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Studebaker-Packard Corporation
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The Studebaker-Packard Corporation was the entity created by the purchase of the Studebaker Corporation of South Bend, Indiana by the Packard Motor Car Company of Detroit, Michigan, in 1954.
Packard acquired Studebaker in the transaction. While Studebaker was the larger of the two companies, Packard's balance sheet and executive team were stronger than that of the South Bend company.
It was hoped that Packard would benefit from Studebaker's larger dealer network.
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Encyclopedia
The Studebaker-Packard Corporation was the entity created by the purchase of the Studebaker Corporation of South Bend, Indiana by the Packard Motor Car Company of Detroit, Michigan, in 1954.
Packard acquired Studebaker in the transaction. While Studebaker was the larger of the two companies, Packard's balance sheet and executive team were stronger than that of the South Bend company.
It was hoped that Packard would benefit from Studebaker's larger dealer network. Studebaker hoped to gain through the additional strength that Packard's cash position could provide. Once both companies stabilized their balance sheets and strengthened their product line, the original plan devised by Packard president James Nance and Nash-Kelvinator Corporation president George W. Mason was that the combined Studebaker-Packard company would join a combined Nash-Kelvinator and Hudson Motor Car Company in an all-new four-marque American Motors Corporation.
Had the complicated set of combinations gone through as planned, the new company would have immediately surpassed the Chrysler Corporation to become the third of America's "Big Three" automobile manufacturers. However, the sudden death of Mason, the selection of the disinterested George W. Romney as his successor, and disputes over parts-sharing arrangements between the companies doomed any chance of completing the proposed merger. This failure to combine the companies effectively sealed the fates of all four.
Packard executives soon discovered that Studebaker had been less than forthcoming in all of its financial and sales records. The situation was considerably more dire than Nance and his team were led to believe; Studebaker's break-even point was an unreachable 282,000 cars at a time when the company had barely sold 82,000 cars in 1954. Furthering the new company's problems was the loss of about 30% of Studebaker's dealer network by 1956.
Following a disastrous sales year in 1956, S-P entered a management agreement with the Curtiss-Wright Corporation. C-W, led by Roy T. Hurley, insisted on major changes. All of S-P's defense contracts and plants where defense work was carried out were picked up by Curtiss-Wright, Packard production in Detroit was stopped and all remaining automotive efforts were shifted to South Bend. The Packards (for 1957 and 1958) were essentially Studebaker Presidents with excessive amounts of bright work. The vehicles were referred to as Packardbakers by comedians. The final Packard rolled off the assembly line in July 1958.
The one bright spot to come of the company's troubles was a distribution agreement, brokered by Hurley, with Daimler Benz. The agreement was looked on as a necessity both for the income that Mercedes-Benz could add to the company's bottom line and as another product that the increasingly disgruntled Studebaker dealer network could sell in the event that the company quit building its own cars.
Studebaker-Packard Corporation made one last stab at resurrecting the Packard nameplate. The Franco-American Facel-Vega four door sedan, which was powered by a Chrysler V8 engine, would have been rebadged as a Packard. The plans fell through when Daimler Benz demanded that Studebaker-Packard cease with the plans or risk termination of its sales agreement to sell Mercedes-Benz cars.
In 1960, the company began diverisfication efforts by buying:
- D.W. Onan & Sons - Generators
- Cincinnati Testing Labs - Plastics Research
- Gering Plastics - Plastics Manufacture
- Clarke Floor Machine Company - Fork Lifts, etc.
- Gravely Tractors - Quality lawnmowers
- Chemical Compounds Company - Maker of STP additives
In 1961 Sherwood Egbert was hired to be the company president. He was expected to help diversify the company. In the spring of 1962, four years after the last Packard car rolled off the assembly line, and eight years following the merger between Packard and Studebaker, the company dropped Packard from its legal name and reverted to the Studebaker Corporation name.
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