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From what I gather, my 1956 sat unsold on a Virginia dealer's lot for almost six months, even after a massive price reduction from $6204 to $4200.

Not surprised. Various sources state that, at the time EGB was closed, half of the 56s that had been produced were still unsold.

But having a former GM President as Secretary of Defense only ended up making General Motors a stronger company

Yup. Ward goes into that in some detail. Apparently, Wilson's funneling business to GM, at the expense of the other automakers, was so blatant that the media, including Drew Pearson, was attacking Wilson. One of the unknowns is that, had Packard sold the J-47 contract to Curtiss-Wright, or Continental CAE, would it have been cut the way it was when Packard was profiting from it? Neither C-W or CAE appear to have had any problem landing defense contracts.

In 55, just as the Packard J-47 contract was being closed out, CAE landed a contract to produce jet engines used in an Air Force trainer. CAE leased the government owned plant in Toledo that Packard had used for the Merlin program and it's late 40s jet development. CAE produced those engines for 20 years, and in the 80s was producing cruise missle engines there.

Interest rates and mandated high down payments kept more sales stillborn.

True, the Fed raising interest rates impacted all consumer spending. Packard, not having an in house finance company, like GMAC, could not subsidize it's customer's and dealer's financing as GM could.

S-P's fractured Board of Directors wasn't helping it's case though.

Following the AMC merger, the Hudson plant was quickly closed and production consolidated in Kenosha.

Not only did S-P keep both plants operating, in spite of both plants producing below their break even levels, Ward points out that they couldn't even agree to consolidate testing at one proving ground and sell the other.

Some modifications to EGB would have been required for material handling; ramps and conveyors, even running to the outside if necessary.


I'm not sure that would be feasible. Besides the narrow footprint of some of those buildings, I would not want to go driving down a ramp in a fork lift with a load of engine blocks.

As best I can tell, the Packard plant did not even have the material handling solution that other old multi-story plants had. The photo shows the interior of one of the Studebaker buildings. Each department on the upper floors has a balcony overlooking this central core. Railroad cars bring material in and an overhead crane lifts material to the balcony of the appropriate department. I have seen interior photos that show Ford Highland Park used this same system. EGB doesn't appear to have enough room for the railroad tracks to make the turn to go between building wings to use this system.

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Many 54 Packards also sat on dealer's lots for months awaiting sale at distressed prices; 54 was a bad year for the industry and for Packard another factor may have been anticipation of the "new" V8 models. A friend bought a 54 Cavalier that sat on the lot of McBride in Ridgewood NJ for over half a year and was finally sold well into 1955.

Another insight into the Studebaker-Packard acquisition fiasco (if you can locate them) and the details contained in the legal proceedings of the stockholder lawsuits by Packard stockholders that went on for a decade or more.

<i>...perhaps retaining stamping operations at Connor for the time being but phasing in complete body jigging, welding through final trim to EGB on a second floor body line above the chassis line would have been the solution. It's something of a work-around but still utilizes the main plant more fully, rather than creates more unused space.</i>

That phased transition to bringing bodybuilding into EGB is, according to Ward, what Nance wanted to do. Briggs being sold forced Nance to make other plans on short notice. As for the unused space at EGB from moving final assembly to Conner, reportedly the Board decided to sell all the facilities south of East Grand in the spring of 56, just retaining the offices and shops north of the street.

It's dealer network was broader but populated with many small, weak dealers, though could have given Packard better coverage when dualed.


Ward noted that some Packard dealers were so poor they didn't even have a Packard demonstrator. In 58, we relocated from Dearborn to Kalamazoo. According to the dealer directory on this site, the address of the Kalamazoo Packard dealer was in a somewhat sketchy neighborhood. I remember the Studebaker dealer however, a reasonably nice building in a prime location on Michigan Ave, right across the street from the Rambler dealer. A more agressive dualing of dealerships would probably have been an upgrade for Packard in that town.

Retaining the Chippewa plant to build trucks and Hawks for '56 on would have keep the dealers happy while giving them new larger Commanders and Presidents,

The problem with retaining Chippewa Ave is Packard would still have to deal with local 5. I suspect that Chippewa was also dependant on the main South Bend complex for stampings and power train, so you would have to buy more facilities to support Chippewa, or create more logistics problems supplying the plant from Detroit.

If Packard really wanted any Studebaker facility, I would have gone for Hamilton, Ontario. A reasonably modern plant, with a breakeven, iirc, of 30,000/yr. Hamilton appears to have created it's own local supply chain for everything but powertrain, which was shipped from South Bend. The only thing I would have done with that plant, with that small capacity, would be move the truck line in.

The truck line introduces another problem, what to do about powertrain? A short stroke V8 with a torque peak of some 2500rpm isn't really the thing to have. After the AMC merger, Hudson producton was consolidated in Kenosha, but the Hudson engine plant in Detroit was kept operating so the Kenosha built Hudson Hornet could still be offered with the 308. A Studebaker truck with a Hudson "big six"? Stump pulling torque at 1800rpm? Then make up a different name, like the Transtar name that Studie started using in 56, and have AMC distribute them as well as Studebaker, as neither Nash or Hudson built trucks at that time?

Then there is the local 5 issue.

