Who bought who ?

[Aussie Hawk]

I was always under the impression that Studebaker purchased Packard, but the article in the link below says otherwise ?

http://oldcarandtruckpictures.com/Packard/1950.html

[StudeRich]

I am surprized that you never heard that the Books showed The Packard Motor Co. had the superior Cash Accounts of the Two at the time. Even though Studebaker was the larger, more assets, Mfg. of a wider variety of Cars, trucks and Military contracts than Packard, their fortunes of 1947 to 1951 were gone by 1954.

They also were NOT 100% up front with their failing Financial Position to the Packard Exec's.

I think because Studebaker prevailed and survived the Merger, the rumor seemed logical that THEY bought Packard.

[avantilover]

There is a section in the Beverly Rae Kimes book on Packard that explains what happens - in fact it follows the fortunes of the Studebaker Corporation until the early 1970s I thnk as I no longer have the book. Basically, Packard thought they could make lots of Studebakers and increase profits due to Studebaker's range, alas, Studebaker's break even point was something like 172,000 cars a year, a fact Packard didn't discover until after the purchase but stayed the course anyhow, they couldn't survive on their own anyway.

Packard desire to purchase and Studebaker desire to sell all the assets of Studebaker Corporation, and so it was - the rest we know.

[Skip Lackie]

The Studebaker-Packard Corporation was born upon the “consumation of the purchase by Packard Motor Car Company of the business and assets of The Studebaker Corporation on October 1, 1954”. Portion in quotes from the 1954 S-P Annual Report.

[Deaf Mute]

Isn't EVERYTHING I read on the internet 100% true and honest????

[kmac530]

It is in this case DM.

[556063]

Look at the end results of the Merger. Who disappeared first? Who was in control of the events after the Merger? It's been talked about on here before, but a brief rundown goes like this:

Packard was still slightly profitable in 1954 when events leading to the merger unfolded. They did have a better balance sheet that Studebaker. But, they were not well financed enough to face the death blow they had just received from a move by one of the "Big Three".

These were the main forces behind the merger. Packard, like most other luxury car firms of the early 20th Century, depended on outside body firms to build bodies for them. Through the attrition and consolidation of firms during the Depression and WWII, Packard had become almost totally dependent on the Briggs Body Company by the early 1950's to supply their bodies. In 1953, Chrysler bought Briggs. When this happened, I think in 1953, Chrysler sent notice to Packard they would be cut off from their body supplier after 1956.

Packard considered building their own body plant. But, they didn't have that many resources. Unable construct a way out of this problem themselves, investment bankers saw Packard, which now had no way to get bodies, and Studebaker, who was losing market share and had more body building capacity than they could utilize. The handlers of the merger, nervous because of Studebaker's growing reputation for red ink, did everything they could to portray that profitable Packard was in the driver's seat. Studebaker's volume and production ability, along with the fact they actually on paper bought Packard, insured Studebaker's interests were served first in the merged firm, and by 1962 the Packard name was dropped from the official name of the company.

So, for all practical purposes, Studebaker bought Packard. If you were watching media events of the time, you probably had a different impression.

Mergers are usually not like successful marriages. One partner most always ends up becoming totally dominant over the other. Studebaker ended up overshadowing Packard in the merger on almost every measure. The success of the merged company depended on keeping Studebaker humming, and Packard's low volume meant neither firm got much from the deal.