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Thread: Studebaker's growing pricing problem in the 1950s

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    Golden Hawk Member BobPalma's Avatar
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    Studebaker's growing pricing problem in the 1950s

    For some odd reason, Buick's 1952 Super Riviera hardtop has always reminded me of what was becoming Studebaker's competitive pricing problem as the 1950s wore on and sales sank.

    Here is a current 1952 Buick Super Riviera 2-door hardtop for sale:

    https://classiccars.com/listings/vie...shington-98119

    When that Buick was new, it had a MSRP of $2,671 with automatic transmission.

    By contrast, the MSRP on a new 1952 Studebaker Commander State Starliner 2-door hardtop with automatic transmisison was $2,731;$60 morethan the nearly top-of-the-line Buick!

    Gulp. Sadly, many customers decided they'd rather have a Buick than a Studebaker, too; sales were 55,400 Buick Super hardtops to 14,548 Commander Starliners.

    This was an uphill battle, given Economies of Scale. 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.

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    Yes, economy of scale was one problem, but also antiquated facilities and a management which gave too much in the WWII and post-WWI contract negotiations and then wouldn't engage and lead workers. Studebaker wasn't alone in these failings, but they were too small to survive the failings.

    jack vines
    PackardV8

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    President Member Michidan's Avatar
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    Really nice Buick. Studebaker even offered that near exact color combination on the Starliner.

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    Golden Hawk Member StudeRich's Avatar
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    Thumbs down

    BUT! A '52 Buick would be an Old, antiquated OHV Straight Eight! VS a New Tech. OHV 232 V8, with 120 right NOW H.P. not 3 Minutes later!

    Not to mention a REAL 3 Speed Automatic Transmission, not a Slug!

    If the Marketing did not Pump those differences up, that would be another place they failed.
    StudeRich
    Second Generation Stude Driver,
    Proud '54 Starliner Owner




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    Economies of scale in other ways, too. Buick offered a full line of hardtops, sedans, wagons and convertibles in three series (not all models available in all series). Many of the parts were interchangeable between series and even other makes (Olds, Cad), which allowed them to further amortize their costs over many vehicles.

    My parents had a 52 Buick Roadmaster convertible in exactly that color. My father had always wanted a convertible, but went to the Buick dealer to buy another Special 4-door like the 50 we already had. But the dealer had this leftover Roadmaster convertible that had been used as a demo and had only a few thousand miles on it. the 1953 models were out with the new V8 (except the Special), and all of a sudden, straight 8s were passe. When the price dropped below the cost of a new Special 4-door sedan, my mother relented and my father brought it home. I never got to drive it (too young), but I remember it as a gorgeous and comfortable car. It was my first exposure to power windows and power seat, too.

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    Silver Hawk Member Milaca's Avatar
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    Looking back, what could Studebaker have done in 1952 to improve their finances? Focus more attention to their farm and commercial truck business? Offer their V8 in the trucks which would have offered more power than their Ford, GM and Dodge counterparts?
    Or perhaps offered a small sports car with the V8 being that there was a growing market for such a car?
    Any other ideas?

    In the middle of MinneSTUDEa.

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    Quote Originally Posted by Milaca View Post
    Looking back, what could Studebaker have done in 1952 to improve their finances? Focus more attention to their farm and commercial truck business? Offer their V8 in the trucks which would have offered more power than their Ford, GM and Dodge counterparts?
    Or perhaps offered a small sports car with the V8 being that there was a growing market for such a car?
    Any other ideas?
    Reduce their hourly employee's labor rate to that of the rest of the industry, or lower.
    Gary L.
    Wappinger, NY

    SDC member since 1968
    Studebaker enthusiast much longer

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    President Member StudeNewby's Avatar
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    I know Studebaker had come out of receivership by WW2, but what was their financial status after the war? Did they come out with some money in the bank? I'm guessing the answer is yes. If so, that would have been the time to invest in updating the aging facilities, instead of paying exorbitant wages and fat dividends to investors.
    Mike Davis
    Regional Manager, North Carolina
    1964 Champ 8E7-122 "Stuey"

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    Speedster Member
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    If Studebaker had reduced its prices to be competitive they would probably have lost money on each car, but they would have made it up on volume.

    I know, I know, this is an old joke.
    -Dwight
    Last edited by Dwight FitzSimons; 08-16-2019 at 11:44 AM.

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    Golden Hawk Member 8E45E's Avatar
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    Quote Originally Posted by Dwight FitzSimons View Post
    If Studebaker had reduced its prices to be competitive they would probably have lost money on each car, but they would have made it up on volume.
    That factor kept them from bringing a four door hardtop to market: https://forum.studebakerdriversclub....-Feb-s-already!

    The hardtop would never even have come close to the sales volume of the humble four door sedan.

