When viewed from 1951, Studebaker was the independent automaker most likely to succeed. The South Bend, Indiana-based automaker generated unusually high sales by inventing the family-sized compact. This allowed Studebaker to invest in both a V8 engine and an automatic transmission well before any other independent. According to Detroit groupthink, these features were supposed to be crucial competitive advantages in the 1950s.
Studebaker was also the only independent that was a major player in both the passenger-car and truck markets.
Early-50s advertising made an aggressive effort to establish Studebaker as a low-priced alternative to Chevrolet, Ford and Plymouth. Pictured is a 1950 Champion (Old Car Advertisements).
So what went wrong? Automotive historians tend to put at the top of their list Studebaker’s high manufacturing costs. Also noted was a problematic 1953 redesign, which suffered both from quality-control issues as well as awkward styling for its bread-and-butter sedans. Add a brutally competitive buyer’s market in 1954 and a shaky dealer network, and you arguably have a combination of factors with the power to swiftly undercut Studebaker’s viability.
This narrative makes good points but has limitations. For example, historians invariably dredge up a Packard study alleging that Studebaker’s breakeven point was 282,000 units. This figure was eye-opening because it had been exceeded only once in sales — and was twice as high as Studebaker’s peak years during the 1930s and early-40s.
The Land Cruiser was a vestige of Studebaker’s past as a mostly premium-priced automaker. During the early-50s this top-of-line series represented around 11 percent of total output. Pictured is a 1950 model.
Studebaker executives disputed the Packard study’s figure (Hamlin and Heinmuller, 2002). Indeed, back in 1948 the automaker’s President Paul Hoffman had told a congressional committee that Studebaker could still make a profit even if its business fell more than 50 percent (Critchlow, 1996). If we apply that percentage to 1948 output, Studebaker’s breakeven point would have been somewhere around 90,000 units.
For the sake of discussion, let’s assume that the Packard study got closer to the truth. What could account for such a high breakeven point?
High labor costs tend to get too much blame
Some have primarily blamed high labor costs due to management’s decision to avoid pressing for contract changes with the United Auto Workers that would have brought the automaker’s labor costs more in line with the rest of the industry (e.g., Bonsall, 2000). Management feared a debilitating strike, which did indeed happen in 1955 after Studebaker merged with Packard and the company’s new head, James Nance, took a harder-line stance. (For discussion about Nance go here.)
Studebaker ads’ focus on workers coincided with an unusually amiable relationship with organized labor. Click on image to enlarge (Old Car Advertisements).
Aaron Severson (2010) offered the counterpoint that “Studebaker’s productivity levels had as much to do with the antiquated layout of the South Bend factory as with their UAW deal.” In addition, he suggested that “making nice with the UAW was not a bad strategy at all” because work stoppages could be crippling to such a small automaker.
Richard M. Langworth (1979, 1993) itemized Studebaker’s higher labor costs, noting that prior to cuts employees made 12-15 percent more than industry average. However, in a subsequent article he described the lengthy 1955 strike — which occurred during the then-biggest sales year in U.S. automotive history — as “the beginning of the end” for the automaker (1992, p. 30).
Severson’s argument, which is worth reading in full (go here), makes sense to me. I would add that the “blame labor” narrative doesn’t adequately take into account that Studebaker’s costs were significantly impacted by three other factors which tend to be downplayed or ignored by many historical accounts.
Three other factors boosted Studebaker’s costs
First, when World War II ended the automaker embarked on an overly ambitious expansion effort. That included increasing production capacity to 450,000 units by opening assembly plants in Ontario and New Jersey (Critchlow, 1996). Higher capacity translated into greater fixed costs than for independent automakers with more modest ambitions. This would prove particularly problematic once output collapsed in 1952-54.
Second, Studebaker’s development of both a V8 engine and an automatic transmission were expensive undertakings for such a small automaker. The obvious solution was to sell these components to other automakers. Unfortunately, management refused to make even its automatic transmission available (Langworth, 1979, 1993).
