Minutes of April 22, 1963 meeting of Studebaker department heads.

STAFF MEETING – April 22, 1963

ENGINEERING

1. Perkins Diesel

We met with the people from Perkins last Tuesday. We’ll send a ’63 cab to Detroit on the 29th, and they will take the engine out of the ’62, update it, reinstall it in the ’63, and send it back to South Bend on May 15. They will install another diesel engine with an automatic transmission in the ’62 body – and we should have that back June 1. They expect to receive the 10 engines on June 1, and we will probably get them about June 15 so that we can start working on them. There will be 5 with 3-speed floor shift and 5 with automatic. We will install them here in South Bend and Perkins will send down a couple of people to help with the installation of their components. We will try to get 3 of them finished as quickly as possible. We won’t be able to cost this engine until we start building the 10. We’re going through the figures right now, but it will be the 10th of May before they will have the cost on the parts that Perkins will supply in addition to the engines. We worked out a list last Tuesday as to who will supply the items, but that could change. Mr. Dredge asked about the possibility of a passenger car diesel for ’64 and about getting some Press on the taxicab. Dr. Lamberti suggested that PR not issue any releases on passenger cars on this until we are closer to having some; and Mr. Hardig added – in connection with the taxicab – that one will be sold on June 1, but the cabs won’t be available until sometime in the fall. We have thought they would be available about the date of the introduction of the ’64 line – it depends on Perkins. Mostly, the development has been done on the 3-speed shift, but since the taxicab operators want automatic, we have been working on that. By May 10, we should have a better idea of when this will be available. Mr. Hardig said the vibrations are not excessive, and on fuel consumption, it is 50% better than gas – by actual mileage. Mr. Detzler observed that the noise level has been drastically reduced, and Mr. Challinor remarked that we have a lot of testing to do on this before we have a passenger car.

2. New Interior – Avanti

Mr. Hardig reported that we’re starting to release a new, all-black interior trim, along with wood graining on the overlay of the instrument clusters and on top of the console. We’re trying to get it released as fast as we can so that we can get them through production. Dr. Lamberti added that we may also have a car that is all red. Messrs. Lamberti and Hardig gave some details re the changes:

We will drop the perforated material; we’re trying to reduce the combinations, and getting rid of the perforated material is half the problem because it is offered across the board. We’ll use up the fawn material and other material – depends upon our commitments, which we are investigating now. In other words, these will be in addition to our present combinations, and we will drop the present models as the material on hand is used up. We’re running off about 35-50 blacks right away and getting them out to the zones, which should be a minimum of 2 weeks.

Mr. Dredge asked if this is far enough along for a story, and Dr. Lamberti replied that Sales doesn’t want a story on this because it might stop people from buying what is presently available. A discussion followed concerning the wood graining on the steering wheel, and the following points were covered.

a. Recognizing that the steering wheel has been approved, Mr. Detzler wished to express his personal opinion: he thinks the wood graining looks “chintzy.” One look at it and it looks artificial – like a briar pipe. As far as he is concerned, he would not like to sell the Avanti with that steering wheel. It doesn’t have to be wood, but there is wood graining…and there is wood graining. Maybe if the wood graining was marbleized, or you could get Lucite, which would go with any color you wanted to put into the car and it looks sharp.

b. Mr. Dredge agreed with Mr. Detzler and wanted to go on record that it is the shoddiest thing he has seen on the Avanti and is the poorest piece of plastic he has seen in his life. He believes it will have a detrimental effect on sales because people will not buy that wheel. The wood-grained wheel is a beautiful idea, but that one is a pretty sorry thing. Every expensive car has a wooden wheel, but it is wood laminated on a steel frame (he mentioned several foreign cars). These cost 3 times as much.

c. Dr. Lamberti mentioned that according to the New York Auto Show displays, wood graining is coming in. Also, if the instrument panel is wood grain, the wood grain wheel ties in with it. Messrs. Egbert and Minkel like it.

d. They agreed the die is cast. (Mr. Detzler likes it all except the steering wheel.)

3. Daytona Series

There will be no Daytona in the 6-cylinder line. The Daytona series will include a 4-door, and all the cars in the Daytona series will carry what was originally planned as the custom interior and exterior trim. A 259 engine has been released for it. Mr. Detzler remarked that Sales would like to have the 289 but can’t afford it.

4. Names

The new names will be given Monday night. Mr. Hardig will receive a list of names from Kip Stevens today – Mr. Stevens felt the two names were shocking.

