. Studebaker was one of the largest automakers in the world and the future looked bright. The 1952 cars were face-lifted by Raymond Loewy’s designers, featuring a sloping hood and low-set grille that successfully blended the existing lines with a preview of styling themes that would debut on the all-new ’53 Studebakers.
                              But business results for 1952 were mixed. Sales of $586 million were a new record, and net income rose 13 percent to $14.2 million. But profits were far lower than 1948, 1949 or 1950 despite greater sales volume. The problem was high labor costs and low productivity, which had taken root during WWII’s huge demand for military products. Postwar conditions only exacerbated the problem. With the public clamoring for new cars, management wouldn’t risk a strike, caving in to wage demands and turning a blind eye to low productivity. By 1952 work standards at Studebaker were said to be among the lowest in the industry.

                              The soaring postwar demand for autos suddenly ended. Studebaker introduced all-new cars that year, and they proved the company’s undoing. Originally, the 1953 Studebakers were to have conventional styling. However, Raymond Lowey convinced management to authorize production of a stylish coupe with low-slung, very European styling. But then stylists went back and redesigned the sedans to incorporate elements of the coupe styling and that proved a colossal mistake – the awkward Euro-styling made the cars look small.
                              While public reaction to the “Loewy” coupe was outstanding, response to the new Commander and Champion sedans was tepid. Another problem was the discovery that the sales division had badly underestimated expected demand for the coupes while overestimating sedan sales. Also hampering sales were production delays caused by front-end sheet metal that would not mate to the body.
                              This all cost a great many sales, and Studebaker lost money on car production during the first quarter of 1953. April was profitable but in May production had to be cut when a supplier went on strike. Just as that problem was fixed Ford launched its historic Blitz, an attempt to wrest sales leadership from Chevrolet’s grasp. Ford factories shipped thousands of extra cars to dealers, forcing retailers to sell cars for a few dollars over invoice to clear the glut. Chevrolet followed suit and the two giants became locked in a battle that decimated Studebaker. Profits fell more than 80 percent to $2.68 million.
                              Studebaker’s only real product news for 1954 was the Conestoga station wagon, long overdue and unfortunately offering only two doors just as the market was turning to four-door wagons. As the competitor blitz continued, the company’s financial condition worsened, and wage problems could no longer be ignored. In early 1954 the union signed an agreement providing the company some relief. But Studebaker continued to sink, losing $8.3 million in the first quarter. Production went into freefall, dropping to 113,920 vehicles in 1954 versus 334,554 in 1950.

                              A merger with Packard appeared to be the only solution. Packard and Studebaker combined would cover nearly every market segment. And if they could produce Studebaker, Packard and Clipper cars on a common body shell, tooling and amortization costs would be sharply reduced.

                              Neither Studebaker nor Packard looked very promising on paper. Studebaker was losing money at a frightening pace, and although Packard was in better shape financially, it too was losing money. Both companies hoped to avoid having their books closely examined, so an agreement was reached that each would supply the other with the necessary figures on costs, breakeven, net worth and other figures.

                              They merged on Oct. 1, 1954, with former Packard chief James Nance as president. Studebaker-Packard Corporation was the fourth largest automaker in America with more than 4,000 dealers, two automobile brands, trucks and substantial military business. Nance guessed the firm would lose $9 million in 1955, post a smaller loss for 1956 and record a handsome profit in 1957 with all-new cars on a shared body.
                              Worried about continuing losses at Studebaker, Nance sent finance VP Walter Grant to South Bend to get a handle on Studebaker’s costs. A shocked Grant discovered that the 165,000-unit breakeven point mentioned in talks was all wrong – Studebaker’s actual breakeven was 282,000 cars. Nance probably wished he had insisted on a complete audit of Studebaker’s books prior to the merger, instead of choosing to neglect fiduciary responsibilities in order to speed things up.

                              The result showed at year’s end when the company reported an operating loss of $41.7 million, reduced to a net loss of $26 million after tax credits. Until something was done to correct Studebaker’s problems of poor sales and low productivity the bleeding would continue.
