Curbside Classic commentator Steve (2018) has argued that Nash-Kelvinator should have combined with Studebaker rather than Hudson for an interesting set of reasons. He effectively follows the advice of Aaron Severson (2024), who recently suggested that auto history counterfactuals would be more relevant if they focused on “capital investment and production logistics” rather than design, engineering and product-planning choices.
Steve (2018) argued that combining with Studebaker would have given Nash a “V8 and South Bend foundry, machine shop, stamping plant and proving ground. Then Nash could have avoided buying the foundry in Sarnia, avoided dealing with the issues of the Packard V8, avoided the cost of producing the Potter V8 and avoided the shipping costs from the stamping plant in West Virginia, and Vance and Hoffman were both willing to step aside and let Romney be the big cheese.”
This is an unusually sophisticated argument for a comment thread, but it has some holes in it. Let’s briefly discuss them.
Studebaker’s production facilities had disadvantages
Patrick Foster reported that Nash-Kelvinator head George Mason specifically did not include Studebaker in discussions about a potential grand merger “because that firm had the highest labor costs in the industry and was solidly entrenched in South Bend, Indiana, which would have posed a problem if production had to be consolidated into the Detroit or Kenosha, Wisconsin plants — a likely scenario” (2017, p. 125).
If anything, Foster was understating the production-logistics mismatch between Nash and Studebaker. For one thing, consolidating production fairly quickly would have been important to the survival of the new combine. Moving all passenger-car production to Studebaker’s South Bend facilities was arguably a poor option for two reasons not mentioned by Foster:
- Studebaker’s factory was reportedly configured in such a way that it could only produce cars that were narrow like compacts. If that was indeed the case, the big Nash would have needed to be immediately dropped. That went against Mason’s plans for continuing to build both compact and big cars. Even his successor George Romney kept big cars around until 1958.
- Nash’s entire lineup used unitized construction, which was an important engineering advancement over the Studebaker’s body-on-frame construction. The problem was that unitized cars required a somewhat different assembly process, so the South Bend plant may have needed costly retrofitting in order to build even compact Nash Ramblers.
Studebaker’s losses could have overwhelmed savings
Another factor that may have worked against a Nash-Studebaker combine could have been the latter company’s dire financial situation. Whatever money Nash might have saved by getting immediate access to a V8 engine could have been washed away by Studebaker’s mounting losses.
This brings up an interesting point. Historians such as James Ward (1995) have criticized Packard head James Nance for not insisting on an audit of Studebaker’s books before agreeing to a tie up. This was in contrast to Nash and Hudson, where Foster noted that “auditors went over each other’s books with a fine-tooth comb” (2008, p. 94). If Nash had done the same thing with Studebaker, might it have walked away after finding out how much money the automaker was losing?
A counterpoint to all of this negativity was that shutting down Studebaker’s passenger-car production by the end of the 1954 model year and shifting to a Kenosha-built, passenger-car lineup could have stopped a key source of losses. But even so, a Nash-Studebaker combine might still not have penciled out as well as a Nash-Hudson tie up from either a production-logistics or a capital-investment standpoint.
Product overlap would have also needed solving
If the idea of a Nash-Studebaker combine made it this far, another consideration that could have tanked it was the amount of product overlap. This raised difficult questions when looking at ways to consolidate platforms.
The path of least resistance might have been to treat Studebaker similarly to the way that Hudson was handled when American Motors was formed in 1954. For 1955 all domestic production was shifted to Nash’s Kenosha plant. The big Hudson became a facelifted Nash and it was augmented in Hudson dealers with rebadged compact Ramblers. Over time the Rambler became the dominant brand and the Nash and Hudson dealer networks were integrated.
Also see ‘1955 1/2 Studebaker President struggles to keep up with competition’
Under that scenario, Studebaker’s long-term prospects for survival could have been limited to a line of trucks. They were reportedly made in a separate plant from passenger cars, so they presumably could have continued to be built if passenger-car production ceased in South Bend.
Perhaps the biggest wild card could have been what to do with the low-slung Loewy coupes. They plausibly could have been produced in a smaller plant, such as alongside trucks. However, then the new company would have had to somehow find the development dollars to keep the design up to date. That could have been challenging.
It wasn’t a crazy idea — but not the most promising
Let’s assume for the sake of discussion that the above scenario played out relatively smoothly. By 1958 the automaker could have fielded a lineup of compact Ramblers and Studebaker trucks through an integrated dealer network.