5. Engineering Improvements

Mr. Dredge asked if there is a chance of getting the flange axle in the ’64 at introduction time. Mr. Hardig answered, not until the first of the year. He will try to get enough axles for the orders of the State of California – those units are generally built in November and December.

Mr. Dredge asked if there is any mechanical change on the ’64 that we can talk about because this will be an engineering year in the industry. Mr. Hardig said we will have a 6,000-mile lubrication, and everyone will have a considerable reduction in their horsepower – they are about to finalize that. Mr. Dredge observed that no one will talk very much about that. Dr. Lamberti pointed out that this year we have an exterior story – for about the first time in 10 years. It wasn’t anybody’s intention to make engineering changes this year; we did that last year and it didn’t do any good. Mr. Detzler commented that unless you have the exterior selling appeal, you won’t do any good with engineering improvements. Dr. Lamberti suggested that to get full travel on some of the changes last year, they be repented this year. Mr. Soelch mentioned the disc brakes; 5 other companies are coming up with disc brakes, and we were the first one to have them. Mr. Hardig remarked that others advertise that they have made 340 changes, but when you analyze it, you find they have included such things as paint, a shorter tube somewhere, etc.

6. 1964 Prototypes

We have the first one framed, which is the convertible. It is scheduled to go into paint sometime around May 10. After that, the rest of the prototypes will be following 10-12 days apart until we have 8 of them.

7. 1964 Model Releases

We are in pretty good shape on all of our tooling items, except that, according to Mr. Soelch, they will all roll off the lines without names on them. Mr. Detzler noted that the Sales Department has given their recommendation on the names – it is other departments who are holding it up.

8. Vinyl Top for the Hawk

At the moment, our plans are to release it as a special order only in black – an optional setup. We are costing it now.

MANUFACTURING

1. Shipments

Larks and Hawks 51,377 Avanti 2,994 Commercial Truck 4,422

2. Military Truck

We haven’t shipped any military trucks. Ordnance has approved 120 of them, but there is a mixup on the shipping instructions: we were given the wrong designation. We will make the shipping schedule if we get the proper instructions, because we have 197 of them ready. Dr. Lamberti mentioned that we need the billing on it this month, so keep on them. Mr. Whitmer answered that we are supposed to talk to them again at 9 o’clock this morning.

3. Hood Safety Catch

We have the spacer ready and will probably be in production with this by Thursday – which will make the correction complete.

4. Avanti Returned From Chicago

Mr. Whitmer referred to a letter which indicated this car was to be returned to Production, and he wondered if it was to be charged to Production. Mr. Hardig said we’re driving this car until we find what is the matter with the transmission. We have been driving it, but we haven’t had the trouble yet that the owner complained about. Mr. Challinor added that they couldn’t get it either, and they tore it down and checked out every part. Dr. Lamberti told Mr. Whitmer not to make up an appropriation – just transfer it over temporarily – then it goes to Sales for assignment to a district sales manager.

SALES

1. Dealer Count

Total Previous Week 2,037 Total This Week 2,031 Approved 4 Terminated 10 In Process 5

2. Inventory

Stock and Credit Holds 1,009

Not Okay:* Regular Line 288 Avantis 94 Trucks 60

*These figures vary with Mr. Whitmer’s because they pick them up at a different point in production.

3. Options

The axle ratios should be finalized and the runs all finished by Wednesday. There will be a meeting on all the options on Thursday at 1:30.

4. Retail Deliveries

Based on general trends, we should have somewhere around 2,100-2,200 cars – same as last time without home office. Industry should hold about the same as it was.

5. Wholesale (through 4/18)

We have 3,093 on the regular line, 107 Avantis, and 346 trucks. In addition, we have 110 GSA wholesales. In retail stores, we have 144 on the regular line, 14 Avantis, and 10 trucks.

6. Orders

So far in April, we have 3,339 orders on the regular line, 120 Avantis, and 384 trucks. We received 920 orders last week, and our most recent 5-day average was 184. Mr. Feuer wondered why the average daily order rate trend is down, and Mr. Detzler said that we have had a meeting with Messrs. Kough and Pistor who realize we don’t want to and don’t plan to build stock; each has his share of this 280. They say our retail is showing some favorable activity. It is moving along at a better pace.