Third, Studebaker saddled itself with unusually high platform costs. The automaker completely redesigned its passenger car body in both 1947 and 1953 — twice as many times as other independents. Due to the huge pent-up demand for automobiles after World War II, Studebaker could have saved itself considerable money by squeezing a few more years out of its pre-war platform by giving it a reskinning, in a somewhat similar vein as Nash and Packard. Or it could have given its 1953 models a less complete redesign along the lines of the aborted Model N (Langworth, 1979, 1993).
The new-for-1953 coupes shared some parts with the family sedans, such as bumpers and windshield. However, they had a different cowl and sheetmetal. This substantially undercut Studebaker’s economies of scale (Old Car Brochures).
Just as importantly, Studebaker’s 1953 models included a line of two-door coupes and hardtops that used a much lower-slung body than its family sedans. Designers tried to save money by sharing some components such as bumpers. However, those savings were a drop in the bucket compared to the high cost of using different cowls and sheetmetal.
The styling of Studebaker’s family sedans and wagons suffered as long as they shared the basic look of the low-slung coupes. For example, the front of this 1955 wagon looks like an anteater.
This was a big deal. The Studebaker line had fewer interchangeable body parts than the Big Three’s sibling brands, such as a Ford and Mercury or Chevrolet and Pontiac. As a result, the automaker’s already limited resources were stretched to such a degree that it couldn’t keep either of its bodies up to date without allowing the other to lose its competitive edge. A downward spiral ensued.
Studebaker drifted from a successful market niche
Studebaker management made such big investments in new products and facilities because it expected postwar sales to substantially grow (Critchlow, 1996). In theory, that was a good bet. Between 1949 and 1955 total U.S. passenger-car production increased by a robust 36 percent. Unfortunately, none of the independent automakers — including Studebaker — benefitted from Americans’ greater appetite for cars.
“It’s a car free from bulging excess bulk that might squander your gasoline,” says 1950 ad. Click on image to enlarge (Automotive History Preservation Society).
Many of the forces working against the independents were outside of their control, such as suffering from a dramatic disadvantage vis a vis the Big Three when it came to economies of scale. However, Studebaker added to its woes by drifting away from its successful market positioning of the late-40s and early-50s.
In 1950 Studebaker achieved what was then a record for an independent automaker when output reached roughly 321,000 units. This was almost double the production of Nash, which at that point was the second-largest independent.
The key to Studebaker’s success was arguably that it had focused on offering a smaller, lighter and more economical alternative to the Big Three’s low-priced cars. As a case in point, the 1951 Champion was an inch longer than a Ford but three inches narrower and almost 400 pounds lighter in six-cylinder guise.
Studebaker prices were similar to equivalent models from Ford, Chevrolet and Plymouth. Advertising frequently referred to Studebaker as one of the “four low priced largest selling cars.”
As the 1950s wore on, Studebaker placed an increasing emphasis on its higher-priced, V8-powered models. Even more importantly, with each restyling the Studebaker body got bigger. By 1958 even the cheapest six-powered Champion was five inches longer, five inches wider and 145 pounds heavier than its 1951 counterpart. The Studebaker no longer offered a clear alternative to the Big Three.
1958 Studebaker ads used illustrations to make their cars look as low, long and wide as the Big Three’s. That didn’t help — even the ill-fated Edsel found more buyers (Old Car Advertisements).
New V8 undercuts Studebaker’s economy image
The big news for 1951 was the introduction of a V8. Despite teething problems that cost millions of dollars to fix, the engine was so popular that it sold almost as many as Studebaker’s sixes. That was quite a switch from the previous year, when the an inline eight represented only 21 percent of total production.
1951 ads emphasized that the new V8 was thrifty compared to others, but it was a veritable boat anchor in such a light car. Click on ad to enlarge (Old Car Advertisements).
