Re: Would it have been easier to salvage Packard than Studebaker?

Posted by Mahoning63 On 2011/1/2 20:57:21

That's great info. As to the question of the need for diversification, the history of many auto companies past and present suggests that venturing into non-auto businesses tends to hurt the overall company. Nash was an exception with Kelvinator and they got a great A/C system out of the arrangement.

GM bought aero companies such as Hughes back in the 80s, didn't help. Ford went on a non-auto (and auto) buying spree in the late 90s and has since gotten back on track, or at least stopped the bleeding, by divesting all but the core Ford and Lincoln product. If Romney had thrown up his hands in late 1954 and concluded that the industry was too tough a nut to crack for an Independent he might have spent the '56 Rambler money on non-auto businesses. Would it have paid off as handsomely as the mega bucks that AMC earned over the next 10 years? Packard chased after non-auto work post-war with money that could have updated its cars. Then they spent more money chasing after a presence in the low priced field. Diversifying invites risk and diverts money, talent and management attention. It seems to make the most sense when one is either on top of their core business or desperately trying to abandon their core business.