Why Studebaker Failed

Why Studebaker Failed

Why did Stude­bak­er go out of busi­ness? I have your book Stude­bak­er 1946-1966 orig­i­nal­ly pub­lished as Stude­bak­er: The Post­war Years. As an employ­ee of the old com­pa­ny at the end in Hamil­ton, Ontario,  it brought back mem­o­ries of many old Stude­bak­er hands: styl­ists Bob Doehler and Bob Andrews were good friends about my age.

I am look­ing for­ward to the last chap­ter dis­cussing how Stude­bak­er went wrong, espe­cial­ly since I also have the­o­ries. It would fun to com­pare notes. I am on a pan­el in Phoenix/Glendale next June and made a Pow­er­Point pre­sen­ta­tion to the Avan­ti Club in 2006. My grand finali was your a quote from your book: “For many years, Ray­mond Loewy Asso­ciates would be the only thing stand­ing between Stude­bak­er and dull medi­oc­rity.”

P.S. Like you I  owned a 1962 Gran Tur­is­mo Hawk, a sur­pris­ing­ly impres­sive car. I drove it back and forth to Hamil­ton when we were work­ing on the last 1966 pro­duc­tion Stude­bak­ers. I put a ’53 Star­lin­er deck­lid on it and ’54 Star­lin­er wheel cov­ers; I thought each addi­tion was an improve­ment. —B.M., via email

1962 Gran Tur­is­mo Hawk: Brooks Stevens’ ulti­mate facelift of the great Stude­bak­er hard­tops and coupes, it could be traced back to the 1953 Star­lin­er.

Thanks for the kind words. My GT Hawk was one of the best cars I ever owned: fast yet easy on gas, styl­ish, fun to dri­ve. It leaked oil and the famous “flex­i­ble frame” was a lit­tle creaky, but it was a sat­is­fy­ing car, if over­ly sus­cep­ti­ble to the dread­ed tin­worm.

At the end of my book is a list of what Stude­bak­er did wrong, beginin­ning with chair­man Paul Hoff­man accept­ing every union demand after World War II. James Nance, the last pres­i­dent of Packard, who pur­chased Stude­bak­er in 1954, told me: “The trou­ble with Stude­bak­er was that they wouldn’t take a strike. Every­body else took strikes after the war and rea­son­able com­pro­mis­es were reached on wages and ben­e­fits. Stude­bak­er didn’t, and they nev­er caught up.”

What Nance and Packard didn’t know when they bought Studebaker—but learned to their hor­ror when Packard’s accoun­tants final­ly got into the books—was that Studebaker’s break-even point by the mid-Fifties was 50,000 or more cars high­er than their vol­ume in their best year on record. A Stude­bak­er design­er told me he once priced the 1953 Star­lin­er using Gen­er­al Motors costings—and found that GM could have sold the iden­ti­cal car for $300 less (which was a lot more then than it is now).

Stude­bak­er proved the alba­tross that dragged Packard down with it, mak­ing it impos­si­ble for Nance to find the finances to bankroll the high­ly com­pet­i­tive all-new 1957 line that might have allowed Stude­bak­er-Packard to go on longer than it did.

1953 Stude­bak­er Star­lin­er: Designed main­ly by Bob Bourke, it was prob­a­bly the sin­gle most out­stand­ing Amer­i­can auto design of the Fifties, a trib­ute to Ray­mond Loewy’s vision and eye for tal­ent. (raymondloewy.org)

And yes, Ray­mond Loewy, for  all his pos­ing as the actu­al  cre­ator of styling tri­umphs like the 1953 Star­lin­er and 1963 Avan­ti, was the key to the cars being as disct­inc­tive as they were. He had an eye for tal­ent and hired and direct­ed fine design­ers, such as Bob Bourke (Star­lin­er) and Bob Andrews, John Epstein and Tom Kel­logg (Avan­ti).

Studebaker’s sales and mar­ket­ing peo­ple blunt­ed those good designs by inept plan­ning and pro­mo­tion. In 1953, for exam­ple, they built a sur­feit of sedan mod­els, find­ing to their shock that peo­ple main­ly want­ed the beau­ti­ful Star­lin­er hard­tops and Starlight coupes. Their pro­duc­tion mix was the exact oppo­site of what the pub­lic desired.

1964 Lark Wag­o­naire: Brooks Stevens had the clever idea for a slid­ing rear roof, enabling bulky items to be hauled eas­i­ly. (autoweek.com)

But Studebaker’s styling was con­sis­tent­ly good. Try­ing to save the rump com­pa­ny in the Six­ties, Pres­i­dent Sher­wood Egbert hired Brooks Stevens, who deft­ly facelift­ed the Lark and Hawk, and came up with nov­el ideas like the slid­ing-roof Wag­o­naire sta­tion wagon—but these were all reskins of the 1950s mod­els. Stevens and Loewy then offered  excit­ing ideas for all-new designs for 1966 and beyond, but by then it was too late. Stude­bak­er shut down its main fac­to­ry in South Bend, Indi­ana, in Decem­ber 1963, and the Hamil­ton Ontario plant closed after build­ing the last 1965-66 mod­els. But no—Studebaker didn’t have to fail.

Ray­mond Loewy, Sher­wood Egbert and the 1963 Stude­bak­er Avan­ti: basis for Loewy’s new-gen­er­a­tion Stude­bak­er pro­pos­als for 1964 and beyond.

3 thoughts on “Why Studebaker Failed

  1. The engi­neers would dis­agree. Stude­bak­er devel­oped the industry’s first mod­ern ohv small­block V8 in 1951 and, work­ing with Borg Warn­er, a fine auto­mat­ic. 1953 styling was mag­nif­i­cent. It was man­age­ment which muffed the oppor­tu­ni­ty by pro­duc­ing the wrong pro­por­tion of coupes to sedans. Even then, labor costs were so high the coupe cost $300 more than GM could have built it for. The VW approach wasn’t seri­ous. When Packard bought Stude in 1954 they found over­head so high they’d need a quar­ter mil­lion cars to break even. Cur­tiss Wright were oppor­tunists, yes, but they didn’t come along until 1958, when the dam­age was already done. Fail­ing to get over­head under con­trol after the war falls not on the unions. It falls on man­age­ment. Fail­ure always does.

  2. Unions were the small­est prob­lem. In 1949 the board of direc­tors wouldn’t pony up mon­ey for invest­ment in new engi­neer­ing. VW was told to take a hike. Cur­tiss Wright were noth­ing but vul­tures.

  3. I enjoyed read­ing this arti­cle about Studebaker’s fall. My broth­er owned a 1962 Lark, for which he criss­crossed the coun­try in, I had great times rid­ing to the lake and beach here in South Flori­da. My mom drove a 1957 Hawk, sho loved the car. It tears at my soul to view ghost­ly pic­tures of the old plant in South Bend. My Aunt’s Jen­ny and Martha lied in Micha­gan City, Ind and we used to dri­ve to South Bend to look at the plant. I reme­ber my Uncle Her­shal say­ing “Us folks in Flori­da pay more for a car than those union work­ers do, but we don’t earn their wages.” After read­ing the demise of how UAW played a role, it sad­dens me even more. I hon­est­ly believe had Stude­bak­er sur­vived they would have been years ahead of the big 3 in build­ing com­pact cars. Thank you for such a well writ­ten sto­ry of a great Amer­i­can car builder.

Leave a Reply

Your email address will not be published. Required fields are marked *