Excerpts of minutes from February 11, 1963 meeting of Studebaker department heads.

ENGINEERING

1. Perkins Diesel Engine

The engine was returned last Wednesday. At sales’ request, engineering will put it in a 1963 model taxicab with an overdrive transmission. After Mr. Duncan, fleet sales manager, has used it for a while, sales wants the overdrive transmission removed and an automatic put in.

1. Post Office Van

Mr. Hardig has turned over all the information on one truck to Mr. McMahon. It has to be in for 2,112 units for the ½ ton by the 27th. The one for 3,391 units is due March 6. Mr. Hardig will have a meeting on the post office van tomorrow.

3. Yellow Dot Carburetor

This carburetor is supposed to start in production today. The reports from the engineering and service personnel who took the cars south have all been good. Mr. Challinor said if they come on schedule, they will be shipped from St. Louis to the depots on the basis of 2,500 for the first 2 weeks and then 3,000 or 4,000. They have to go from the depot to the dealer before they get to the customer. (There were 3,000 due last week, and we didn’t get any.)

4. High Performance Cars

The nameplate and grille ornament have been finalized, and we’ll get the answer today on the size of the grille medallion. The cars will be painted Avanti Red – enamel rather than lacquer. The F4’s (with carpet) will be about $3,000. Mr. Dredge asked that the public relations cars be painted Avanti Red if possible; otherwise, let them go through white, as originally specified.

5. Special 500 Trucks

This is still status quo – all work has been stopped.

6. Water Leaks

Engineering has released a baffle for around the rear door lock, which has been causing trouble; and on February 20, a cross-over rubber is due which should help.

7. Keys

Engineering released a brass ignition key to replace the aluminum in spite of the fact that brass is weaker: aluminum takes about 72-90 inch-pounds; whereas brass keys break at 32-40-45-60-72. This will mean 4½ to 5 cents per car. Dr. Lamberti pointed out that the design of the key is as important as the tensile strength. He and Mr. Hardig will look at it again, and the release may be cancelled. Chrysler and Studebaker are the only ones in the industry using aluminum.

8. Molding on Custom Models

About one month ago, the molding was eliminated on the inside and outside of the center post on the custom model. This was the result of a cost reduction program and means about $1.25-$1.30 per car. Mr. Chaires, our dealer in Florida, objected because his customer had purchased the car expecting to have the strips on it, so service airmailed two chrome strips to him. There have been other complaints also, but because of the savings, we will continue to produce without the strips.

9. 1964 Model Show

The paint and trim show will be at the proving ground on the 14th at 3:30 p.m. (depending on the weather). The paint cars will be lined up on the apron on the track, and the trim cars will be in the garage. There will be 9 trim setups in cars, and the rest will be setting on the floor. If the weather is bad, another time will be selected.

10. Fiberglass Prototype

Mr. Hardig is shooting for March 15 as the completion date. Mr. Bender will let him know what color they want it painted.

11. National Dealer Council

Mr. Hardig plans to show the dealers the clay model at their meeting February 28-March 1. (The right side of the model will be kept covered.)

12. Flange Axle

Mr. Hardig recommended that a flange axle be released for the ’64 model. He said Dana is absorbing all the tooling, and if we want it for ’64, we must tell them be Wednesday of this week. (They would be putting in 1½ million dollars of tooling.) There would be a penalty of approximately $1.70 for the 8-cylinder and approximately $2.50 for the 6-cylinder. Mr. Hardig remarked that if we don’t do it now, by 1964 or 1965 we will be the only ones who don’t have a flange axle. Mr. Challinor told of his conversations with Mr. Cutler of Chrysler and of Ford’s thinking on the flange axle. Chrysler claims costs have been reduced since they switched to the flange axle, and they plan to go across the board for ’64 or ’65, depending on amortization costs. Ford had manufacturing troubles at first, but now they are for these axles 100%. Mr. Hardig added that we don’t want to lose out on design improvements. Dr. Lamberti observed that we must keep the ’64 tooling costs in mind and make sure that everything we put in is exactly what we want, and make sure that anything added to the car is really needed to sell the car. We had to increase the price on the 1963 models.

13. New Piston

Mr. Hardig would like to release a new piston. It will cost $79,000-$80,000 for just the 6-cylinder piston, but he recommends that we do it right now. Mr. Challinor agreed that we need a new piston and estimated that we will pay for the change this year in service claims. Service gets claims beginning at 8,000 miles; they do a re-ring job, and at about 24,000 miles, they get the cars back again. The problem is predominantly in fleet-use cars where there is prolonged driving at high speeds. There isn’t as much trouble with taxicabs because they stay to lower speeds. The equipment Mr. Hardig mentioned will only take care of the 6-cylinder; the 259 and 289 will be tied in together. According to tests, the new piston cuts the oil consumption in half.

