Packard Forum Index » General

Steve203 - here's a run-out of another S-P merger scenario that folds in your other want... merging with Hudson! Enjoy.

It's late 1953 and Nance is looking at his many conundrums and options:

- seller's market gone, Packard in trouble
- Mason will be King or no merger, Romney competition
- if Mason gets Hudson, AMC only gets stronger
- Barit has approached Nance white flag in hand
- Nance likes lowness of Hudsons and sees ugly Jet as potential Depression-proof small car
- Conner to be sold, Packard at risk
- 1955 is line in sand... must be a big product intro
- Panther style and proportions point to future, fiberglass unknown
- Studebaker sales OK but signs of trouble... Studebaker white flag 1-2 years behind Barit?


So Nance acts:

- buys Hudson on December 1, 1953
- Investors agreeable to "Big Plan", see Nance as man of action, Mason as man of words only (...Mason furious!)
- all hands focus on 55's on common Hudson body shell with Panther's basic styling and proportions
- Hudson floorpan and unibody assembly carried over, jigs modified where possible, all else new
- longer hood and rear overhang for Packard, shorter for Hudson
- 352 V8 for Packard, 320 V8 for Hudson. Big Six dropped. Wasp dropped.
- Jet gets smart looking 2 and 4-door wagon, helps proportions, investment kept minimal
- Studebaker kept on watch list

Which leads to:

- financially disastrous 1954, ugly across the board
- late launch of '55s, around February/March
- end of line for most EGB production facilities, sayonara Conner, bodies now Jefferson-built
- '55s are homerun, sales quickly take off, teething problems forgiven by enthusiastic public
- 1955 closes breakeven despite Jet, huge sigh of relief
- Nance orders '57 freshening of large cars (Panther's basic proportions were already similar to '57 GM C-bodies)
- Nance begins plans for all new large '59s
- Nance turns attention to Jet, targets major redesign for '57, longer/wider/lower bodies, OHV Six
- Nance watches Studebaker implode, waits for right moment
- Premature moment comes in early '55, Studebaker offers "merger of equals", Nance rejects, waits
- Final moment comes in late '55, Studebaker at bankruptcy's door, willing to do anything
- Nance doesn't want taint of bankruptcy on Studebaker, buys them before they go under, rock bottom $, no strings
- '57 Jet program quickly becomes Jet/Studebaker program
- Nance targets Jet production in Studebaker's best plants, w/Hudson unibody, upgraded Studebaker Six and V8s, all dependent on Union contract
- '57 Jet/Studebakers do OK then take off in '58/'59, blunting Rambler's potential
- '59 large Hudson/Packards do less well than expected but Nance's product diversification leads to overall success
- P-H-S becomes Big 4th with huge dealer network
- Nash, Ramlber or whatever they are called end up much the weaker for it all

Quote:

All the luxury brands had junior lines in the 30s. Cadillac had LaSalle, Lincoln had Zephyr, Chrysler had DeSoto. Packard was the only one that put the senior brand on the junior cars. Packard was going to do the 110 and 115. Creating or buying another brand for them would have prevented confusing customers about what a Packard was.

Auburn had never been a big company. In 1931 they sold 28,000. Sales fell to 11,000 in 32, 6,000 in 33 and 1848 in 36, the last year for the brand. The difference between Auburn and Clipper is that Auburn had provenance. Packard PR would hot have had to make up a story to explain to people what an Auburn was. They could have shown the Auburn history from 1900 on, with the stunning models designed by Alan Leamy and Gordon Buehrig.

So Nance acts:

- buys Hudson on December 1, 1953
- Investors agreeable to "Big Plan", see Nance as man of action, Mason as man of words only (...Mason furious!)
- all hands focus on 55's on common Hudson body shell with Panther's basic styling and proportions
- Hudson floorpan and unibody assembly carried over, jigs modified where possible, all else new

Not enough time. The existing senior Hudson platform had been around since 48. The way Frank Spring had designed it, it apparently was extremely difficult to restyle. Spring had also designed it with a very high beltline, resulting in small windows, while the trend in the mid 50s was to more glass area. A unibody platform for Packard and Hudson in 55, that was competitive, would have required time and money starting in 51-52.

The Packard platform was more in keeping with styling trends of the mid 50s. E Grand might have also been in better physical condition that Jefferson. Divert the differentiated styling elements that were planned for the Clipper to the Hudson, while the Clipper is upgraded to a short wheelbase Packard.