    Craig

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    Quote Originally Posted by Milaca View Post
    Looking back, what could Studebaker have done in 1952 to improve their finances? Focus more attention to their farm and commercial truck business? Offer their V8 in the trucks which would have offered more power than their Ford, GM and Dodge counterparts?
    Or perhaps offered a small sports car with the V8 being that there was a growing market for such a car?
    Any other ideas?
    Strengthening their Dealer organization would have helped a lot as well.

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    Golden Hawk Member BobPalma's Avatar
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    Quote Originally Posted by Dwight FitzSimons View Post
    If Studebaker had reduced its prices to be competitive they would probably have lost money on each car, but they would have made it up on volume. Dwight
    I hope you're kidding, Dwight. If a company loses money on every car, they're still gonna be in the hole at the end of the year because no matter how great the volume, they lost money on every one!

    That theory might work on halo cars like Avantis or Caribbeans or early Thunderbirds, but the bread-and-butter lines had better be making enough money to cover the cost of the halo cars and turn an additional profit in and of themselves. 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.

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    Golden Hawk Member 8E45E's Avatar
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    Quote Originally Posted by BobPalma View Post
    I hope you're kidding, Dwight. If a company loses money on every car, they're still gonna be in the hole at the end of the year because no matter how great the volume, they lost money on every one!
    Like GM in 2009? They made something like 4 million more cars in 2009 than they did in 1962, one of the most profitable years.

    Craig
    Last edited by 8E45E; 08-16-2019 at 01:06 PM.

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    Golden Hawk Member BobPalma's Avatar
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    Quote Originally Posted by 8E45E View Post
    Like GM in 2009? The made something like 4 million more cars in 2009 than they did in 1962, one of the most profitable years. Craig
    BINGO! BP
    We've got to quit saying, "How stupid can you be?" Too many people are taking it as a challenge.

    Ayn Rand:
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    G. K. Chesterton: This triangle of truisms, of father, mother, and child, cannot be destroyed; it can only destroy those civilizations which disregard it.

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    Quote Originally Posted by 8E45E View Post
    Like GM in 2009? The made something like 4 million more cars in 2009 than they did in 1962, one of the most profitable years.

    Craig
    If I remember correctly GM was selling more cars than anyone else in the world, but still losing money! Something wrong there. The main problem apparently was that they had too many makes; They were competing with themselves. Labor costs were too high, too.
    -Dwight

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    I remember one of my first business trips to Detroit & driving around the city & seeing all of those plants.....I kept thinking it's a miracle cars don't cost twice as much as they do.....

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    We have the benefit of the ability to be retrospective. We know that no independent has survived, and there is reasonable doubt as to the health of some of the Big Three. Studebaker was faced with the fact that post war pent up demand for new cars had waned. They now had to come to grips with the reality that they were trying to sell and economy car for the same price GM was selling an upscale luxury model Buick. We are talking about apples and oranges. When Studebaker needed to compete with Chevrolet, and maybe Pontiac, we are jumping over Oldsmobile and comparing the price with and entry level Buick. I don't care how much the fuel savings might have been, over the life of it's competitors, it would never overcome the initial price difference. Studebaker was destined to fail, it just lasted longer then most of the independents.

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    Golden Hawk Member BobPalma's Avatar
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    Quote Originally Posted by Hallabutt View Post
    We have the benefit of the ability to be retrospective. We know that no independent has survived, and there is reasonable doubt as to the health of some of the Big Three. Studebaker was faced with the fact that post war pent up demand for new cars had waned. They now had to come to grips with the reality that they were trying to sell and economy car for the same price GM was selling an upscale luxury model Buick. We are talking about apples and oranges. When Studebaker needed to compete with Chevrolet, and maybe Pontiac, we are jumping over Oldsmobile and comparing the price with and entry level Buick. I don't care how much the fuel savings might have been, over the life of it's competitors, it would never overcome the initial price difference. Studebaker was destined to fail, it just lasted longer then most of the independents.
    There were two factors that kept Studebaker alive into the 1960s, Bill: They had a good V8 engine at the right time and they had a good truck line at the right time. Without either (or both, in reality), they might not have survived as long as they did. 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.

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    Golden Hawk Member StudeRich's Avatar
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    Quote Originally Posted by BobPalma View Post
    There were two factors that kept Studebaker alive into the 1960s, Bill: They had a good V8 engine at the right time and they had a good truck line at the right time. Without either (or both, in reality), they might not have survived as long as they did. BP
    AND, do not forget the "Studebaker Savior", the 1959 Lark!

    Hawaaian Green Hardtop2.jpg 59 Stude Yard.jpg Churchill's Dream come True!
    Last edited by StudeRich; 08-16-2019 at 03:02 PM.
    StudeRich
    Second Generation Stude Driver,
    Proud '54 Starliner Owner




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    Golden Hawk Member BobPalma's Avatar
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    Quote Originally Posted by StudeRich View Post
    AND, do not forget the "Studebaker Savior", the 1959 Lark!

