The big four way

Posted by Steve203 On 2014/8/23 13:06:19

The Langworth book about Hudson was written in the mid 70s, when several of the officers of the company were still living. In his research Langworth also interviewed Nance. Langworth says that it was in his interview with Nance that Nance revealed Mason's grand plan to merge all four independents, including Studebaker, which Langworth had never heard of before. Roy Chapin was also interviewed for the book. He had never heard of this grand plan either, but then Chapin was a rather junior executive at the time so not necessarily privy to everything. Romney declined to be interviewed.

As Nance told the story, when Hugh Ferry was recruiting him in 51, Ferry told him of this grand plan, but that the stumbling block was Harold Vance, who Mason had not been able to come to terms with.

Nance said "The offer to me was to put Studebaker and Packard together so that later on the four companies could be brought together...He (Mason) had picked up Hudson, which was then for sale and being shopped, that was no secret...We agreed that Mason would take the Hudson-Nash end, and I would put Studebaker-Packard together, then we'd fold the two pieces together into one company."

Then Nance said "I wouldn't have gone into it just to take over Packard"

That this was a recruitment pitch from Hugh Ferry, in 51, puts a different light on it. If Nance understood there was a gentleman's agreement dating from 51 to leave Hudson for Nash to absorb, that would explain why Barit's approach to Packard in August 53 was declined. It might also explain why Nance didn't require any proper due diligence done on Studebaker before the merger was closed, as well as his fixation to merge with Studebaker at any cost.

But it raises more questions

-If the grand plan had been in existence since at least 51, and, as Nance claims, Hudson was already on board, then why would Hudson approach Packard at all? Langworth's first person interviews said the negotiations between Hudson and Nash took six months. The boards approved the merger on January 14th of 54, so an August contact with Packard would have come in the early days of negotiations with Nash. Nash and Hudson confirmed to the media that talks were underway in November of 53.

-If the grand plan was disclosed to Nance in 51, and was a condition of his joining Packard, then why was Nance ordering studies of every possible merger partner he could think of, including Kaiser, as Ward reports, if the four-way was already agreed in principle between Packard, Hudson and Nash?

-If the four-way was a done deal, why did Nance have further studies done that claimed millions and millions of dollars in savings by combining Packard with Studebaker, without consideration of American Motors?

That's adding up to a lot of money spent on studies for what was supposed to already be settled. A really expensive smoke screen to hide the grand plan?

So, from a vantage point of 20 years after the event, was Nance trying to cover his own rear by saying he had been double crossed by Nash, when the grand plan as he described had never existed? Did Ferry dangle the grand plan as a recruiting tool, when it didn't really exist, which Nance discovered to be fiction after he joined Packard, and he set off on his search for someone, anyone, to merge with? Did Mason pass the grand plan to Ferry via a mutual contact just to keep Packard away from Hudson, because Hudson was a good fit for both Nash and Packard, while Studebaker didn't fit with anyone or anything?