Re: SP merger

Posted by 58L8134 On 2015/4/9 18:18:15

Hi

Spoiler alert to anyone reading Mr. Neal's 1951-1954 book not to read this next paragraph if you want to learn about the foundry problem as you read.

Steve203: Mr. Neal wrote about the Executive Committee discussions of the foundry problems during early months of 1953 in relation to planning the V8 production. Although $200K had been spent to refurbish it in the late 1940's, Nance had been receiving reports of high turnover and low efficiency from his arrival. By spring 1953 foundry inefficiencies were costing $100K a month. Options were to renovate it over a year-long project to the cost of $400K or replace it with a totally new facility at $10M. Apparently the situation had deteriorated to the point where they gave up, decided to source casting outside, declared it surplus and put it up for sale by September 1954.

Rusty: A halo car would have been great for their image, though recycling any use of Studebaker panels built on the Contour chassis would probably have been more costly and gained less bang-for-the-buck that creating an all-new car based on a step-down engineered chassis. The Continental Mark II development that ran concurrent to the Pan Americans, Balboa X, Panther Daytonas and Request started not only as a fresh design but also a completely new low 'cow-belly' chassis, essentially a ladder-perimeter combination, not shared with production Lincolns. The problem Paul points out with prior efforts is the combination of tall frame, flat floors and low body profiles results in less-than-satisfactory seating position and legroom.

Initially, profitability was never a Mark II project consideration but internal political machination changed that by 1956. Part of the motivation may have been that Ford Motor Company went public and the concept of a major money-pit-ultra-luxury 'vanity' car for the Fords wasn't something conservative investors looked for in a well-managed company. As neat and interesting as the Mark II is, it was an expensive proposition for a company even with the resources that Ford commanded.

Packard might well have developed such a car once their merger with Hudson stabilized and a strong market showing put their regular models back in seriously competitive contention again. In the meantime, 1955-57, ultra-luxury versions of production models such as the Caribbean would have to do. What the heck, it worked well enough for Cadillac with the Eldorado Biarritz and Seville. Even Cadillac discovered they couldn't afford to keep their ultra-luxury Broughams going: if GM couldn't do it then, nobody else could. A market awaiting the right car was the personal luxury four-place coupe and convertible segment. Ford figured it out somewhat based on good demographic analysis and just plain dumb luck with the '58 Thunderbird.

Both Independents would have benefitted from an ironclad reciprocity agreement. Mason may have been dealing in good faith but whether Nance was is an open question; seem to have inserted enough "ifs" to allow S-P not to. We don't have exact figures but S-P probably sold more dollars worth of powertrain units than the value of the parts sourced from AMC. Both companies had unused capacity, both needed efficient production wherever it could be had. Neither seem to understand a flexible give-and-take was better than going it alone. Hubris was fatal for Packard, nearly for Studebaker. It would have been for AMC except that Romney made gutsy decisions which allowed it to step slippery stone-to-slippery stone across the competitive creek to a prosperous solid ground.

Steve