About 500 of May’s orders have been run ahead on the line, and right now we have 554 ahead (after what has been used for production so far) for May and 927 ahead for June. Dr. Lamberti observed that the second 10 days in April will be a pretty important period because the program started the first 10 days in April, and the dealers may have held back. Mr. Detzler presented a chart showing a comparison of this year against last year on retail deliveries and dealer inventories.

7. Super Lark and Super Hawk

This program is out, but we have only lineset about 30 of each. We have material coming in for 300 Larks and 200 Hawks, and Dr. Lamberti wondered about getting another 50 or 60 Larks and maybe 30 or 40 Hawks out into the zones and gamble on this spring selling season. The Larks started last Monday and the Hawks started Thursday, and they will be all through with them by the middle of the week. If we don’t get them now, we’re not going to get them. The zones ought to have 5 or 6 cars apiece, otherwise we won’t get the orders in here in time to get them delivered before June – and we won’t be able to take advantage of the advertising that is behind them. We should get 200 or 300 of them out there and take a chance on getting them sold. There are some options, but not too many. On the axle ratios, there could be some 3:31’s and some 3:73’s.

Mr. Challinor commented that on the ’64, we’re going to make the dealer specify the axle ratio after asking the customer what he wants the car to do. We have had 2 super jobs that had the wrong axle ratio in them – and we can’t change the axle ratios in the field. Mr. Dredge mentioned that the original batch was with the 3:54 ratio, which is a pretty ideal gear. The 3:31 will let the car run at its maximum speed, but it won’t let it accelerate. Mr. Hardig noted that we’re planning 3:54 as standard for ’64. The customer can go to 3:31 or 3:73 at no extra cost, but if he goes to an axle ratio at either of the extreme ends, there will be an extra charge.

8. Runout

Dr. Lamberti indicated that there is some concern about the runout figure and wondered if there is anything in the mill to pep up the retail rate – we borrowed on May already. Mr. Detzler commented that there is nothing else to say. We know we’re right up against the grindstone. The men who are responsible to bring these orders in know that there is no backlog to work against. We know we are nip and tuck, but we think we will be able to do it. The industry is strong enough, and they’ll just have to go out and beat the bushes for these orders. We can expect 6,000 orders for April, May, and June. Then if we can maintain dealer inventory at the same level that it is now, our wholesale should take care of itself on the basis of this retail. We think we can come real close to this 5,800 we have in for April on wholesale. (We will have to work very closely with traffic on the load makeup.)

9. Avanti

We received 48 Avanti orders last week, a 9-per-day average. Production is up to 15 per day. We should be there by the end of the week. This is to reduce the length of time in the system – there are about 88 units in process. We have less than a 200-order spread between orders and build, and we will be caught up again about the 2nd or 3rd week in May. The order rate has improved a little bit over a couple of weeks ago. (We’re short on trucks too, and every day we have to scramble for cars – which adds to the cost.)

Freeman-Spicer has 5 Avantis in the works.

10. Retail Bonus Program

We have asked the zones to give us copies of the promotion pieces they send out to the dealers. On a 10-day basis, they list their high dealers on each of the programs. Some dealers have already reached their 75% level. This indicates that they are trying to make something out of this program and get some interest down to the dealer level. We are sending out some mailing pieces from here also, trying to generate some enthusiasm.

11. R3 Engine Pricing

Mr. Detzler wanted to know what the status of this is and when we are going to get the prices. We don’t have many orders for these engines, but they are old and the customers are crying for them. Dr. Lamberti indicated that we would be happy if we didn’t sell one engine. Right now, Mr. Granatelli says it will be in June sometime. He has given Mr. Egbert the date of June 20. He’s running his Novis in the 500. It won’t take him very long after the end of May because he has a lot of stuff in process, and he has almost enough material for the whole 100 engines. He has one engine ready that he will put into a car we sent out there.

Pricing-wise, our suggestion is that we should cover manufacturing costs. Mr. Egbert has all the papers for the pricing for all the ranges, along with the comments of Sales and PR. Their price suggestions vary all the way from $500 to $1,000. Sales recommended $500-$600, and Messrs. Dredge and Granatelli said we could live with about $900. The price includes the whole kit. Our manufacturing costs run about $1,400. Dr. Lamberti suggested that Mr. Rickus write a memo to Mr. Egbert summarizing these points, showing competition prices, PR opinion, manufacturing costs, etc.

Mr. Dredge strongly recommends that we have some engines pretty soon. We talked ourselves out of one blowoff, but he doesn’t think we can talk ourselves out of two.