Studebaker’s V8 was unusually heavy. As a result, the 1951 models equipped with one were less than 50 pounds lighter than equivalent Ford models. This translated into nose-heavy handling and less-than-stellar gas mileage. That, in turn, undercut Studebaker’s traditional competitive advantages over Ford, Chevy and Plymouth.
Studebaker apparently spent too much money elsewhere to keep its six-cylinder engine competitive. By the mid-50s the automaker’s L-head design had become so antiquated that management gave up trying to update the engine and instead sought to buy sixes from American Motors. That request was rejected. AMC said that it didn’t have enough capacity due to an expected sales increase. Patrick Foster (2008) has quite rightly questioned that explanation, pointing instead to conflict between Nance and AMC head George Romney.
Rambler output for 1956-57 did not meet internal expectations, but it was almost twice as high as Studebaker’s production of six-cylinder models in 1956 and more than three times as high the following year. Note that for 1956 the Rambler was upsized to the degree that it now was almost as roomy as the 1946-52 Champion. Studebaker basically walked away from the family compact market and AMC took it over.
The irony of Studebaker being the first independent to offer a V8 is that it didn’t really need one to be successful in the family compact field. Updating the six would have been a much better investment in the early-50s.
Studebaker tries to compete directly against Big Three
After Studebaker merged with Packard in 1954, new management set out to compete model-for-model against the Big Three. A major part of the plan was to switch Studebaker to a full-sized platform shared with Packard and a newly created Clipper brand (Hamlin, 2002). The new platform did not reach production because of the automaker’s mounting financial difficulties.
As a stopgap measure, designers tried to make the existing Studebaker body look as large as its Big Three competition. There was only so much you could do with such a narrow car, so advertising in the second-half of the 1950s tended to use illustrations that made Studebakers look bigger than they actually were.
As a case in point, 1956 advertising emphasized the “longer, wider, bigger” size of Studebaker’s family cars, which received new front and rear sheetmetal. It didn’t work. Between 1955 and 1958 sales slid to the point that Studebaker’s lenders almost pulled the plug on automotive operations (go here for further discussion).
Ads described the 1956 Studebaker as “a big new choice in the low priced field” that offered “the longest wheelbase — 120.5 inches — and the biggest power — 210 hp — in its class” (Old Car Advertisements).
In contrast, AMC sales boomed in the late-50s, mostly on the strength of its six-passenger compacts. Instead of trying to compete with the Big Three, the Rambler was explicitly marketed as a compromise between the roominess of an American car and the economy of an import.
American Motors CEO George Romney described the new-for 1956 Rambler as a six-passenger family car that offered a more efficient alternative to the “gas-guzzling dinosaur.” Click on image to see enlarged full ad (Old Car Advertisements).
These two ads show fundamentally different corporate directions. Whereas Nance wanted to concentrate on full-sized cars, Romney phased out the big Nash and Hudson in favor of the compact Rambler.
AMC’s strategy directly challenged Detroit’s bias toward bigger, glitzier and more powerful cars, but it paid off. By 1961 the public became so enamored with Rambler’s practical, space-efficient cars that the brand edged out Plymouth for third place in sales. That could have been Studebaker if it had stayed the course.
This customized 1950 Studebaker Starlight coupe highlights the controversial propeller-nosed front end and the “which way is it going” greenhouse styling by Raymond Loewy’s consulting firm.
Studebaker didn’t make a serious effort to shift back to its early postwar formula until 1962, when the stubby Lark was stretched and given higher-end models. By then it was too late. Studebaker’s sedan body was too ancient to be competitive in the passenger-car field (go here for further discussion).
Studebaker was the granddaddy of family compacts
The 1947-52 Studebaker’s greatest historical significance is not its iconic styling. More important is that the automaker pioneered what, for lack of a better term, I have called the family compact. These are cars based upon a compact platform but have a stretched wheelbase for added rear-seat room and trunk space. A more recent example is the 1963 Dodge Dart, whose exterior dimensions and weight were fairly close to early postwar Studebaker Champions.