                              The 1955 Studebakers were only mildly face-lifted with a taller hood line and a heavy chrome grille replacing the 1954’s twin grilles. A new top-line 120.5-inch wheelbase President series debuted offering two sedans, a coupe and a hardtop plus the gorgeous President Speedster hardtop sporting simulated wire wheels, bumperettes with fog lights, and beautiful interior trim. Sales rose slightly to 138,742 cars and trucks versus 113,920 the prior year – better, but because 1955 was a record year for the industry, it wasn’t very impressive. The business lost another $29.7 million.
                              Although the company desperately needed to consolidate Studebaker, Packard and Clipper models on a shared body, no lender was willing to provide the funding. So restricted, the best Studebaker could afford for 1956 was an extensive facelift, sedans and wagons looking more conventional with new fenders, hood and deck lid. Stylists turned the coupe/hardtop body into a new sporty car called the Hawk. The line included a six-cylinder Flight Hawk coupe, a V8 Power Hawk coupe and Skyhawk hardtop and, topping the line, the awesome Golden Hawk hardtop powered by a 352-cid Packard V8.

                              But buyer response to the 1956 line was only fair and production dropped to roughly 82,000 cars and 20,000 trucks. Studebaker-Packard recorded an operating loss of $43.7 million plus $60 million in special charges for inventory obsolescence and writing down the Packard plants, for a net loss of $102.3 million. The company was dying.
                              Nance talked with International Harvester, Curtiss-Wright, Chrysler and others about merging or selling assets. Defense supplier Curtiss-Wright was the only one interested, attracted mainly by factories like the modern Utica, Mich., plant where jet engines and Packard V8s were built. Curtiss-Wright president Roy Hurley knew that if he merged, Studebaker-Packard’s prior losses could provide tax write-offs on his future profits. Realizing he had Nance over a barrel Hurley toyed with him, first saying he wanted to merge, then calling it off, stringing things along as S-P’s cash melted away. Hurley demanded huge military orders from the government, which didn’t want S-P to fail, in exchange for helping bail out the company. The hard-nosed tactics worked: Hours before Studebaker-Packard was ready to declare insolvency, a deal was reached.
                              Curtiss-Wright gave Studebaker-Packard $10 million for its defense business and $25 million to lease its Utica and Chippewa plants for 12 years. Hurley wouldn’t merge though, agreeing only to manage S-P for three years at cost in exchange for an option on five million shares of stock. That way Hurley could run Studebaker-Packard as he wanted without actually taking a financial stake in the firm. If he saved it he could exercise his stock option, buy the company and use S-P tax credits to offset C-W profits. If Studebaker-Packard failed, his own company would not suffer. It was the sort of deal only a desperate company like Studebaker-Packard would agree to. The company also agreed to distribute Mercedes-Benz cars in North America. Hurley felt having another line to sell would strengthen the retail network.
                              If Studebaker-Packard had been able to use the cash influx to immediately bring out all-new cars, they might have been able to turn things around, but Hurley’s negotiating tactics had wasted a great deal of time. All that 1957 offered was yet another revision of the unsuccessful 1953 cars. The results could have been predicted.
                              The 1957 models were mildly face-lifted, and a four-door station wagon was finally added to the line-up. The Silver Hawk coupe offered either six or eight cylinders while the mighty Golden Hawk hardtop now offered a 275hp supercharged Studebaker V8. The cars were solid values and the styling was decent, but they came about two years too late to do much good. Packard production was transferred to South Bend and stylists cobbled together a 1957 Packard Clipper by applying 1956 Packard styling cues to the Studebaker President. Fewer than 5,000 were sold.
                              Noticing the success of import cars, S-P’s new president Harold Churchill wondered if perhaps a low-price full-size car would attract buyers. In mid-1957 he introduced the Scotsman, a line of Champion-based cars stripped to the basics. They were terribly plain cars, but with prices starting at $1,776, they sold fairly well. Losses, however, continued. For 1957 the company lost $11 million.
                              Model year 1958 brought another facelift of the sadly out-of-date body. Stylists grafted small pods onto the front fenders to fit quad lamps, considered necessary to be contemporary. They came standard on Commander and President, optional on Champion. A stylish new hardtop debuted and the utilitarian Scotsman returned. The company did its best to sell the slightly warmed over cars but it was difficult to compete against competitors’ larger, newer-looking cars. Additionally, buyers’ fears of owning an orphan was a very significant problem.
