Packard Forum Index » General

I've heard Packard mentioned 4 or 5 times on 3 different news outlets this morning. The conversations were about the big 3 automakers struggling now and how some analysts are saying they might have to merge. Then they mention the 1950's mergers and how Packard-Studebaker merged and it only bought them time.

One of the reporters angered me a bit because he was trying to equate the Packard part of the merger as being the "Edsel" side of the merger.

I am at a loss as to what Edsel could have had to do with the Studebaker Packard merger. The introduction of Edsel occurred almost a year after the close of Packard.

Many former Packard dealers took on Edsel franchises (a terrible twist of fate for some). The SP merger was a calamity of errors between two established auto manufacturers whereas Edsel was Ford Motor Companies single-handed 250 million dollar mistake.

I think this misinformed reporter had probably never heard of Packard prior to this story. I have always wondered why Packards name recognition faded into obscurity so quickly. On the other hand, Edsel has maintained name recognition, even gaining recognition through the years because of its place in history for being synonymous with failure. This foolish reporter likely figured by bantering the Edsel brand in conjunction with the failure of the SP merger would punctuate the untimely demise of the great Packard name and somehow make it seem that Packard was the root cause of the demise of both companies.

It's funny, I have examples of both marques in my collection, yet share your distain for the comparison of Packard in the SP merger as being the Edsel in the deal.

Jim

I seem to recall that technically, Packard bought Studebaker and that it really wasn't a merger in the traditional sense. Is my recollection incorrect?

I believe that is what is mentioned in the Rise and Fall book.

An instance where the Packard credo of "A company run by gentlemen for gentlemen" came back to bite them perhaps--or maybe just incompetence by executives out of their league.

I can't imagine no due diligence and doing a deal with a handshake, accountant data taken at face value, when in fact were nothing close to reality and probably fully known as false when presented--and Packard taking it all in. I believe that same philosophy of taking someone at their word also bit them when doing some of the shared component deals with the merged Nash-Hudson.

O_D
Though technically Studebaker was purchased by Packard, this union seemed to be functionally a merger. I am in no way any kind of expert in mergers, or in the finite details of the SP situation. From the little I know, the two management teams functioned very independently; and of course ultimately the survival of Studebaker giving the sense of a failed merger. I guess this boils down to interpretation of the functioning arrangement, and agreements between the two organizations.

I truly wonder had Packard used the cash from the acquisition of Studebaker for investment in its own wellbeing, would they be with us today. I also understand the ideology of two of the oldest marques combining forces to rise to the level and strength of larger competitors to try to survive in a changing auto industry. It is awfully easy to play armchair quarterback, but I can only imagine what Packard was faced with at the time.

I truly wonder if this present time will have parallels to the 1950's auto industry.

From articles I've read, don't think there was any cash from Studebaker to be had. I think the actual purchase was mostly a stock deal.

From a supposedly break even point of around 175000 cars which was almost what they (Stude) were selling to a real number almost double that meant Packard was shelling out a tremendous amount of its dwindling assets to keep Studebaker going. True, they were selling 4-5 cars to Packards one but each one sold at a loss couldn't go on for long.

That seems to be the case today as well if the media reporting is to be believed.

HH56,
Very interesting information. Though Studebaker had no cash, it had assets, one of which was very valuable to Packard, their dealer network. With Studebaker selling 4-5 cars for Packards 1 it certainly is easy to see how the public perception was (is) that of a merger. I suppose after bankruptcy, Curtis Wright felt of the two, Studebaker had the best shot of survival.

I too ponder over the seemingly fraudulent representation of the Studebaker books. I suppose Packard executives failed miserably by not having an independent auditor review Studebaker's fiscal standing prior to purchase.

I agree about the dealers--although some of them were nothing more than a sign in a gas station window, there was that perception and opportunity. Another thing I think could have been improved was the naming choice. The fact Stude was first (even though it flows off the tongue better) also leads to be belief that S was the major partner. I've read some articles by the S crowd and they are just as opinionated that S was pulled down by Packard and would still be in business if that purchase (By S of P incidentally in their reasoning) had never taken place.

AND to further add to the irony...James Nance was hired by Ford Motor Co. to help run the...ta-daaa!...Edsel Division!

(According to the Ward book)...and after that, he ran a bank because that's where the money was...

What if Packard had merged with Hudson? The Hudson bodies were outdated by 1954, being built on the same platform since 1947. The Stepdown hudsons were a great design but were really dated by 1954. Packard had the new 1955 bodies. I could have seen the Clippers become Hudsons and promote the Packard V-8 in the clipper as a performance "Twin-H" type of factor.

Hudson was a good solid name, better than Studebaker I feel. I'm sure Hudson was in worse shape than Stude, but I think Studebaker was the "red headed stepchild" in the merger. In my view, the merger was like Cadillac merging with Nash.

As for the Edsel comment by the media, Packard was a solid name in the business. To compare it to a New brand of car is kind of ridiculous. Edsel wasn't a bad car, just too radical of a design, and being introduced in the recession of late 1957-58 didn't help either. The term "Edsel" has become a adjective for failure or flop. This is unfortunate.