Rambler sales might have ramped up more quickly — and led the company to start generating a profit earlier — simply because it would have had less direct competition than if Studebaker were still an independent automaker battling it out in the same price class.
Also see ‘Why did the Nash-based 1955 Hudson sell so poorly?’
In addition, gaining a foothold in the truck market could have helped to diversify Nash’s revenue sources (although it would have also siphoned away development dollars that overwise could have been focused on the Rambler).
So at least in theory, Steve’s idea isn’t crazy. Perhaps it didn’t get more traction because a Nash-Hudson tie up appeared to be an easier lift than the challenging politics of quickly shutting down the passenger-car operations of a competitor that until recently outsold Nash.
NOTES:
Specifications and production figures from Flory (2009).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Flory, J. “Kelly” Jr.; 2009. American Cars, 1946-1959: Every Model, Year by Year. McFarland & Co.
- Foster, Patrick R.; ——–; 2008. Studebaker: The Complete History. Motorbooks International, Minneapolis, MN.
- ——; 2017. George Romney: An American Life.Waldorf Publishing, Grapevine, TX.
- Severson, Aaron; 2024. “Not So Cuckoo After All.” Ate Up With Motor Patreon site. Posted Aug. 12.
- Steve; 2018. Commentator in “Curbside Classic: 1961 Rambler Classic – Classic Rambler.” Curbside Classic. Posted Aug. 17 at 8:11 am.
- Ward, James A.; 1995. The Fall of the Packard Motor Car Company. Stanford University Press, Stanford, CA.
ADVERTISING & BROCHURES:
- oldcaradvertising.com: Studebaker (1954, 1958)
- oldcarbrochures.org: Hudson (1955); Nash (1954)
Only a grand Nash, Studebaker and Hudson merger could had a potential at tye specific scenario. The combined Nash, Hudson sales and their financial power could had been the catalyst at the above politics issue (how a smaller seller can shut down its bigger competitor; ie the non trucks division of Studebaker).
Then Aero Willy’s was the best match for the Packard so as to avoid the clipper brand (bottom and top end of the market).
As the history have proved itself many times (Edsel during 1950s, Oldsmobile and Mercury in the recent modern automotive era), the premium brands (such as Studebaker or Clipper) are a lost cause. Lada, Dacia, Rolls Royce, Mercedes still exist; premium Chrysler is into the intensive care for nearly 4 decades). The premium brand can only survive with a single model strategy, preferably a sport one (Hudson Hornet, BMW in the 1960s, the Dodge of today)
I do not know if the data is available but would think that a notable consideration of these hypothetical mergers would be the dealership footprint. How many, how much overlap, locations and quality/strength of the dealers?
Studebaker would have dragged down Nash, just like it did Hudson, unless, as the article notes, Nash simply closed the South Bend plant and turned Studebakers into rebadged Nashes.
Studebaker pickups didn’t do Studebaker-Packard much good, and I doubt the result would have been much different for Nash. By the late 1950s, the Big Three were spending more money to redesign their pickups. Nash-Studebaker would have had to allocate development dollars to keep the trucks competitive – money it really didn’t have.
AMC ended up with Jeep anyway, which was arguably a better fit. Jeeps were a much more effective competitor to Chevrolet/GMC, Ford and Dodge than Studebaker trucks were.
I meant that Studebaker would have dragged down Nash, just as it did PACKARD.
I know Studebaker did build 2 1/2 ton trucks in WWII, so I’m sure there was a separate truck package. I know Nash puttered around with trucks post war. They made a couple mprototypes and did make a medium duty truck form export (!). In the US they were mostly tow trucks for ash dealers.
I mean factory, not package.
Gerber, l must point out that prior to 1963, when Jeep brought out the Wagoneer and the J10 pickup, they were still trying to sell products that looked very much like the same products they brought out in 1946! The pre-’63 Jeep trucks (l’m not referring to the CJ’s) were NOT much competition for Big 3 trucks – or Studebaker. Their chief claim to fame was their four-wheel drive models. And they were woefully under powered with no V8 engine (hence the aftermarket availability of many engine conversion kits – even to Stude V8s).
The Wagoneer and J10 were sensational additions to their product line. Prior to that, the big news was their cab-over FC! How was Jeep an effective competitor when Studebaker and the Big 3 did not, for the most part, even offer products that were competitive with it?
It was just a part of a model year later in ’63 that Studebaker shut down it’s truck production, so the “new” modern Jeep offerings and the Stude trucks were not in the marketplace simultaneously except for a matter of months.
