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Re: Packard & Hudson proximity
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Steve203
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the Clipper would have been a good two inches higher and body-on-frame, taking away some of the most unique selling features that had kept Hudson going up to that point.

Given that Hornet sales had fallen each year, in spite of the Commodore being dropped in 52, which should have sent more volume to the Hornet, I would say the ride, handling and racing prowess was overridden in the market by 6 year old styling and the claustrophobic interior.

Then, what were Hudson's prospects? Packard had a new V8. Packard had Torsion Level, invented by a Hudson engineer who Hudson lent to Packard because Hudson didn't have the money to develop it. Packard could afford a much more noticiable rennovation of their product line than Hudson could.

And second, EGB's cost structure did not seem to support as profitably, on a per unit basis, the production of medium priced cars versus Hudson.

Barit was really tight with a buck. The Langworth book talks about his thrift, like the minimal materials the styling department had to work with vs the large number of clays we see at Packard. Chapin talked about what a hard negotiator Barit was in the merger discussions. Ward talks about how Packard had been keeping a lot of dead wood on the payroll and Nance's efforts to clear them out. Meanwhile, Nance was spending like crazy on his rennovation program, iirc on the order of $40M.

Posted on: 2014/8/23 17:46
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Re: Packard & Hudson proximity
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Mahoning63
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OK, let's walk it through. There are really two scenarios. The first is where Hudson lobbies Nance hard for merger the day Nance arrives in 1952. In this scenario Nance is still finding his legs and buried in Packard's own challenges but lets say he goes with it anyway. This means there is no 1954 Clipper but instead a 1954 would-have-been Clipper turned Hudson, spec'd as you have suggested. Jet is still alive in 1954, Nance always wanting a small car, but he is losing patience with its poor sales performance. Wasp is history, EGB not being able to make it cost-effectively. Hornet is doing OK, not great but hanging in there. 1955 brings a rework of Reinhart body, V8s and TL. Hudson's dealer network helps sell that many more cars especially after Packard and Hudson begin to dual certain dealers. Probably the biggest change in history is that Nance no longer sees the need to merge with Studebaker, having his own small (albeit pathetic) car. And he knows Jet is one redesign away from glory just as his large cars are. By now Romney is running Nash and has no interest in merging. Studebaker is quickly taking on water and even if the Packard merger with Hudson only causes Nance to delay, say, 6 months in considering Studebaker (assuming he still felt the need for a Big 4th), that delay is enough to convince him that Studebaker is a would-be albatross. And so... Packard-Hudson survives and Nance is able to keep Jet production going with his usual deal-making skills, now focused on Murray.

Now scenario two. It's late 1953, Clipper is ready to launch, Hudson is losing lots of money and the thought of carrying them until 1955 scares Nance. He considers all but closing them down as an option, mainly to keep the plant and unibody expertise, but it is all too risky and his own company's sales are tanking with the end of the seller's market. Barit is also less than keen on seeing his company dismantled. He might as well flip a coin between Nance and Mason. Scenario two doesn't seem to work.

From all these what-ifs we have been reading about and floating for years now, I have concluded that any of the Big 4 independents could have survived with the right product, and none had a chance with the wrong product. Romney got the job done. He got the car right in 1956 and focused on it to the exclusion of everything else. No more mergers, no more large cars, nothing but his Rambler. He also got lucky with the 1958 recession. Luck often has a hand in victory. But mostly it was his good judgment. Had he been at Studebaker, Hudson or Packard I suspect he would have exercised better judgment overall than the folks who led those companies. I think he would have struggled most with Packard though because he didn't have a very good eye for style. Nance brought in Schmidt, who fathered the Predictor style, probably borrowing a bit from what he saw at Ford.

Posted on: 2014/8/23 18:48
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Re: Packard & Hudson proximity
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Steve203
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The problem with forcasting is the farther out you go, the more assumptions you have to make and the farther off the mark you are likely to get.

I figure a Packard/Hudson merger, with immediate consolidation of facilities, would, if not generate enough volume to make EGB profitable, would at least reduce the losses. Reduced losses would encourage the bankers to loan the money to fund the new common platform for 57 or 58. Packard gets a stay of execution.

Nance is able to keep Jet production going with his usual deal-making skills, now focused on Murray.

The Jet might perk up a bit, with the withdrawl from the market of the Henry J, and in 55, the Aero. But would Jet volume alone change Murray's mind about exiting the auto parts business?

Additionally, keeping the Jet in production means keeping that line at Jefferson open, for very low volume.

Even if Jet volume picked up a bit, and Murray stayed in business, (two iffy assumptions) would there be enough volume to justify investing in a second generation Jet?

Scenario #3: Jet is dropped in summer 55 When Murray exits the business. Romney follows his gut and drops the senior Nashs when the new Rambler is introduced for 56. Nance and Romney negotiate a co-marketing agreement where Nash dealers have the option to carry Hudson to fill the gap left by the discontinuation of the senior Nash, and Hudson dealers have the option of carrying the Rambler to fill the gap left by the discontinuation of the Jet.

Romney is elected Governor of Michigan in 62, so decides to make the relationship with Packard-Hudson legal as he heads out the door, renaming the merged company American Motors and Nance is elected President. Roy Abernethy storms out in a fit of pique. Given what I have read about Abernethy's performance at Willys before he went to Nash, and how he nearly ran AMC into the ground in the 60s, Mr Abernethy, don't let the door hit you on the way out. Nance retires at age 65 in 1965, and Roy Chapin Jr becomes CEO (two years earlier than when he actually took over as head of AMC)

Posted on: 2014/8/23 23:42
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Re: Packard & Hudson proximity
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58L8134
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Hi

On Romney's decision to go with Rambler exclusively, he did have some encouragement to conclude that would be a successful strategy in the continually increasing numbers of imports selling here. Although it hadn't turned into a flood, lead by VW nearly every European maker was seeing grater buyer interest in their cars that had been nearly zero only a few years before.

With a Packard-Hudson merger, perhaps Hudson's manufacturing managers could have corrected EGB higher unit cost problem. One overall idea of merger was to affect greater production efficiencies and lowered breakeven points, EGB was ripe for such an overhaul.

Steve

Posted on: 2014/8/24 8:15
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Re: Packard & Hudson proximity
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Steve203
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On Romney's decision to go with Rambler exclusively, he did have some encouragement to conclude that would be a successful strategy in the continually increasing numbers of imports selling here.

The market made up Romney's mind. In 56, the new Rambler accounted for about 2/3rds of AMC sales. In 57, senior car sales collapsed.

The 62 merger would have been interesting. DeLoren promoted from Packard engineering to President of the Rambler division, and he sets to work purging the brand's grannymobile image with a line of attractive and affordable cars with potent performance options aimed at the boomers that are reaching driving age. Dick Teague moves from head of Packard styling to overall head of AMC styling. Roy Chapin moves from President of the Hudson division to CEO of AMC when Nance retires in 65.

The company would probably still be rolled over by the big three and Japanese imports eventually, but it would have made some waves along the way.

Posted on: 2014/8/24 9:53
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