12. Dealer Visit

Mr. Detzler mentioned a visit last week by one of our dealers, Warta, who had made many comments against the quality of our car. He had received one with two bent axles, etc. Mr. Capsey said the car was not shipped that way; it must have been dropped. Mr. Hardig quoted Mr. Warta as saying that our car was the best car on the road on 3 or 4 items. Also, he told of a meeting he had attended in New York with Dr. Lamberti where there were 30 or 40 dealers present. The dealers said the quality was so good that their service business was way off. They said forget the quality, get the price down. Dr. Lamberti pointed out that to discuss this at this meeting doesn’t present it in the right perspective – we want to keep things in the right focus.

PARTS AND ACCESSORIES

1. Business Operations

Through March 31, we are running $3,708,000 against a forecast of $3,643,000. It’s running about $900,000 ahead of forecast.

Because sales are off, our accessory business is off. So we shift the emphasis to motor oils, and we’re now shipping carloads into key dealer points. April is slightly under in the first 10 days, but we expect to pull it up also because of some big shipments we are sending out. Mr. Challinor showed a flash on mufflers and tailpipes which are high-profit items for us. We go out in the field with this on our prize point program and then tabulate the orders to find out the areas in which the program is effective. In those areas where it is not doing so well, we have a man show them how to merchandise the item. Our sales in this area are on forecast, and this is a profit center that gives us a good return on our money.

2. 6-Cylinder Oil Consumption

We have had a meeting with Engineering, and there will be further discussion on this, but we hope to get it resolved quickly.

3. Air-Conditioning

Mr. Hardig said the ’63 air-conditioner won’t fit the ’64, so Mr. Challinor will have to run out the ’63 air-conditioner. The present model six affects the market for air-conditioners because only a few people will put them into a 6-cylinder. We will continue to carry them because they are good volume and a high-profit item. Mr. Detzler remarked that Sales will recommend that it be continued as an option for the 6-cylinder because it would be a mistake not to have it available – with the increase in air-conditioner sales in the south. Dr. Lamberti wondered if the installation of these units couldn’t be left with the dealer instead of Manufacturing.

QUALITY CONTROL

1. We are changing from a ¼” channel to a 3/16” channel, which should eliminate the rattle in our windows. We switched to tempered glass, which is thinner, and the ¼” channel is too wide for the glass. The dealers found that when they had to replace a glass, they got rid of the rattle. Actually, this happened because they use plate glass for replacements which is thicker than tempered glass.

2. Brake Drum Check

This is almost completed. We should finalize it soon, and we don’t believe we will have to turn brakes out in the field.

3. Functional Test

We are now testing climatizers and motors and starting on Avanti windshield wipers. We think we’re on the right track on the windshield wiper correction.

4. Costs

We have tried different ways to acquaint people in the plant with the excessive costs caused by poor product quality. Now we’re having a quality control representative present the claims reports at the plant managers’ cost meetings. These men seem to be impressed with the hourly labor rate and the high cost to the Company, and the program appears to be quite effective.

PURCHASING

1. Keys

The ’63 key blanks cannot be used for the ’64 car, and Mr. Soelch understands that we want to leave off the Lark emblem and change the shape. Since we’re going to get a new key blank, we might as well make all the changes now – and tooling will start on May 15. Mr. Hardig commented that we’re going to put the logo on it instead of Lark and Hawk, and we have until the 23rd to finalize on the key and the shape of the head. He told Mr. Dredge that changing the tumbler will get away from the effect that the key is all the way into the lock before it really is. Mr. Soelch felt that part of the problem could be caused by the fact that the trunk key has to go in on an angle because of the design of the trunk.

2. Division Purchasing Directors’ Meeting

At the meeting last Tuesday we discussed our common problems and where we could help each other, as well as where we could help ourselves as a group. As one result of the meeting, we are switching vendors for air-conditioner compressors and expect to save $2 per unit for ’64.

3. Executive Dining Room

Mr. Soelch told of an incident that occurred when he took the division purchasing directors to the executive dining room for lunch. No special menu had been requested, but the waitress began serving each of them chicken. Four men in the group, including Mr. Soelch, don’t care for chicken and asked to be served something else from the menu in the dining room. (There were three main-course choices.) When the girl went into the kitchen to get their orders, a man came out (presumably the manager) and told them they couldn’t have any substitutions, and that they had to eat what was served them and nothing else. Mr. Soelch said the entire group of 11 men was embarrassed and added that he will not take a group to the executive dining room again. Dr. Lamberti asked Mr. Soelch to send him a memo on this with a copy to Mr. Cox.