                              During the first nine months of 1958 sales fell to $92 million, and the company recorded a loss of $22 million. However, hope began to rise during the last quarter. The management agreement with Curtis-Wright was terminated, and Hurley’s stock option was cancelled. A refinancing plan was worked out, with financial institutions agreeing to cancel notes totaling $54.7 million in exchange for 5-percent secured notes totaling $16.5 million and 165,000 shares of $5 convertible preferred stock, par value $100 per share.
                              Churchill had come up with a sharp new car, but it came at a cost. Although the financiers were encouraged by the new product, to protect themselves they had the company pledge virtually all its property and plants as collateral. It was critical that the new car be a success; Studebaker was betting the farm.
                              A Lark and a Prayer
                              The new car had to be based on the existing body. The most the company could afford was new front and rear sheet metal, so Churchill’s choices were few. Since another facelift of the “big” Studebaker would only cause a further drop in sales, he decided to turn his big car into a compact instead. It would be called the Lark.
                              Design work was completed by March 1958. The new Lark featured distinctive styling, a spacious interior and trim exterior dimensions. At 175 inches in length it was 16 inches shorter than the Rambler Six. Body styles included two- and four-door sedans and a two-door wagon, and a good-looking two-door hardtop. Lark sedans and hardtops featured a generous 108.5-inch wheelbase while station wagons rode a 113-inch chassis. Prices ranged from $1,925 for the Deluxe two-door Lark VI to $2,590 for the Lark VIII two-door wagon. Also debuting were the Lark-based three-passenger Utility Sedan, two-door Panel Wagon, and Econ-O-Miler Taxi.
                              Lark’s standard engine was a 90hp, 169.6-cid flathead six, with an optional 259-cid V8 offered in 180hp or 195hp versions. Popular Science called Lark “a fresh idea,” adding: “Sixteen inches shorter than the Rambler, it doesn’t have the Rambler’s big-car appearance ... the Lark looks more like something from Europe.” With the Lark’s introduction the company abandoned the full-size car market.
                              It was an immediate success, and production rapidly increased to meet demand. Many Big Three dealers who wanted to get in on the compact boom became Studebaker franchisees. The company also acquired distribution rights for the Auto Union-DKW line of cars to provide dealers with another product to sell.
                              The Lark brought Studebaker back from the brink. For 1959 sales climbed to 160,826 cars, 10,909 trucks and 10,588 Mercedes-Benz/Auto Union vehicles vs. 62,146 cars, 10,735 trucks and 6,420 Mercedes-Benz units in 1958. A profit of $28,544,388 was reported and with tax-loss carry-forward credits it was all tax-free, making it the largest net profit in the company’s history.
                              One aspect of the 1958 refinancing/restructuring deal was a requirement that Studebaker diversify into other fields to ensure corporate survival if the auto business failed. Because Curtis-Wright failed to go through with a merger, Studebaker still had more than $100 million in tax-loss carry-forwards. Merger and acquisitions specialist A.M. Sonnabend was hired to find suitable companies for Studebaker to acquire. The first were C.T.L. (Cincinnati Testing Laboratories), a specialty plastics company that produced Titan missile nose cones, and Gering Plastics Inc., producer of plastic compounds.
                              Competition increased in 1960 when the Chevrolet Corvair, Ford Falcon, Mercury Comet and Chrysler Valiant debuted, causing many Big Three dealers who signed Studebaker franchises in 1959 to drop them now that their own brands offered compacts. Studebaker expanded the Lark range for 1960 with convertible and four-door station wagon models, and introduced new Champ pick-ups with a stylish cab based on Lark sheet metal. Sales held up initially but orders soon began to drop. Sales totaled 133,984 units, down from 182,323 in 1959. Net profits were only $708,850 and the auto division lost money. The company continued to diversify, with Clarke Floor Machines, D.W. Onan and Gravely Tractors joining the growing Studebaker family.
                              Several board members proposed exiting the car business. Churchill objected and by the end of the year he was replaced as president by Sherwood Egbert, formerly with McCulloch Corporation. Egbert was a hard driver, patrolling offices early morning to late at night, asking questions, ordering changes. He personally spoke with more than 700 Studebaker dealers, soliciting suggestions for improvements. Egbert laid out a four-part plan to restore the company to profitability:
                              1) Continue and expand the acquisitions program.
