Re: Great Packards

Posted by portlandon On 2008/12/8 17:46:41

Al-

I read a great article on the '50's mergers in Hemming Classic Car (11/08) written by Patrick Foster.

He runs through the Kaiser-Willys-Overland merger, Nash-Hudson merger. He also pays special detail to the Studebaker-Packard Merger.

"The last of the "Small-Six" to merge were Packard & Studebaker. Their case may be the most controversial of all, because I believe they both approached it with less than shining motives.

Studebaker was hit hard by 1954's Chevy-Ford sales battle. By mid-year, the company was hemorrhaging money and its only hope seemed to be to merge with another company with enough cash to sustain them both until the market turned around.

Packard sales were also down, and the company had burned through a lot of its cash restyling its cars for 1955, introducing a new V-8 engine and a revised Automatic Transmission along with new plants. But Packard's biggest problem was its image: The company and its cars were viewed as stodgy, and most of its sales volume was in the lower-priced Clipper series, not the luxury Packard line. Cadillac had a firm grip on the title of America's top luxury car and Packard was slowly drifting toward ruin. It's management viewed Studebaker dealers as volume-oriented big-timers and hoped that many of them would add the Packard line, which would give Packard sales a solid boost.

Both Packard & Studebaker were in worse shape than they let on and neither wanted to have their books scrutinized too closely, so each agreed to accept the other's word regarding costs and break even points. Since both were in bad shape, the result was heavy losses and loss of public confidence. The only positive result was that Studebaker was able to hold on until the 1959 Lark compact sparked turn around. Seems Ironic: Packard's money helped keep Studebaker alive even as Packard expired. But that's the way it happened".

I like what he said, and think it makes the most sense. Both Packard & Studebaker were not the most honest with each other leaving one to suffer demise, and the other only life support to get it to the late 60's.

It is simplistic, and there are alot of smaller factors ('55 quality control, Re-tooling costs, body plant problems, V-8 oiling problems etc.) but I like Foster's take on it because he loves independents and gets alot of guff for telling it like it is.