Re: One Story Assembly Plant What If?

Posted by Steve203 On 2014/6/10 17:09:04

Had Packard waited for the inevitable Studebaker bankruptcy before buying them out...Keeping the customer faith that Studebakers were still going to be produced, not become an orphan, would have been the trick.

Keeping the customer base, and keeping the dealers on board. Buying the Studebaker assets in liquidation would have taken months, maybe a year. How could a dealer survive that long without new cars to sell, and could he even obtain replacement parts for his existing customers? Additionally, buying assets in liquidation requires cash, which Packard was short of. And Grant was telling Nance Packard was "on a path to bankruptcy" so the pressure to do "something" fast was extreme.

On the other hand, doing a stock swap for Studebaker as a going concern, as Packard did, does not require cash, but has another problem. As Ward spelled it out, because Studebaker was a larger company, the stock swap worked out so the Studebaker stockholders had a controlling interest. Any attempt by Packard to rationalize the operation by shutting South Bend would have been blocked by the Studebaker interests. The competing Studie and Packard interests on the Board of Directors were so deadlocked they couldn't even agree to consolidate testing at one proving ground and sell the other one. My plan to produce the senior Studebaker models as decontented Clippers would never have gotten past that Board.

A prickly situation indeed.

On the stampings, I recall reading that Studebaker relied on Budd to do a good deal of that work, as well as some in-house.

I know that Budd made the dies for the 53s, the ones with the front fenders that didn't fit. I have seen plans of the South Bend complex and there is a building labeled "stamping" in the middle, close to the head of the assembly line buildings.

Moving the Studebaker truck production to Hamilton would have been one escape route,

While keeping the truck line has crossed my mind, I'm not sure it would be worthwhile. When the R series was introduced in 48 it was very popular and Studie had a larger share of the truck market than they had of the car market. But they didn't make any additional investment in the line. They changed the grill a couple times, went to a one piece windshield and enlarged the window in the back of the cab, but that was it. By the mid 50s, it's design with the projecting fenders and a narrow cab was looking obsolete. Dodge had widened their cab in 48. Chevy did a dramatic restyle in 55 that made everything else look ancient.

The Hawk line had the potential to tap the emerging sport- personal luxury coupe segment

True, but the Hawk depended on the volume Studies for everything under the skin. I would have doubts of the economics of continuing production of those parts for such a low volume model, let alone developing the platform.

Plowing profits back into the business might not have been as good for the share price in the short term, but was beneficial long term.

Yup. Chrysler was also guilty of hanging on to obsolete plants. They hung on to Dodge Main until the early 80s. Probably Henry Ford was able to keep walking away from plants and building from scratch because he didn't have stockholders. I can just see a CEO at a stockholder's meeting saying "I'm going to walk away from the millions we invested in this plant 20 years ago, and drop tens of millions on a new plant." Ford could get away with it because it was all coming out of his own pocket.

Speaking of Packard buildings. The only modern buildings at EGB were built for the Merlin program 22 and 84. 84 was cut back to the tune of about 100,000 sq feet when the freeway was cut through. I was wondering when the freeway route was set, to see if there was some chance that the freeway could have been rerouted to keep 84 intact.

What I found was that a freeway running along Harper had been proposed in the 20s. The route was laid out in February 1941. At that time, there was probably nothing at the north end of EGB but the remains of the old test track that was at the north end of the complex in the 20s. So, it appears that 22 and 84 were built knowing they were encroching on the freeway right of way. The freeway was nudged a few feet to the north and the ditch narrowed to clear 22, but probably all concerned knew 84 was going to get chopped when it was built. That's probably why nothing important was put in 84 after the war. It was just used as a warehouse.