INDUSTRIAL RELATIONS

1. Avanti Production Rate Increase Mr. Gallagher reported that the Union strongly resisted going in on a temporary basis on the new schedule, but we’re still putting them in on a temporary basis because that way we can get better qualified people. Mr. Gallagher would like to know by the middle of May if it will be temporary or permanent.

2. AMA Meeting

Mr. Gallagher covered subjects that were discussed at this meeting in Detroit on Friday. International Harvester is the target of a very mass, intense white collar organization drive by the UAW. They’re zeroing in at any location where they have a present UAW group recognized and using the bargaining committee as a steppingstone. They tell the employees that the company executives really don’t care if the Union is recognized. IH took a survey and found that the people really believed the executives didn’t mind having the Union in. The IH president sent a letter to the employees contradicting this.

Chrysler is having their third week of strikes at St. Louis, and GM expects a strike at St. Louis. GM has about 2,400 unsettled grievances – many of them over standards. The Union is challenging GM’s right to change standards as they tie in with mix changes – the question of rebalancing the man’s operation. The Union says you set a standard at the start of the model and you stay with it.

GM, Ford, and American Motors are not happy about the committee discussions prior to negotiations. The reason they’re doing it is because of the public climate which involves the present administration and their philosophy that public interest has to be weighed. The administration made a lot of headway with this philosophy. Also, they hope to avoid Governmental intervention by going this route. Reuther’s letter was “hat-in-hand” – very humble. They had no choice but to agree. Top-level people are sitting in on these meetings. They feel that International and Reuther, in particular, are trying to get the company to commit itself as far as data is concerned so they can use it at negotiation time. Subcommittees are going to be established for each area of interest. The ground rules include no discussion of any topic that is not mutually agreed to, and there will be no actual discussions on any topic until after Labor Day. The committee will be meeting to establish ground rules which will be publicly announced in the press. The company wants to tie Reuther down, publicly, with the publication of the ground rules. This will be the last item available to the press. From then on, it will be a blackout as far as news is concerned. Another factor involved in their agreement to these meetings was that they contacted the steel companies who feel it may have done some good. Within the framework of steel problems, the steel executives feel that their discussions with International regarding these problems have been good for them. Lou Seaton from GM gave some statistics on the telephone calls made to Reuther or his staff and the number of meetings held secretly in hotel rooms, and they numbered in the hundreds. They feel the International Union was getting a little fearful that if the holding of these meetings became known to the employees, it wouldn’t go over well. By setting up these meetings, Reuther can avoid this pressure because the meetings are made public and are not held in secret.

In our case, Local 5 has no desire for the International to come in. They feel they can handle it.

The companies identify Reuther’s technique as the parachute drop. Whenever he gives an item to the press, he has a messenger drop it off at the office after the company has closed on Friday. This way, while he has officially notified the company, they don’t know anything about it, and the item goes to press without any company comments.

LEGAL

1. Shareholders’ Meeting

This meeting will be Thursday, and we hope to have a routine meeting.

APPLIED RESEARCH

1. M602

Work is going forward on the technical proposal. We will meet the May 17 date for this.

2. M151

We haven’t received the RFP; it is due May 1.

3. 8 Ton 8x8

The design proposal is due the 24th, and the final typing should be finished today.

4. 1/8 Ton, ¼ Ton, and 2½ Ton

We have had no further word on the award of this and probably won’t until June.

FINANCIAL

1. Tooling

The commitments were a little over $400,000 last week, which makes $3.9 million to date and $2.8 million not committed.

INTERNATIONAL

1. Chilean Company

Messrs. Egbert and Burlingame have approved the proposal to buy the Chilean company. It will come before the Board at the meeting after the shareholders’ meeting.

2. Argentina and Columbia

We are continuing to negotiate in Argentina and Columbia but have no conclusion yet. The suggestion in Mr. Leach’s note about the material is just what we intend to do, that is, use the material we have and put in the current engine. There is still a possibility that this will be cleared by June. We may have to send somebody down there again. Dr. Lamberti wondered about the possibility of discussing discount, and Mr. Thomas assured him that the financing terms are liberal.