                              2) Strengthen the automotive division’s competitive position.
                              3) Seek a larger share of military business.
                              4) Create an International Division to sell the company’s broad range of products overseas.
                              For 1961, Lark got a new 112hp Skybolt overhead-valve six and styling changes including a flatter roof and lowered cowl, hood and rear deck. There was a new grille, and Regal and Cruiser models got standard quad headlamps. A Cruiser V8 four-door on the wagon’s 113-inch wheelbase debuted. Cruiser offered abundant interior space, a standard 259-cid V8 and plush interior trim. In March, Chemical Compounds Inc., maker of STP oil treatment, was acquired.
                              Egbert worked to improve the dealer network, replacing weak dealers with stronger ones; 180 new dealers were signed in the last four months of the year, bringing the total to 2,102 dealers. He also established factory retail outlets in big cities where Studebaker-Packard had few dealerships. For 1961 sales fell to 102,932 units and the company suffered an operating loss of $3.1 million. But selling Gering Plastics Division for a net profit of $5.66 million more than offset the loss, so the company showed a net profit of $2.535 million for the year. A turnaround appeared imminent. Car sales began to climb, the acquired divisions were profitable, and in the fourth quarter Studebaker-Packard netted a profit of $12.8 million.

                              Brooks Stevens restyled the Lark for 1962, extending the grille area forward and adding a rich Mercedes-type grille. Longer rear fenders and deck helped increase length by up to 13 inches and all four-door sedans now used the same 113-inch platform as wagons and Cruisers. The sporty Daytona also debuted with standard bucket seats, center console and full carpeting, plus an available four-speed transmission and 225hp, 289-cid V8. Stevens also restyled the Hawk, removing the fins and creating a long, flat roofline to completely change the silhouette and provide more interior room. Called the Gran Turismo Hawk, it was a fast, beautiful tourer.
                              Egbert announced the new Avanti high-performance sports coupe, with stunning looks and room for four. The fiberglass-bodied Avanti bristled with innovation, offering standard front disc brakes, bucket seats, an aircraft-inspired overhead console and a concealed safety roll bar. A supercharged V8 and four-speed transmission were available.
                              In 1962 the company was renamed Studebaker Corporation; directors felt including Packard in the corporate name was harming business. Five additional companies were acquired: home appliance maker Franklin Manufacturing; Trans International Airlines, a contract carrier for the military; Schaefer, manufacturer of commercial frozen food and dairy equipment; Domowatt S.P.A., an Italian appliance maker; and Paxton Products, maker of the Paxton supercharger. Although the auto division was still in the red, the company reported a 1962 profit of $2.56 million, which included an operating profit of $489,000. Production of 99,476 cars and trucks in the United States and Canada was up 8 percent over the 92,434 built the prior year, and Mercedes-Benz sales set a new record with 13,300 cars sold. In November, Studebaker expanded its import base, acquiring Canadian distribution rights for Mercedes-Benz and DKW.

                              The reason the automotive division lost money in 1962 was a strike that shut down production for 38 days, strangling the division’s comeback. With the exception of the strike months January and February, the first nine months of the year saw dramatic increases in car sales.
                              The 1963 Lark got a more contemporary look. Brooks Stevens restyled the greenhouse with thin window frames and a flatter roofline and windshield. Three trim levels were offered initially: Regal, Custom and Daytona. The stripped down Standard series appeared mid-year, with prices starting at just $1,935. The new Wagonaire also debuted, featuring a sliding rear roof section so tall items like refrigerators could be carried upright.

                              Soon, Avanti ran into trouble. First it was production delays that caused impatient buyers to cancel orders; then, once the problems were fixed and cars were readily available, the company found it had overestimated its sales potential. Unsold Avantis began to pile up.
                              Egbert wasn’t ready to quit. High-performance Avanti R-1 and R-2 engines became options to spur Lark and Hawk sales. Andy Granatelli and a team of drivers took a fleet of Studebakers to the Bonneville Salt Flats, setting 72 new USAC records including an incredible 170.8 mph average in an Avanti with Granatelli at the wheel.