    Hawaaian Green Hardtop2.jpg 59 Stude Yard.jpg Churchill's Dream come True!
    True, Rich, but they had to get to 1959 in the first place...which Hudson, Nash, Willys, Kaiser, Packard, etc., etc. did not do! 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.

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    Interesting thoughts in this thread. In 1952, Studebaker was using the 1947 body in two facelifts. Buick in 1947 had a new body in 1949 with other facelifts as well as the rest of the GM line. GM, Ford, Chrysler all had nice military contracts but Studebaker lost the jet contract in 1952 as well as Packard lost there military contracts around the same time. 1953 should have been the turn around year with the bright new styling, but as Bob Palma pointed out to me some time ago, quality control was lacking when the 53's came out. 1955 Packard should have been a winner, but QC was a problem as well.

    Back to 1952: Styling sold and the sales pitch was longer, lower, wider. All the GM car had some version of the "dollar grin" for the grille with lots of flash. Studebaker offered solid value to it's loyal customers but everybody else was seduced by siren song of flashy styling. People that were new Studebaker owners in 1947 to 1950 did not return except for the loyal group that always bought a new Studebaker when the time came for a new car. The 1952 sales figures were lower than 1951, but that was the last year of the 1950's were that high for Studebaker. As I recall, 1952 was around 182,000 next after 1952 was 1959 at around 128,000. 1952 was the brink of the famous Ford Chevy Blitz of 1953-1954.

    Studebaker dealers probably could not stand up to that and offer price that GM and Ford did. I remember a story that here in Tucson when the Lark came out, someone took their 1957 Pontiac StarChief Hardtop into the local dealer and asked how much he could get for it on a new Lark Hardtop. Dealer told him $700.00.

    Bob Miles
    Pacific Southwest Zone Coordinator
    Last edited by 6hk71400; 08-16-2019 at 03:17 PM. Reason: corrections

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    Golden Hawk Member 8E45E's Avatar
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    Quote Originally Posted by BobPalma View Post
    True, Rich, but they had to get to 1959 in the first place...which Hudson, Nash, Willys, Kaiser, Packard, etc., etc. did not do! BP
    Two of them, the Kaiser and the Willys both had a rather successful second life in South America. The Willys was made in Brazil, where it was updated by Brooks Stevens, and the Kaiser Manhattan, which was renamed 'Carabela' was made in Argentina.

    Craig

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    Indeed they did.
    JimsLeadCommander

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    Quote Originally Posted by StudeRich View Post
    BUT! A '52 Buick would be an Old, antiquated OHV Straight Eight! VS a New Tech. OHV 232 V8, with 120 right NOW H.P. not 3 Minutes later!

    Not to mention a REAL 3 Speed Automatic Transmission, not a 2 speed Slug!

    If the Marketing dept. did not Pump those differences up, that would be another place they failed.
    "Longer, Lower, Wider, Boulevard Ride, Room for Six in Comfort." GM & Buick were savy with their advertising. Comfort over 'power' seemed to win the day with many buyers.
    JimsLeadCommander

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    I seem to recall that SP lost their military division to Curtis-Wright as part of the management deal when Curtis-wright managed SP for a number of years, then reneged on a promise to invest in SP.

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    Regardless of all the above, its obvious now that Studebaker and Packard should have done more financial analysis prior to (and after) the Packard purchase, (including the unions) to map out the way to a successful future, plant rejuvenation and vehicle modernization. But, as we know, the ultimate savior if the Corporation was the diversification into Clarke, Gravely etc, good profitmakers.

    Maybe the best thing to emerge was the advent of SDC and the support of many vendors to keep these vehicles on the road.

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    Quote Originally Posted by JimsLeadCommander View Post
    "Longer, Lower, Wider, Boulevard Ride, Room for Six in Comfort." GM & Buick were savy with their advertising. Comfort over 'power' seemed to win the day with many buyers.
    I don't disagree, but those big Packard and Buick straight 8s would roll along quietly all day long at 75 mph. A lot of people liked that comfort more than they cared about quick acceleration and stayed loyal to those brands.

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    Quote Originally Posted by Milaca View Post
    Looking back, what could Studebaker have done in 1952 to improve their finances? Focus more attention to their farm and commercial truck business? Offer their V8 in the trucks which would have offered more power than their Ford, GM and Dodge counterparts?
    Or perhaps offered a small sports car with the V8 being that there was a growing market for such a car?
    Any other ideas?
    Business school 101----you can increase profitability by decreasing expenses and or increasing sales. Studebaker management could do neither.
    ed ellis



    the "SUPER COUPE"

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