PUBLIC RELATIONS

1. Trailer Hauler

Mr. Dredge mentioned again that the mail is extremely heavy regarding trailer haulers as a result of stories in camper and trailer magazines about options for trailer-pulling use. He commented again about the possibility of the publicity for a trailer-pulling package for pickups and passenger cars for ’64. The sales of travel trailers are going skyward, and we have an extremely desirable bunch of options – which is the cause of the heavy mail. We are in a position to package these parts as the ideal answer. We have a 5-speed available in the pickup, and nobody else has it – trailer people think this is wonderful. We already have many truck options.

2. Prices

Mr. Dredge noted that from here on out, there’s going to be an awful lot of public comment regarding what the steel increase will do to automobile prices. If we are able to hold the line on prices and know it as soon as possible, we could make the same kind of hay that we did on the seat belts. Dr. Lamberti remarked that we’re looking at about $50 per car increase, and the chance of us not raising our price is practically nil. Budd has already publicly announced that they will pass on every penny and, of course, they are one of our vendors. Mr. Dredge added if industry holds the line and we go with them, we can get more good publicity on stories about this then on anything else we do. He doesn’t propose to swallow $50 per car, but if we do, we should get the publicity value out of it. Dr. Lamberti doesn’t think industry will hold the line. We will wait and see.

3. Car Life Article

This is one of the three top motor magazines, and they have devoted almost an entire magazine to Studebaker; where they think we’re going, what some of our background has been, results of tests of our Wagonaire, Super Lark and Super Hawk and R3, the financial writer’s idea of what our overall Corporate future is, and the publisher’s idea of what he thinks Studebaker is headed for. (The staff members will get copies.) It is not a puff piece – there are some unfavorable comments. It is not the kind of publicity you can buy. Some magazines will print anything you give them if you buy advertising, but this is not that kind of thing. This is a constructive point of view.

4. Product Quality

Mr. Dredge reported that we are having trouble on maintenance items charged to our fleet of cars across the country. (We operate 75-100 automobiles.) We have no warranty on these cars, and our outgo on cost on items which would be dealer get-ready items (like sticking windows or hoods that don’t close or steering alignment that is out) is getting into the fantastic area. It reflects what many owners would run into – although, of course, they would be under warranty. Mr. Dredge offered to let Engineering see the bills on minor items from New York, Chicago, Los Angeles, and other cities across the country. We have a Public Relations man who manages the pool of cars as part of his duty. We tell our men in the field that the cars have to be right before they’re put back into the pool again after they have been loaned out. We don’t use a single dealer – we rotate around. The use of the cars is about 60% Press and 40% VIP’s. Dr. Lamberti suggested that all PR cars be retail serviced here so we can tie some of these things down. Mr. Dredge wanted to know if this would entitle PR cars to warranty service. Mr. Challinor commented that all zone cars are checked regularly by the service people. However, it is the responsibility of the man to whom the car is consigned to keep it up.

PR paid Mr. Granatelli $700 to put into good shape the Wagonaire tested by Car Life. This unit had about 500 miles on it, and it cost us $700 for tuning, wheel alignment, rattles, squeaks, noises, making sure that everything on the car worked, that the instruments worked well, etc. However, this got us a report that was favorable; there was $700 worth of news items in the magazine. Later this Wagonaire was used in the Economy Run, and it gave a better job of selling itself to the press people than any job Mr. Dredge has ever been in. Mr. Granatelli went through the whole thing to make sure everything was all right. Dr. Lamberti suggested that a list of the things that Mr. Granatelli did for the $700 be sent to Mr. Hardig – which Mr. Dredge will do. (He has a bill from Engineering for $75 for mounting a wheel.)

5. Citizens for Studebaker

These cars are being pulled in a few at a time.

6. Special Hawk

This unit that was built for the New York show is on its way here for the stockholders’ meeting. (It will go to Engineering first to have a new carpet put in.)

7. Newspaper Article

Comments were made about an article that appeared in a Chicago paper. The article was written by Mr. Flager, and Mr. Dredge explained that Mr. Flager is the automobile editor of Associated Press. His article was a rundown on where Studebaker is going and why. He said some of Studebaker’s problems were due to the late launch. Mr. Dredge observed that at least we have Mr. Flager stopped from saying that we’re going out of the automobile business – now he’s just asking the question, not bringing in the verdict. Dr. Lamberti commented that people have been buying our car because it is a good quality car. Now picking on the quality – this is all part of the picture – that we’re down. Mr. Hardig asked why Mr. Flager didn’t have a better picture of Mr. Egbert, and Mr. Dredge explained that we supply better pictures, but they use what they want to. It appears to some of us that since we are having some problems that we are getting too much news coverage at this time.

4-25-63