                              But with the Big Three introducing new intermediates there simply was too much competition. Studebaker’s 1963 sales fell to 64,570 units, a 17-percent decline and far below breakeven. Although volume of $403 million was up $38 million from the prior year, the automotive division lost so much money – exceeding $25 million – the other divisions’ combined earnings of more than $11 million failed to offset it and the company suffered an operating loss of $16.9 million. One way or another the problem had to be fixed or the company would simply go broke.
                              Egbert envisioned a new line of Avanti II cars, two- and four-door sedans based on the Lark chassis with styling inspired by the Avanti coupe. But by then several board members advocated liquidating the auto division and Egbert was unable to continue fighting. The company president had cancer and in November 1963 the board put him on indefinite leave, appointing finance VP Byers Burlingame to take his place.
                              The banks refused to lend any more money to the auto division unless the corporation agreed to put up its acquired divisions as collateral. The board was unwilling to risk the stockholder’s investment, forcing the auto division to pay its own way. Lacking the money to produce the Avanti II or a new Lark proposed by Stevens, all that could be done was another facelift of the existing car. On a shoestring budget Stevens managed to make the 1964 Larks appear almost all-new. If they sold well the division could continue; if not, Studebaker’s life as automaker was effectively over.
                              The GT Hawk and Avanti received only minor updating for 1964 but the Larks featured completely new frontal styling. Three series were offered in six-cylinder and V8 models: Challenger, Commander and Daytona, plus a V8 Cruiser. Unfortunately, within weeks it was clear the new cars weren’t selling. There was an 86-day supply in dealers’ hands and 3,000 1963 models remained unshipped; production halted for a week to reduce inventories.
                              By December 1963 the company was bleeding to death. On Dec. 7, the board reached a decision to shut down Studebaker’s South Bend plant and transfer all car production to the company’s plant in Hamilton, Ontario. Burlingame explained: “The basic difficulty in South Bend was insufficient volume of sales. Our facilities there were such that there was no way to reduce our costs so that a profit could be made upon such volume. The Canadian plant ... can be operated at a profit on much lower volume. Therefore we have decided to live with the sales we have rather than to continue to hope they will improve.”
                              The company took a special charge of $64 million to cover anticipated losses on disposal of plants, property, tools and inventory, bringing the total loss for 1963 to more than $80 million. By year’s end Studebaker’s net worth had shrunk to $36.7 million.
                              Hamilton could produce upwards of 36,000 cars annually. Although breakeven was once 7,000 cars, after South Bend closed the plant carried the overhead for the entire sales division, raising breakeven to more than 20,000 units. Hamilton’s workforce was increased from 700 to 1,100 people. To streamline production the Hawk, Challenger, Avanti and trucks were all dropped.
                              Studebaker sold its U.S. foundry, body, engine and final assembly plants and several other buildings for $13 million, which was applied to debt reduction. Its military truck plant was sold to Kaiser Jeep Corporation.
                              With South Bend’s closure, retail sales collapsed, declining to 35,373 in the United States and Canada for 1964, versus 73,277 the prior year. Most were cars produced in South Bend before the end of 1963. However, although sales fell to $261 million, plummeting more than $140 million, Studebaker earned $8 million, its first significant profit since 1959. Management investigated importing a low-priced foreign car for its dealers to sell; one possibility was Toyota, a virtually unknown brand.
                              Studebaker’s 325 Canadian dealers had retailed 7,658 cars in 1964 while the 1,700 U.S. dealers sold 27,715. Exceeding the 20,000-car breakeven in 1965 now seemed a reasonable expectation. Because South Bend no longer produced engines, the company had to find another source. McKinnon Industries of St. Catherine’s, Ontario, a GM subsidiary, agreed to supply Chevy six and V8 engines. Production of the 1965 cars began in August 1964 with introduction scheduled for October. With no styling changes to speak of, the company boasted its cars offered the most standard equipment in their class. The line-up included 10 models: Commander two- and four-door sedans and a wagon, plus a Cruiser four-door, all offering six-cylinder or V8 engines. The Daytona (V8 only) offered a two-door Sport sedan and a four-door wagon; no convertibles or hardtops were offered. In all, just 19,435 1965 Studebakers were built. The company reported total sales of $192 million, down $69 million from prior year, but earned a $10.7 million profit. That February the Mercedes-Benz distribution rights were sold to Daimler-Benz.
