Packard Forum Index » Studebaker Built Packards (1957 - 58)

I seem to recall reading that S-P Corporation made Packards in 1957-1958 ONLY to honor dealer franchise agreements, etc.

Is that true?

I have a few original, signed, Packard dealer agreements from 1955 and 1956 in my personal archive, but not within reach at the moment.

However, I would expect that the terms weren't much different from what the rest of the industry followed. A highly relevant point, with regard to dealer termination, is the repurchase of the dealer's unsold new vehicle and parts inventories. Never mind possible litigation for any breach of contract, but just imagine the financial consquences for S-P if they had not produced Packard vehicles for Packard dealers in 1957-1958 and had to buy back all that unsold inventory.

Fast forward 50 years to the Great Recession, and I imagine that the troubled automakers actually embraced the idea of a gubbamint bailout that stipulated a "controlled" bankruptcy. They didn't have to pay one cent out of their pockets to discontinue hundreds of dealers - and that's just one of the little sordid details of the whole affair.

I suppose they were made to be sold, same as the 1899 - 1956 models if that is what you mean by marketing purposes.

I don't see how it saved them any money to drag out production for another 2 years. They would still have to buy back practically as much unsold merchandise and it cost them millions to tool up and produce the 57s and 58s.

My guess is they thought a) the "Packardbakers" would act as a stop gap until they could raise the money to build a "real" Packard or b) they were such great cars the public would buy enough of them to make a profit.

In any case the whole Packardbaker project turned out to be a pipe dream and was dropped, along with the regular Studebaker line in favor of the new compact Lark. The Lark was more in tune with the public's desires at the time, and got the credit for saving Studebaker.

This illustrates that times were changing, big cars were out of favor, and chances are Packard would not have survived no matter what anyone did.

There is another angle on this question. From a business standpoint when management realizes it is no longer possible to continue in the same business and make a profit it becomes necessary to make a plan for liquidating the company.

Often this includes running the business into the ground. Cutting back on new product development, neglecting upkeep of the factory and generally cutting expenses to the bone and using up all the resources they have left.

When the time comes to close the doors there is nothing left of value, everything has been turned to account.

I wonder when the top brass at Packard or Studebaker Packard realized the jig was up.

Based upon their actions and published industry accounts, I'd say shortly after they looked at Studebaker's books. That would have been late '54-early '55.

jack vines

That seems to be the popular notion, one of those canards that gets out there and then is never challenged or corrected.

This topic was covered in a recently published book called "Champion of the Lark: Harold Churchill and the Presidency of Studebaker-Packard, 1956-1961" by Robert R. Ebert.

The gist is that the notion of producing the 1957 Packard just to avoid litigation is not true.

The question of whether or not there would have been a Studebaker-based 1957 Packard was up in the air for an extended period of time, and could easily have been nixed. The three factors that played in favor of the 1957 Packard Clipper were the the low cost of the tooling alterations that were needed, the fact that Duncan McRae already had worked up such a proposal even before Nance had thrown in the towel and before Packard Detroit was closed, and finally the low break-even volume on such a car.

As a Packard Clipper, it commanded more money than the Studebaker President Classic, $3,210 versus $2,500. If the tooling cost was about $1 million (I need to double-check this figure), then the extra $700 per car would have paid off the tooling and then some, bringing in a premium of $3.4 million over the income from the equivalent number of President Classics (around 4,800 cars).

S-P wanted to survive and generate cash, and it also wanted to wait out the storm and maybe buy time until a grand Packard could be returned to the line. As we well know, that was not to be, but Churchill was quoted as saying that it would be a lot tougher to bring back the Packard marque after even just one year of hiatus, than it would be to rebuild it after this obviously junior offering. So for better or worse, depending on how you feel about the South Bend Packards, Churchill stuck up for the Packard nameplate, and gave us two more years of Packard history before realities could no longer be ignored.

The Ebert book is available on Amazon.com as either a paperback or as a Kindle electronic book. It's a very scholarly book, and I highly recommend it to anyone who has an interest in Packard or Studebaker history, and who wants to look behind the scenes at the waning days of Studebaker-Packard, "America's fourth full line automaker."

That sounds like an interesting book, and might shed some more light on the financial situation at Studebaker before Packard "merged" with them. If the accounts of how much this transaction cost Packard are true, I would be inclined to believe that it was the single greatest contributor to Packard's demise.

As stated, the book "Champion of the Lark: Harold Churchill and the Presidency of Studebaker-Packard, 1956-1961" by Robert R. Ebert pretty well covers this topic . . . And is a very interesting book in its own right. I downloaded the e-book from Amazon and enjoyed it very much. Ebert also provides some insight into the decision to produce the 1957-1958 "Packardbakers" being proven correct (well, the 1957 anyway) based on a pure business evaluation. That is, S-P made more money with the Packard cars those years than it would have without them. The cost to produce the Packard cars those years was relatively low, and the per-car profit was the highest of any S-P product. The 1957 Packards also helped to lower the break-even point that year . . . And even though S-P still failed to meet that point, the financial picture would have been even more dismal without them.

Yes, there were grumblings from the Packard Dealers. No, they didn't like the 1957 Packard when it was unveiled to them. They asked for (and got) a station wagon version of the sedan, which was the only model initially planned. They also asked for a Packard version of the Hawk to sell, which they got in 1958. That's right, they asked for it. There was a fund set aside for settling litigation with disgruntled dealers - a paltry (even in 1957) $250,000 - and the sum of all claims never exceeded that amount. Many little insights like this appear throughout the book. For Studebaker and Packard aficionados alike, it's worth a read.

It sounds like that might be a worthwhile book; I've downloaded in onto my Kindle and plan to read it during my flights to/from Alaska in a few weeks. Someone should add it to the "Packard Bookshelf" if that has happened already.

There was another factor not mentioned in all books. Chrysler bought the Briggs body plant about this time and couldn't/wouldn't do any more Packard stampings.
Packard even investigated the purchase of previous years Lincoln stamping dies but were unable to acquire them.