Interesting Read re: Packard Studebaker Merger

[DEEPNHOCK]

Interesting Packard Studebaker Merge comments...
http://www.vicsocotra.com/wordpress/2014/07/page/2/

(snippet copy - see link for entire article)


My Pal Tom collects Packards, and is as hard core a car person as you get. He commented on the merger and acquisition strategy among the pre-war legacy carmakers in the go-go 1950s:

[Chris Pile]

Interesting stuff, Jeff. Thanks for posting.

[64V-K7]

Interesting, to say the least. Times Square was a hangout of mine around 1959-60 and one day I ran into the demonstration of that Air-Car. Big machine compared to the size of vehicles those days... They didn't think of cleaning the streets beforehand and what was remembered most, is the exhaust ports blowing all the crap from the gutters up into the crowds....

[wlfrench]

What I don't understand is if Packard bought out Studebaker why is it that Packard disappeared and not Studebaker?

[Skip Lackie]

What I don't understand is if Packard bought out Studebaker why is it that Packard disappeared and not Studebaker?

Once they "merged" (in 1954) there was a single corporate entity that had no particular loyalty to one brand over the other -- they just wanted to stay in business. Both Stude and Packard lost money in 1955-56, and the company seriously considered getting out of the car business then. But they gambled one more time and designed the 59 Lark, introduced in fall 1958 -- and succeeded, at least for a couple of years. In the meantime, they consolidated production in South Bend, closed the Packard foundry in Detroit, and dropped the Packard brand name after the 1958 models. There were many other corporate and financial things going on at the same time, and several books have been written about the causes of the demise of Packard and Studebaker. It cannot be summarized adequately here.

[Mikado282]

It is really too bad that alpha males egos get in the way of practical decisions, but this is always the the way the world has operated from the dawn of mankind and is still operating today. A four way merger consisting of Studebaker, Packard, Hudson and Nash would have had it greatest value in the '48-51 time frame when they were all relatively healthy. Another interesting what if is them absorbing Kaiser and Willys also a few years later. AMC later got Jeep and it was a money maker for them and is still around today. The merger of all four could of have made a smaller but competitive company against GM. Low priced auto divisions to the luxury market just like GM with Packard going against Cadillac on the high end. Packard still had value in it's name at the time. Plus a full line truck division, appliance division, Studebaker's portfolio of of non Studebaker specific automotive products plus non automotive products and military contracts in the corporate mix. Would have they survived, we will never know. But their chances would have been a lot better IMO. As it played out half of the merger proposal, AMC lasted over 20 years longer than the other S-P.

[ddub]

According to production figures on Wikipedia, the 4 independents out produced Ford in 1948 by about 16,000. If they had merged at that time it would have taken a lot of changes to merge production. A lot of consolidation and plant closings. But with the right leadership it might have succeeded. But if it had, the Studes we love would have likely been very different.

[56H-Y6]

Hi

The 1954 "merger" was structured as a buyout of Studebaker by Packard with a complicated stock swap, without agreement that the control of either being consolidated in one management. Both continued to operate separately to the point that both proving grounds stayed in operation along with all other aspects. One of the benefits of consolidation was duplication of operations would be reduced which wasn't accomplished.

By early 1956, with working capital rapidly becoming depleted abetted by sagging Studebaker sales and Packard-Clipper sales tanking for various reasons, including myriad problems with the latter's 1955 models, total corporate collapse was a very real possibility. After financing for the badly-needed all-new 1957's was turned down by the banks and insurance companies, Nance worked every avenue available to find a savior: mergers with other corporations both automotive and non-automotive; none came through. The only prospect for help was defense contractor Curtiss-Wright, and a reluctant one at that but not for a merger. C-W had major DoD contracts then and were only enticed and arm-twisted into the "Joint Management Agreement" with the plum of S-P defense work and facilities that became Utica-Bend, in exchange for management advice and operating capital.

Recall that 1956 was an election year and a major corporate collapse and attendant unemployment news would not be helpful to Eisenhower's re-election. The C-W mandate was to stem the losses while salvaging some auto-making operations. Of the two, Studebaker had the better prospects of sufficient volume to meet that objective, however many problems still remained. Packard, as much as enthusiast now hate to admit it, was in badly damaged state both in its facilities, dealer organization and management. To Nance's credit, he did shepherd the last Detroit models to become some of the most interesting and attractive in its last decade. The still-born 1957's would have been even more so, as recent research is now revealing.

There are a number of well-researched and well-written histories available to those interested in gaining a complete understanding of what happened in that unfortunate period in their corporate histories.

Steve

[r1lark]

Wasn't the "Air-Car" was much more of a Curtis-Wright defense initiative versus a Studebaker-Packard transportation vehicle? And was well after Nance left the corporation.

Did some googling:
http://www.roadandtrack.com/car-cult...ight-air-cars/
http://jalopnik.com/the-legend-of-fo...nked-476411174