14. 1964 Model

Another 7 or 8 groups were released this past week, and engineering is releasing 3 to 5 groups per week. Of the major die models, 29 have been released. Mr. Hardig has a list, by weeks, on all critical pieces. It is all based on straight tooling time – 5 days, 40 hours per week – and based on having everything completed and in our plant by July 8.

MANUFACTURING

4. Scheduling – Avanti

The scheduling meeting will be February 20. Dr. Lamberti remarked that we are tentatively programming 36 Avantis per day, which represents about 750 per month. (The former schedule was about 900.) Mr. Egbert would like to see about 800 for March and April, and we can get the difference with overtime. Mr. Klausmeyer added that we will have people in by the 25th and will get the rate up at about that time. Mr. Bender observed that considering the current rate of travel, 500 per month seems about right to sales; and we’re sure 900 is out of the ball park. Dr. Lamberti commented that if sales doesn’t think we can handle more than 500, maybe we shouldn’t get the line speed up this high. We expect to hit 650 in February – which will really crowd the order situation, and many are old orders. Mr. Bender answered that sales is getting reports on the screening of the old orders, and they are issuing programs to the field on the Avanti. Mr. Bender will show some special programs at the meeting next week.

PARTS AND SERVICE

1. Avanti Points

Mr. Challinor reported that we finally got the last batch of points out of here last Friday afternoon. The delay was caused by a rejected shipment which had to be reworked and mailed in by air express. The whole field has now received the points, and we’re getting reports back from the northern part of the country that are favorable.

2. Rework and Repair

Mr. Challinor took exception to a letter written by Mr. E. M. Nash concerning Avanti units returned from field and/or driveaway lots for rework, and a general discussion followed concerning the quality of our product, as well as service.

a. Mr. Challinor indicated that we cannot get all the cars into local dealerships because we have too many, and some of the cars require special repairs which cannot be done elsewhere. We don’t have repair service available in the training center.

b. Mr. Klausmeyer mentioned that the situation was triggered by a cost element. He feels that manufacturing should help service with these cars; but since they have built a car that has met all inspections, if the car has to be rebuilt, the charge should be against service. We have had 20-30 Avantis brought in, and we’re not manned for this.

c. Mr. Bender commented that if a car has been out in the field, then there is no objection to the shop order; but a car on the driveaway lot is not a service problem.

d. Dr. Lamberti said we should analyze the total problem and put it into proper context. We are all interested in improving the total quality of the car. We have customers who exaggerate the problem, and we also get good letters from customers. We have complaints about the service in the dealerships, and some of the complaints that come in should not have come in. For 20-30 cars to come in out of roughly 2,000 in the field is not such a bad percentage. Recently a marketing analysis made by an outside firm found that 90% of the dealers have no fault with our quality. It is not a case of manufacturing not producing a quality car, and we want the group to understand that the majority of cars do come out in good shape – they might get the wrong impression, which can create an effect down the line.

QUALITY CONTROL

1. Avanti – Cracks

The quality control manager from MFG and his inspector who tests the bonding material are here to help us, and we’re doing everything we can.

2. Split Brake System and Self-Adjusting Mechanism

People have complained about the hesitation in the brake. Service is making a survey on this and engineering is working on it.

3. Safety Hood Latch

Mr. Capsey reported that the hood can be closed properly, and a bump or the right turbulence of air will cause it to bypass the safety hood and come open. He pointed out that the safety hood can be mispositioned by the way it is designed and suggested a change in configuration. Mr. Hardig said he still hasn’t had any hoods that opened for him, but he is still working on it.

PURCHASING

1. Crankshafts

Our supplier, Lyman-Gordon, will be out for 2 weeks in July for vacation, and we will bank cranks ahead. We will also start banking – just in case they have labor trouble. (Last time we had 13 weeks of it.) This is the only way we can protect ourselves unless we want to duplicate the dies for $150,000.

2. Steel

Competitors are banking steel. GM has asked Budd to carry a continuing 60-day bank. The last time Budd carried the bank for their customers, but this time they are going to ask their customers to pay for the steel bank. Dr. Lamberti asked Mr. Soelch for a report on Lyman-Gordon and Dana to see what we can do with steel – we need to look at how much money will be put into inventory.

INDUSTRIAL RELATIONS

3. Parking Lots

Last week a petition was entered signed by 125 exempt and non-exempt Administration Building employees complaining about the salaried parking lots. The causes for complaint were the difficulty in parking due to the fact that the lots had not been kept plowed out well and plant protection had not been keeping one lot locked until

4. Personnel Count

As of February 8, 1963: