Re: Packard & Hudson proximity

Posted by Mahoning63 On 2013/2/13 17:50:56

Thanks for pulling those numbers together MrB and great points. It should be said that breakeven is not a static number unless the CEO is flat on his rear. Studebaker's came down after labor costs were reduced. For a recent example of just how much money there is to be lost or made in the auto industry, look at Ford. In 2006 it lost billions, 5 years later in the middle of a recession with fewer sales and static market share it made billions. How? Because mgmt got rid of 50% of the salaried and hourly workforce, sold brands, reduced platforms, vacated dozens of buildings and made those who remained work more hours.

Do I think Packard could have reduced its 1957 breakeven to 25,000 units? Maybe, maybe not. I wouldn't rule it out. Nor would I rule out an 80,000 breakeven for Studebaker. You get to these low numbers by trimming everywhere and selling cars that command good pricing. Ford makes money mostly off its trucks. Packard would have made good money off its luxury models. Share of those vs. rest of Packard line were inching up in mid-50s.

Most of the brands that went away through the years didn't have to, the market could have supported them. They went under because of poor mgmt.

Hudson as volume producer over Packard is exactly the strategy that was needed. Hudson would have taken on the role of the 1920s Packard Six while Packard would have been the Eight. Not in cylinder count but in market coverage.