I really don't see a viable role for Studebaker. They could make a junior Hudson, to replace the Jet, but, in the mid 50s, there were not enough compacts being sold to keep the entire South Bend complex running, and, for reasons already discussed, it was impossible for Studebaker to offer a product that could compete with Ford and Chevy.

Steve203 - you make a good case and certainly there was value in the Auburn name and avoidance of confusion in the market. All this would have had to have been weighed against the value of the Packard. We only know that they chose Packard over "Macauley."

Whether is was the Auburn or Packard name chosen, my argument is that there still would have been confusion - inside Packard. They were only big and rich enough to do one vehicle architecture and only had one winning model that worked, the one that earned them tremendous wealth from 1924-29. It was based on a common platform churning out an entry luxury car and a premium one.

The luxury market having abrubtly shifted in pricing, technology and method of manufacture between 1930-35, the One Twenty effectively became their new entry luxury car. As the luxury market improved, its standard interior trim could have been upgraded to '37 CD levels, this was a lever Packard could pull fairly quickly.

Cadillac's last year for its large antiquated platform was 1937, Pierce's went down with the company in '38, Lincoln's was gone by '40. For Packard, to get their premium car common with their entry luxury car for 1938 would have been good timing. Waiting until 1940 as they did, and doing a less than convincing job with differentiation, lost ground to Cadillac between 1938-41 that was never recovered.

Re: Hudson and enough time...

It would have meant some long hours but yeah, they might have pulled it off. When OEMs say they need x number of years to develop a vehicle they often include the upfront market planning, architecture and facility studies. Packard and Hudson would have been past that point. Hudson knew their body architecture cold, having developed one for '48 and another for '53. They knew the assembly process cold. Everything was up and running.

On the design end, Packard had in the Panther a vision for what was to come. The fact that it would have been ahead of the competition should have been looked at by the leadership team as a good thing. Besides the beltline dropping, which Panther had, Steve has mentioned in past posts that any use of a Hudson unibody in the mid-50s would have required abandoning the heavy greenhouse pillars of old. I agree. That would have been the main challenge, creating what was effectivly a '57 Cadillac but on a unibody. Maybe the B-pillar had to stay. Fine, but it didn't have to look like a tree trunk.

The lead times we are really talking about were completion of clay surfacing, then tooling and pre-production builds, with testing happening all throughout. The company would have had about 14 months to do this, which I think that would have been enough time for that period. Look at how late Packard started the actual '55s, or the '51s. "All Overtime Approved - JJN" would have been the only ink stamp needed.

"I really don't see a viable role for Studebaker. They could make a junior Hudson, to replace the Jet, but, in the mid 50s, there were not enough compacts being sold to keep the entire South Bend complex running, and, for reasons already discussed, it was impossible for Studebaker to offer a product that could compete with Ford and Chevy."


Here's one way to have measured the usefulness of Studebaker at the end of 1955 and, for that matter, Hudson at the end of 1953.

Packard sold 300K units from 1946-49 and another 300K from 1950-53. In those same timeframes Hudson sold 500K and 350K of its larger cars, respectively, which was a tremendous pool of existing Hudson owners to target as repeat customers. And the Hudson buyers from 1948 on clearly liked their step-downs. To offer a step-down to existing Packard owners would have been a lessor risk than a taller body-on-frame Packard to Hudson owners.

With Studebaker it would have been more or less the same logic. From 1946-49 they sold 1M units, from 1950-55 another 1M units, and they had lots of dealers who had built relationships with their customers. Compare this to the number of Hudson Jets that would have been sold from 1953-55 had the model remained available. Probably 65K, being charitable. It's not unreasonable that Nance, as he thought about the next Jet, might have concluded that there was more volume potential in growing closer to Studebaker Champion in size. And he would have been watching Studebaker the whole time, knowing the size of their existing owner base, dealership base and volume potential. When late 1955 came and Studebaker finally conceded defeat, Nance would have already had his plans fairly well laid, the '57 Jet a year into development and a Studebaker front and rear clip easily created in time for new model intro.

At to why Nance would have considered moving Jet manufacture to South Bend, many elements would have been involved. The first would have been that a modern replacement for Jefferson production (both large and small cars) would have been squarely on his radar, the only question being when, which would have been driven by ability to afford. Everything would have hinged on the success of the '55 large cars. Had they done well - and by well I mean they would have sold triple what Packard actually produced in 1955, which a hot pair of cars might have done - then continuing to produce Jet in the same facility might have become a burden; i.e., Jet would have needed to find a new home.