The Studebaker’s body was under 71 inches wide, which was typical of compacts from the 1950s onward. However, its wheelbase was longer than the Hudson Jet and Willys Aero, which ranged from 105 to 108 inches. The 1947-49 Champion — which was Studebaker’s entry-level economy model — had a 112-inch wheelbase, which was extended to 115 inches in 1950.
As a point of comparison, the 1950-55 Nash Rambler two-door models were on a 100-inch wheelbase. This allowed them to be more than 20 inches shorter and 250 pounds lighter than the Champion.
The Rambler may have had an advantage when it came to maneuverability and gas mileage, but the Studebaker could comfortably fit six passengers. This may go a long way toward explaining why the Champion — which was only available with six-cylinder engines — outsold the Rambler through 1954.
The Rambler may have outsold the Champion for the first time in 1955 partly because of the UAW strike at Studebaker. However, it was also likely the result of of AMC having cut the Rambler’s base price and adding four-door models on a stretched wheelbase the previous year. While not as roomy as the upsized 1956 Rambler, the 1954-55 models were roughly comparable to the compact Willys Aero and Hudson Jet — and less expensive.
The 1950 Nash Rambler may have been partially inspired by the Starlight coupe. The Studebaker’s popularity suggested that the public would buy a smaller car — and even pay a bit more for it than the low-priced three — if it was stylish.
Our fake design downsizes the Starlight coupe
Basically, the Rambler ended up eating Studebaker’s lunch. By the time Studebaker management figured that out, it was too late. The tragedy is that Studebaker could have cut Rambler off at the pass in the early-50s.
To see what I mean, let’s compare the real 1951 Studebaker Starlight coupe shown in the next photograph with a photoshopped version below it. The fake Starlight’s wheelbase has been cut to 108 inches and the length to 186 inches. That’s within the same ballpark as the 1954-55 Rambler four-door models.
A real and a fake (bottom image) 1951 Studebaker Commander Starlight coupe (base image courtesy Old Car Brochures)
Our fake Studebaker has revised proportions that arguably better fit a compact. The C-pillar and deck are shortened to reduce the awkward “fish tail” proportions, and a lower greenhouse offers a width-to-height ratio more in keeping with such a narrow body. Additional changes are made to clean up the busy styling. For example, the character lines on the front fenders are extended and the outboard rear fenders moved upward.
Even without some of these changes — including the reduced height — the basic Studebaker body lent itself to a shortened compact version. This could have been a crucial advantage in the early-50s. Among the independents, Studebaker had the only passenger-car platform flexible enough to be used for both a larger and a compact car.
Kaiser was in a better position than Studebaker to offer a sporty coupe because its family cars had a low beltline. Meanwhile, Studebaker’s body was better suited for a compact because it was five inches narrower (Old Car Brochures).
The Studebaker body’s flexibility was important because none of the independents sold enough cars in the early-50s to make money fielding two distinct platforms. Yet Nash, Hudson and Kaiser took the risk of introducing compacts while trying to maintain entries in the full-sized field. None succeeded.
Studebaker didn’t think the public wanted compacts
In 1959 Studebaker finally offered a compact by chopping more than two feet from its family car body. Despite initially good sales the Lark proved to be too little, too late. Click on image to enlarge (Automotive History Preservation Society).
Unfortunately, Studebaker never offered both larger and compact cars at the same time. With the introduction of a V8, the 1951 models represented the beginning of South Bend’s shift to bigger, glitzier and more powerful cars. This was intentional. “There is no evidence that the American public will buy the light, cheap car in volume,” insisted Hoffman (Critchlow, 1996; p. 144).
Studebaker management was only following Detroit groupthink. Even in late 1955 the automaker was deemed by Wall Street to have stronger prospects than American Motors because of the latter’s increasing focus on compacts (Critchlow, 1996).
It’s too bad that George Romney didn’t end up running Studebaker. The architect of the Rambler’s success could have pointed the South Bend automaker in a better direction.