At that time, it was legal for a solvent company to shut a division and stiff the pensioners. Studebaker's pension fund was severely underfunded because it had only been established around 1950, and it immediately vested benefits for the large portion of the workforce that had been with Studebaker for 30-40 years. When Studie closed South Bend in 63, they distributed the pension fund assets as far as they went, and the other ex-employees were out of luck, even though Studebaker Corporation was a solvent, contnuing company. This led to the establishment of the PBGC some 10 years later.

Less well known was that Packard's pension fund was also underfunded. The Packard and Studebaker pension funds had never been merged, so when EGB was closed, those employees were stiffed the same way South Bend workers were a few years later.

When Kaiser bailed out of W-R, it stiffed it's employees as well, though, being a much newer company, did not have the large numbers of people with decades of service who thought they had vested pension benefits.

<i>......like handling a poisonous snake!</i>

or, as someone said "like making love to a porcupine"

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Once again, it was not Kimes. It was George Hamlin and Dwight Heinmuller who wrote that section of the Automobile Quarterly book edited by Beverly Kimes. This is not to take away from the monumental job she did putting all those individually authored chapters together.

(o{}o)

Mea culpa about my mention of the wonderful Automobile Quarterly volume "Packard-A History About the Motor Car and The Company". I took the easy way out by looking at the sole name on the binding when I referred to it as Kimes. I knew fully well that she was the Editor and relied on the excellent authors (ten in all) including the likes of Hamlin, Heinmuller and Richard Langworth.. Without a doubt it qualifies as the Packard Bible and one of my favorites. I just wish that the title rolled a little easier off the tongue. The binding simplifies it as "Packard".

I think we are all in agreement here. The AQ book on Packard's history is often called the Kimes book, and this is understandable. Just trying to shine the spot light on the often forgotten writers.

(o{}o)

There is such a thing as brand stagnation. A few products like Coke and Marlboro can hang in there because they are cheap junk. However the way of buyers can be very fickle. The situation today is that nobody is building a car intended to get you where you want to go. Supposedly people don't buy cars based on reliability. If that is the case do they deserve anything but junk?

The disappearance of Pontiac, Plymouth, Mercury, Oldsmobile, and AMC sort of blows up a lot of the Packard situation. If that doesn't then the GM bankruptcy certainly does. Cadillac had dealers operating out of gas stations in the 30's so Packard's little soda fountain operations were not unique. What was different for Cadillac was that GM decided to invest in Cadillac and make it work. Today, Cadillac doesn't serve a purpose either. Nor does Lincoln.

When you look at how much capital Packard had access to it still boils down to the amortization of the Packard plant and ultimate liquidation. If the 110 wasn't able to pay for new investment where was the company to go anyway?

If the 110 wasn't able to pay for new investment where was the company to go anyway?


Lack of reinvestment is a recurring theme with failed auto companies.

Studebaker's bankruptcy in 33 is partly laid on Albert Erskine's decision to keep paying stock dividends, even when the company had to borrow to cover the payout.

Studebaker was also paying out dividends after the war, while the newest of the buildings in the main South Bend complex dated from the 20s, and some dated to their pre 1900 horse and buggy days.

Packard also was paying dividends while it kept repurposing and adding on to obsolete buildings.

I remember an article in Fortune in the late 60s, when AMC had a brush with insolvency, that blamed Romney's paying out dividends instead of investing in modern plant and equipment to reduce the company's uncompetitive cost structure.

In comparison, when Ford's production process and capacity needs rendered the 6 year old Piquette plant obsolete, he didn't try to adopt it or add on to it. He packed up, moved to Highland Park, and built and entire new, state of the art plant.

When Ford's production process and capacity needs rendered the then 18 year old Highland Park plant obsolete, he moved to Dearborn and built another new, state of the art plant, the Rouge.

Hi Steve203

"like making love to a porcupine" What a prefect descriptions of everything to do with Studebaker all the way around!

You are right that as long as any manufacturing operations were kept at South Bend, the UAW Local 5 would have been an ongoing problem. Had Packard waited for the inevitable Studebaker bankruptcy before buying them out, it would have been in a much better position to clear away much of the baggage the made doing business there such a problem. Keeping the customer faith that Studebakers were still going to be produced, not become an orphan, would have been the trick. On the stampings, I recall reading that Studebaker relied on Budd to do a good deal of that work, as well as some in-house.

Moving the Studebaker truck production to Hamilton would have been one escape route, though engine availability still problematic. I've considered whether with Packard completely in control after dissolving the Studebaker board and aggressively integrating operation, if IH might have been contracted to badge-engineer/restyle their trucks as Studebakers. Though Studebaker trucks were well accepted in rural areas, they still held a small portion of the total truck market.

The Hawk line had the potential to tap the emerging sport- personal luxury coupe segment that Ford would soon exploit with the four passenger Thunderbird. Producing those at Hamilton might have been an option. With a degree of chassis refinement, fitted with Packard V8's and Ultramatics, they might have carved a nice niche volume and become an image builder as well.

Of the plant situation analysis, the main thing that comes through is how much the way cars were built changed in the thirty years from the '20's to the '50's. The strongest players didn't hold onto old plants when newer layouts developed, didn't keep retrofitting obsolete plants. One supposes it was just intracted ways of doing business that kept the smaller independents from moving with the times, as in "its worked up to now, why change?" Plowing profits back into the business might not have been as good for the share price in the short term, but was beneficial long term.

Steve