March 23, 2006

Today in Automotive History

1956 Studebaker-Packard looks for a merger

The Studebaker-Packard Corporation halted merger talks with the Ford Motor Company to pursue talks with the Curtiss-Wright Corporation. Studebaker-Packard itself was the result of a merger in which the large Studebaker firm merged with the small and successful Packard line. After World War II the independent car manufacturers had a difficult time keeping pace with the production capabilities of the Big Three, who were able to produce more cars at lower prices to meet the demands of a population starved for cars. Independents began to merge with one another to remain competitive. Nash-Kelvinator and Hudson Motors merged successfully to become American Motors (AMC). Paul Hoffman, the manager of Studebaker, realized his company would have to merge or perish. He negotiated an arduous merger between his company and Detroit-based Packard Motors. The merger took over five months to come through, as unionized labor on both sides balked at the proposal. Finally, in October of 1954, Studebaker and Packard merged to become the country's fourth largest car company. Hoffman chose Packard President James Nance to lead the new operation. Nance, spiteful of the inefficiency that Studebaker brought to his company, generally ignored the input of his colleagues, instituting his own policies in an attempt to turn around the fortune of his new company. His policies failed, and renewed labor problems brought Studebaker-Packard to its knees. In 1956, Curtiss-Wright purchased Studebaker-Packard. The failed merger between Studebaker, which had been in operation since the 1890s, and Packard was emblematic of the post-war independent manufacturers' scramble to consolidate. While Studebaker-Packard failed, AMC was able to stay alive into the 1970s, when it was bought by French giant Renault

Posted by Quality Weenie at March 23, 2006 08:10 AM | TrackBack