NOTES:
This is an expanded version of a story originally posted July 20, 2014. Market share for brands were calculated from figures listed in Wikipedia (2013). Market share and production figures for individual nameplates were calculated from base data from the auto editors of Consumer Guide (2006) and Gunnell (2002). All data is supposed to be for model rather than calendar years. In instances where data from one source appeared to be erroneous, data from the other source was substituted. Dimensions are from the Classic Car Database (2014).
The graph with Studebaker versus Rambler production does not include output from the 1958-61 American in order to make a more apples-to-apples comparison.
Share your reactions to this post with a comment below or a note to the editor.
Hamlin, George; 2002. “The Last of the Marque: The Fifty-Seventh and the Fifty-Eight Series 1957-1958.” In Kimes, Beverly Rae, ed., pp. 622-635. Packard: A History of the Motor Car and the Company. Automobile Quarterly Publications.
Hamlin, George and Dwight Heinmuller; 2002. “America’s New Choice in Fine Cars: The Twenty-Sixth and the Fifty-Fourth Series 1953-54.” In Kimes, Beverly Rae, ed., pp. 562–581. Packard: A History of the Motor Car and the Company. Automobile Quarterly Publications.
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1 Comment
With Studebaker’s missteps in mind, what was Packard’s big mistakes and what baggage of their own did they bring along when they merged to become Studebaker-Packard?
Being on the other side of the Atlantic, am aware Packard was once a prestigious marque though know little else apart from their V8 being capable of very large displacements as well as forming the basis of an unrealised post-war 90-degree V12 project during the 1950s as mentioned in Karl Ludvigsen’s book on the V12 engine.
Also had both Studebaker and Packard avoided their respective missteps to become thriving companies prior to their merger, how would a later acquisition of International Harvester (that itself agreed to acquire Checker Motors beforehand) have benefited the resultant combine in relation to AMC?
Rather unfortunate Studebaker did not properly update their Sixes nor properly developed their V8 to be a near-precursor of sorts to the SBC, the latter in turn allowing the possibility of a Studebaker analogue of the GM 90-degree V6 in the event they still opted not to produce a factory 202 V8.
Drawing inspiration from IH’s People-Mover and SUV projects as well as the “Brooks Stevens’s 1965 Studebaker Lark concept: Almost a baby Continental” article, it would have been enough for the company to become something akin to a US equivalent of the Swiss Monteverdi specialty automaker (albeit at higher volumes compared to Monteverdi) meets JLR? At least based on the Fissore styled IH Scout-based Monteverdi Safari and Dodge Aspen-based Monteverdi Sierra.
With Studebaker’s missteps in mind, what was Packard’s big mistakes and what baggage of their own did they bring along when they merged to become Studebaker-Packard?
Being on the other side of the Atlantic, am aware Packard was once a prestigious marque though know little else apart from their V8 being capable of very large displacements as well as forming the basis of an unrealised post-war 90-degree V12 project during the 1950s as mentioned in Karl Ludvigsen’s book on the V12 engine.
Also had both Studebaker and Packard avoided their respective missteps to become thriving companies prior to their merger, how would a later acquisition of International Harvester (that itself agreed to acquire Checker Motors beforehand) have benefited the resultant combine in relation to AMC?
Rather unfortunate Studebaker did not properly update their Sixes nor properly developed their V8 to be a near-precursor of sorts to the SBC, the latter in turn allowing the possibility of a Studebaker analogue of the GM 90-degree V6 in the event they still opted not to produce a factory 202 V8.
Drawing inspiration from IH’s People-Mover and SUV projects as well as the “Brooks Stevens’s 1965 Studebaker Lark concept: Almost a baby Continental” article, it would have been enough for the company to become something akin to a US equivalent of the Swiss Monteverdi specialty automaker (albeit at higher volumes compared to Monteverdi) meets JLR? At least based on the Fissore styled IH Scout-based Monteverdi Safari and Dodge Aspen-based Monteverdi Sierra.