Why Studebaker Failed: In the End, It is Always Management

Why Studebaker Failed: In the End, It is Always Management

StudebakerWhy did Stude­bak­er go out of busi­ness? I have your book Stude­bak­er 1946-1966, orig­i­nal­ly pub­lished as Stude­bak­er: The Post­war Years. I worked for the old com­pa­ny at the end in Hamil­ton, Ontario. Your book 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 often quote from your book: “For many years, Ray­mond Loewy Asso­ciates would be the only thing stand­ing between Stude­bak­er and dull mediocrity.”

Like you I owned a 1962 Gran Tur­is­mo Hawk, a sur­pris­ing­ly impres­sive car. 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.

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

Studebaker remembered

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, begin­ning with chair­man Paul Hoff­man accept­ing every union demand after World War II. James Nance, the last pres­i­dent of Packard, which pur­chased Stude­bak­er in 1954, had it right. “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 Packard didn’t know when they bought Stude­bak­er they learned to their hor­ror when accoun­tants final­ly got into the books. Studebaker’s break-even point by the mid-Fifties was 50,000 or more cars high­er than their best-ever annu­al vol­ume. A Stude­bak­er design­er told me he once priced the 1953 Star­lin­er using Gen­er­al Motors cost­ings. He found that GM could have sold the iden­ti­cal car for $300 less (which was a lot more then than it is now).

Packard indeed had its own prob­lems. But Stude­bak­er dragged Packard down with it, mak­ing it impos­si­ble for Nance to find the finances to bankroll an all-new 1957 line that might have allowed Stude­bak­er-Packard to go on longer than it did.

The greatness of Raymond Loewy

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

And yes, Ray­mond Loewy led the teams that cre­at­ed the 1953 Star­lin­er and 1963 Avan­ti. They were the key to the cars being as dis­tinc­tive as they were. Loewy had a keen eye for tal­ent. He hired and direct­ed fine design­ers, such as Bob Bourke (Star­lin­er) and Bob Andrews, John Epstein and Tom Kel­logg (Avan­ti). The Avan­ti was impres­sive, but per­haps not the right prod­uct for Stude­bak­er. Otto Klaus­mey­er, a long­time and out­stand­ing engi­neer, told me he regard­ed it as “our first a duck-back, droop-snoot sport car.”

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.

Brooks Stevens’ life support

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. George Mason of Nash saw the future before any­one else. He tried to build a con­glom­er­ate of independents—Studebaker, Packard, Nash, Hudson—in the 1940s. Nobody else was lis­ten­ing. It was prob­a­bly the only way to stave off death for those com­pa­nies. After World War II, economies of scale worked great­ly in favor of the big automak­ers. But hind­sight is always cheap. And far too eas­i­ly indulged.


9 thoughts on “Why Studebaker Failed: In the End, It is Always Management

  1. Pop owned a ’53 Stude­bak­er with “3-on-a-tree” and the “hill-hold­er” fea­ture, where you could take your left foot off the clutch after set­ting it, as he described it to me. Genius!

  2. I was Stude­bak­er “nut.” I owned almost every mod­el since the ’49 “bul­let nose” except the Avan­ti. Most saw major mod­i­fi­ca­tions while in my care. But my two favorites were my ’56 Gold­en Hawk to which I installed a blow­er, and the ’64 GT Hawk with a 302 and blow­er. The ’56 Gold­en Hawk amassed over 200K miles before I final­ly sold it. Even the Wag­ons and con­vert­ibles were great autos but prone to rat­tles! Some frame mod­i­fi­ca­tions helped. And I nev­er had prob­lems with the Borg-Warn­er tran­ny pulling a 16-foot boat and trail­er. And you are cor­rect, nei­ther the sales team nor man­age­ment had any idea of how to mar­ket these stu­pen­dous cars.

    Thanks. My expe­ri­ence also. Stude­bak­er design­er Bob Bourke (’53 Star­lin­er) referred to the 120-inch wheel­base as “the rub­ber frame.”—RML

  3. Soon after I obtained my driver’s license I asked my father to buy a Hawk. The stan­dard paint job was white below black above. The deal­er reversed this for us. Great car: elec­tric over­drive, Hill-Hold­er, but the front end did not recov­er well after tight turns. It had a tachometer—that made all the dif­fer­ence for a kid.

  4. Amaz­ing­ly when Stude­bak­er was devel­op­ing its V8 in the ear­ly Fifties Cadil­lac actu­al­ly let its engi­neers tour Cadillac’s pro­duc­tion facil­i­ties. The Stude­bak­er engine was tech­ni­cal­ly not bad and had a rep­u­ta­tion for reli­a­bil­i­ty, but was small bulky and heavy with lim­it­ed room for development—which was also great­ly, per­haps pre­em­i­nent­ly, restrict­ed by lack of invest­ment cap­i­tal. In the end, if it wasn’t for the war Stude­bak­er would have failed much ear­li­er. On the oth­er hand, Stud­ies were unusu­al­ly attrac­tive. Got­ta love the Avanti.

    True obser­va­tions. The V8 was a big plus, and did evolve from 232 to 302 cubic inch­es, but they had to resort to super­charg­ing to get more out of it. In the end, though, it was their enor­mous over­head that made it impos­si­ble to break even. —RML

  5. I nev­er owned a Stude­bak­er. I was bare­ly out if high school when they were gone. But I thought they were the class of the road in the ear­ly Fifties and had my heart set on a Hawk about the time they closed. While they were built awhile longer in Hamil­ton Ontario, they real­ly nev­er had a deal­er net­work in Cana­da. They had beau­ti­ful half-tons that should have sold as well as GM or Ford, but there were few deal­ers that han­dled the Stude­bak­er line. I’m told that was true in the States as well. That should have been addressed between 1933 and 1950. It’s easy to look back and say they should have done this or that, and in this case I’m sure there were a mul­ti­tude of bad deci­sions, but this com­pa­ny could have been promi­nent to this day with its styling and engi­neer­ing. If I had the mon­ey to bankroll it, I’d buy every­thing that’s left and revive it. It’s the doing that counts, not the mon­ey. Great name, great waste.

  6. IMO Bourke’s Star­lin­er is a time­less design that is as beau­ti­ful now as it was in 1953, I was six years old when this car was intro­duced and I was already a “Gear Head”. When I first saw it I thought it was the most beau­ti­ful car I had ever seen. Noth­ing in the 67 years that have passed since then has changed my mind about that car. The one you owned is my favorite col­or com­bi­na­tion for the Star­lin­er. Bourke’s fine design gave Stevens “good bones” with which to work in cre­at­ing the Gran Tur­is­mo Hawk for 1962-1964.

  7. The sun was slow­ly set­ting as long shad­ows length­ened that hot sum­mer after­noon in rur­al Brad­ford, Illi­nois. For­tune found us stand­ing in front of that old red barn, miles from nowhere. “Have you ever seen a Stude­bak­er Avan­ti?” she asked as the barn door swung open. In the shad­ows were no few­er than eight of them—each Avan­ti a dif­fer­ent color—gleamng in sun’s gold­en shim­mer. The own­er, Leslie T. Welsh, own­er of the Stude­bak­er Wor­thing­ton Com­pa­ny, had died sev­er­al years before. He was the Arthur Ander­son exec­u­tive charged with break­ing up Stude­bak­er. He bought the heart and soul of the com­pa­ny, its engine divi­sion, and built an empire. She asked me if i want­ed to dri­ve one of the cars. I chose the red one. She smiled. I smiled too.

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