The second element would have spoken more to the psychology of the Studebaker buyer. Was there something anti-Detroit about his motivations? If so, would have been a useful tool for Nance to exploit.

Finally, the city of South Bend might have proven quite generous to Packard. Today we know such enticements as tax abatements, etc. Back then I have no idea what went on but human nature being what it was and always will be, deal making was undoubtedly in the air.

<i>And he would have been watching Studebaker the whole time, knowing the size of their existing owner base, dealership base and volume potential.</i>

That is what Nance was doing. The Ward book talks about Nance ordering study after study of potential merger partners. He kept coming back to Studebaker, for the reasons you cite. Like the move to Conner, Studebaker "looked good on paper"

Take a look at Jet sales. iirc, Hudson only sold 21,000 Jets in the model's first year. Far more Aeros and Henry Js were sold in their first years. Second year Jet sales were something like 17,000. In comparison, in 54 Nash sold 36,000 Ramblers. The Jet was a dead duck. Barit knew it.

Studebaker could have done a cut down Champion to sell as a bottom end Hudson, but Studebaker volume was far below breakeven, too far for selling 20,000 compacts/yr as Hudsons to get them into the black.

Jefferson was in poor material condition. Roy Chapin told Langworth nothing had been spent on maintenance in 10 years, maybe 20 years. Best thing for Jefferson is close assembly immediately, then close the engine plant in a couple years as the Hudson engines are phased out, just as AMC did.

As for Hudson customers accepting a Clipper based Hornet, Hudson's clientle was already rejecting the step down by 53, so I would say there was little to lose. Even if the Clipper based Hudsons were rejected the way the Nash based Hudsons were, Packard still would gain the body plant, sevice parts business and dealers.

Many good points Steve203, thanks as usual. Permit me to comment on a few.

"Take a look at Jet sales..."

The 65,000 sales I mentioned included your numbers plus 27,000 "charitable" sales in '55, taking into account the industry's banner year and addition of Jet wagon series. It wouldn't have mattered had the sales been 20K less/more, the car was as you said, a dead duck. Its real value was in its basic architecture, which held the key to something very big for Nance because he could have morphed it into a vehicle sized similar to Champion, which for years Studebaker proved had huge sales potential.

"Studebaker could have done a cut down Champion..."

Most of Studebaker needed replaced... its platform, assembly line, most of its workforce and the entirety of its leadership. The rest was gold... its V8, its newer facilities, its dealers and all of its existing owners. The goal needed to be to retain these owners, capture lots of Wasp and Jet owners and chisel away at Ford/Chevy/Plymouth.

"Jefferson was in poor material condition."

Absolutely. On the other hand, if the product coming out was of high quality and the breakeven on a $2200-$2700 line of cars was only 70-80K, who cared? Hudson's system worked! Everything and everyone had a function, probably even the rats, knowing Barit. For 1955 Nance's priority needed to be breakthrough product, and there was more breakthrough potential in a heavily modified Hudson step-down unibody than a modified Reinhart high pocket.

"As for Hudson customers accepting a Clipper based Hornet, Hudson's clientle was already rejecting the step down by 53, so I would say there was little to lose."

Specifically, they were rejecting Hudson's old-fashioned late-40s design, inside and out. They loved step-down and unibody and history was on their side... the '57 GM C-bodies and '57 Fords and Mercurys were all step-downs and many cars to follow were unibody. Mason set the bar way too low, there was lots more to lose... hundreds of thousands of existing Hornet/Wasp owners, folks who would have gone hog wild over a modern design in 1955. I redid the Panther to give you a hint at what was possible... the Car of 1957 in 1955. (All due credit to Panther owner.)

Attach file:

---

  (47.22 KB)

Hi

Paul makes a good point: by 1953 both Packard and Hudson needed something bold and dramatic to bring them to the fore in the public's attention. Torsional-Level was great when one rode in it, which most wouldn't or didn't. A V8 engine was just catching up with the rest of the industry. New styling helped but every other maker had new styling too....not unique.

But, nothing would have caught attention like sedans and hardtops in the 55-57" overall height in a market of 60-62" tall competition. Only the '53 Studebaker Starliner and Starlight models were in that range. The rest of the market would wait until the 1957 Forward Look Chrysler line to such proportions.

If Packard and Hudson could have fielded such cars for 1955, the market response could hardly have been any less than was that for the 1957 Chrysler line....but hopefully with much better build quality!

Steve