Studebaker’s 2R series trucks were introduced in early 1948 as ’49s and were so advanced and well received that an update did not have to happen until 1954. Unfortunately, after the financiers rejected Nance’s need for funds in 1956, S-P had virtually no ability to bring out totally new products.
l’d like to add the fact that much of the merged corporation’s upper management was from the Packard side (Studebaker employees complained about this) and they “forgot” they had a truck division, or paid it scant attention.
I should have said that Jeep stayed in business by not competing directly with the Big Three’s truck offerings. That’s one reason why Jeep is still around, while Studebaker is long gone.
Even if Studebaker-Packard management had remembered that the corporation had a truck division, there wasn’t any money to give the trucks the update they desperately needed by 1956.
It’s telling that, just as Studebaker was shutting down production of both cars and trucks, Jeep introduced a new line of vehicles that were so good they would remain in production for over 20 years, and essentially keep AMC in business after the Pacer and Matador coupe debacles. And those vehicles competed directly with the Big Three offerings.
Unfortunately my answer to the subject question is: maybe no and l don’t know. George Mason was a smart man and l’m sure he had a plan that made sense at the time.
A Nash with a Studebaker V8 engine sounds good, but a Studebaker with “enclosed” wheel wells sounds bad. Just kidding about the wheel wells, but Studebaker didn’t “need” a unibody any more than Nash needed a ladder frame. Both companies executed their car construction competently, and both were reliable and economical, which were top-of-the-list “wants” in the days before the baby boomers arrived.
If the 120 inch wheelbase Studebaker coupes would have been “axed” , or never even produced, that would have been a real shame.
The bugaboo in the various possible combinations of independent American automakers seem to me to be their type of construction (as well as the competence and egos of the younger executives). The right thing happened. Unibody company absorbed unibody company and ladder frame company merged with ladder frame company. Hudson was probably a lost cause and a competent Nash management seemed to treat it that way. The Studebaker-Packard merger was just handled poorly.
The key year for consolidation was 1948 ! Packard and Hudson combined in 1948 with the new “Step-down” and a reimagined Packard (not the “bathtub”) which could have been held back to 1949 would have been ideal. Neither Detroit car necessarily needed a V-8, and manufacturers kept developing their existing sixes and eights until 1955. Automatic transmissions were much more important in passenger cars between 1948 and 1955, in my opinion. George Mason and George Romney could have made a merger between Studebaker and Nash work, but only if Studebaker had been merged before 1952 and the brand limited to only trucks built in South Bend. Nash could have continued in Kenosha and Studebaker building only trucks would have made both Studebaker and Nash dealers very happy.
The biggest problem for brands that were not Chevrolet and Ford were that so dealerships of long-standing (pre-W.W.II) were beloved for their antiquity, but out-of-date for their showroom capacities and service facilities, even in heavily urbanized areas. For example, from my childhood, using Indianapolis as a reference point, the migration from downtown to newer dealerships in areas along major thoroughfares near the suburbs began in 1955 and expanded quickly once the inner-city interstate highways were routed through many of the downtown dealerships and car lots.
Unfortunately for the Chrysler Corporation and A.M.C., their dealers were among the last to migrate out of the downtown area. I believe that modern dealership facilities after 1955 was one big factor that bogged down brands that lacked those up-to-date accommodations.
I find it a problem when Studebaker’s problems focus on “highest labor costs” in the business. This always comes from the managers who were involved in the company as it was failing. These managers never take responsibility for the over state of the company, but why should they? Because the collapse was on their watch and examination of the company means they failed. I found a very interesting article in an earlier article on this web site in Car Life, March 1964. It is online on the website for a association of auto historians (I don’t recall the name). That article pointed out that there were too many managers, a problem Packard also had, who were there only to get a check (aka deadwood). The Studebaker dealers covered only 30% of the country, and those dealers would not negotiate prices to move product. This is a failure of management not running the business as it should. Neither Studebaker nor Packard had any idea of how to develop and grow managers into the next generation of leaders. So while the factories were not flexible or labor was expensive, if the system is not set up to move product it will fail. There are other big mistakes made by these two companies as well as the environment being very rough. Like the price war and the Defense Dept. pulling a large contract, certainly made it more difficult. But at the end of the day its about leadership and running the company to succeed.
There was also a very cool article in the Feb. 64 issue of Car Life. One of their authors helped assemble a Studebaker Daytona from start to finish that prior October, before the shutdown. The standout is that the car had an R-4 engine and was to be an engineering test car. I wonder where it is now.