                              Trade rules allowed home market producers to import cars into Canada duty-free, so auto division president Gordon Grundy tried to increase income by making a deal with Volkswagen to import VWs and sell them to Volkswagen Canada for a slightly lower price, with Studebaker earning a $150 profit on each. His attempts to get distribution rights to Toyota or Datsun cars came to nothing.
                              For 1966 a Dearborn, Mich., design firm, Marcks, Hazelquist and Powers (MHP), was hired to restyle the cars. Bob Marcks, a talented ex-Loewy designer, freshened up the frontal appearance with a handsome new grille, dual headlamps to replace the quads, and lower bodyside moldings. To upgrade the car’s image Marcks specified rich interior fabrics and elegant colors and trim of the type usually seen in luxury cars. The line-up included Commander two and four-door sedans, a Wagonaire, Daytona two-door sedan and Cruiser four-door, each offering six or V8 power. Prices began as low as $2,060.
                              As good-looking as the new cars were, management decided to close out the business. On March 4 they announced that production would end the following day. Only 2,045 cars had been produced during calendar 1966, an annual rate equal to just 12,000 units per year. Management said the auto division closure was due to “heavy and irreversible losses,” though Grundy claimed his division was operating profitably at the time. Facts tend to support management’s statement: Although the breakeven point was 20,000 units (about 10 cars per year for each of Studebaker’s 2,000 U.S. and Canadian dealers) sales didn’t reach that in 1965, and the production rate in early 1966 was running well below 20,000 cars annually.
                              Meanwhile, MHP had nearly completed designing the 1967 Studebakers, with minor changes that greatly improved the styling. Using a 1966 car MHP mocked-up a 1967 model, with thick side moldings and a rear bumper raised to just below the decklid for a sleeker look. A new grille featured two panels inside a larger rectangle. The handsome styling compared well with competitors.
                              Marcks also created proposals for designs to carry Studebaker to 1970 and beyond. A complete redesign was out of the question, so MHP focused on restyling the existing car. One concept was a sedan with Hawk styling themes; another featured a sloping hood and twin grilles like the 1953 models. A gold four-door sedan represented what Studebaker might look like in 1970.
                              Naturally, the corporation continued on despite the car division shutdown. Management considered the remaining divisions a foundation to grow on. The company became America’s largest producer of tire studs for snow tires, and acquired Big Four Industries, maker of tire-studding guns and tire-changing equipment.
                              Sales dropped again in 1966, to $172 million but net income rose to $16.4 million. Other companies became interested in Studebaker; its remaining tax-loss carry-forwards making it a good prospect for merger. The company held talks with Wagner Electric Corporation, meanwhile selling two under-performing divisions, Cincinnati Testing Laboratories and Franklin Appliance, which by then were barely profitable.
                              Studebaker, Wagner Electric and Worthington Industries came together in 1967 to form Studebaker-Worthington Inc. It brought together Studebaker’s profitable divisions: Clarke Floor Machines, Gravely Tractors, Schaefer, Chemical Compounds (which eventually was renamed STP Corp.) and Onan, with Wagner Electric’s automotive electrical and brake businesses and Worthington’s diverse holdings in construction equipment, valve and power-generation businesses. The new corporation’s annual sales revenue for 1967 exceeded $650 million.
                              In 1973 – the 10th anniversary of South Bend’s closing – Studebaker-Worthington sales exceeded $1 billion. Onan sales alone were more than $100 million, STP sales were $87 million, Clarke-Gravely $58 million and Schaeffer just under $10 million. If Studebaker had remained independent it would have had annual sales of well over $250 million.
                              Studebaker-Worthington was acquired by McGraw-Edison in 1979, and a few years afterward McGraw-Edison was absorbed by Cooper Industries. With no attachment to any particular product the Studebaker name faded away. But it had long ceased to be the same company. Its old slogan “Always Give The Customer More Than You Promise” was out of date. Studebaker-Worthington had become a conglomerate that boasted mainly about how much money it made.
                              Farewell, Studebaker. Although it’s sad to lose so great an automaker, you left behind a heritage of great cars and trucks, a rich legacy that can never fade away.
                              Read more about Studebaker’s Final Days | Volume 48 Number 1
                              Life isn't about how to survive the storm, but how to dance in the rain !