I have a chap asking me about some Stude History 101. Is there any truth or substance to a situation where Renault of France was considering the purchase of Studebaker ( all or part) back in the early 50's.

This gent's father used to work for Studebaker Corporate in Mexico City and was supposedly asked to move to France to be part of some process there, but opted out of the deal. . The older fellow is in his declining years now and the son is trying to piece together his early career with Studebaker. Any help would be appreciated.

To the best of my knowledge, Renault never attempted to acquire Studebaker.
However, in 1955, James Nance, who was president of the Studebaker-Packard, initiated talks with Renault to determine if there was any possibility that Studebaker could serve as the U.S. distributor of Renault automobiles.

Several meetings were held between executives of the two companies, but Nance finally decided to delay any final decision until 1957 or 1958. By the early 1956, Studebaker-Packard was in real danger of total collapse. That is when the Eisenhower administration stepped in and brokered the deal with Curtiss-Wright.

It also was at this time that Daimler-Benz and Studebaker-Packard reached an agreement that gave Studebaker the exclusive North American distribution rights for Mercedes-Benz automobiles.

In 1959, Daimler-Benz attempted to purchase a large block of Studebaker-Packard preferred stock. Though this would have given the company a needed infusion of cash, Studebaker-Packard board member Abraham "Sonny" Sonnabend blocked the move, contending the Daimler-Benz would be "undesirable stockholder" and warned that might get control of the corporation. As a result, nothing ever came of the Daimler-Benz initiative.
Hope this answers your question.

Leighzer

bill@bondobilly.com wrote:
"""Not a believer in "what if's", what if Daimler Benz acquired SP? But in this what if, forget the management of MB today and think of the company back in the 50"s.""""
Bondo raises one of the most intriguing questions that can be posed regarding the final years of Studebaker.
Considering the obsolete nature of Studebaker's auto assembly operations, one must wonder what the German automaker saw in Studebaker. Perhaps one explanation can be found in Studebaker's Truck Division. Some evidence suggests D-B was interested in blending its truck operations with that of Studebaker's. The Chippewa Avenue plant offered a decent place for truck construction. Also, control of Studebaker would have given D-B control of the dealer network.

Would D-B have provided Studebaker with the capital needed to build a modern auto assembly plant? Considering D-B management as it existed in 1959, as Bondo suggested, makes me think that Studebaker auto production would have been given an opportunity to continue.
Leighzer

Everything I have read indicates Diamler-Benz was only interested in the dealer network. Studebaker-Packard had an extensive dealer network. They also had experience in dealing with lunatic fringe buyers, something which defined the imported car buyer in the 1950s. The price to do business with S-P was pennies on the dollar to what it would have cost to set up thier own free-standing dealers.

Also worth remembering, it was not a given that the US market would ever be important. The European car sales per manufacturer numbered in the hundreds and low thousands of units per year when these negotiations were going on.

M-B trucks were so radically different from US trucks in the 1950s that there could have been next to no reason to consider joint production or sales.

thnx, jv. (Jack Vines)

I have always thought that Studebaker would have had a chance if they had worked harder on their truck division. Studebaker trucks were good and they had a lot of respect from farmers, local delivery people, etc. Add MB's engineering and some capital and who knows...nice to dream of, though.
* * * * * * * * * * * * *
John F. and Robin Peters Henne
Shelburne, New Hampshire

The new book by Bonsall claims that Studebaker's dealer network was one of the company's weaknesses, IIRC. (I haven't read the booko yet, but I've hinted broadly that this would make a nice Father's Day present...) Studebaker dealers were, by and large, smaller operations selling fewer cars at a higher margin than the Big Three. This had the effect of making the price even less competive -- which depressed sales, moving the company even further away from the economies of scale that the competitors enjoyed.

That said, it probably would have been cheaper than building a dealer network, though in the long run, MB dealers have been able to generate considerable cachet as an up-scale marque long before an unfavorable exchange rate pushed Mercedes prices to stratospheric levels.

Mercedes autos were not regarded as particularly well-engineered or well-constructed vehicles in the Fifties, what what I've read. But they did share once characterisitcc with Studes: they rusted out, big time! digiplnt@netdirect.net

Leihzer

Numerous authors (including yours truly) have written extensively on the weaknesses of the Studebaker dealer network.

By the late 1950s, most of the strong dealers had either given up on Studebaker or had become dual dealerships. A good example of the latter was Gregg Motor Sales in Joliet, Illinois. Owner John Gregg had taken on Edsel while continuing to sell Studebakers. I know, that sounds like giving a life vest to a Titanic passenger. Nonetheless, it worked out for Gregg. When Edsel stumbled, the dealership was able to obtain the Mercury franchise and kept on selling Studebakers.

Without belaboring the point, far too many Studebaker dealers were small affairs. Often they were under-capitalized, had poor locations, small showrooms and outmoded facilities. Many, perhaps most, dealers did not engage in the wheeling and dealing typical of the auto industry. To add insult to injury, a very large percentage of Studebaker dealers were located in smaller communities. For example, there was a very nice Studebaker dealer in the nearby town of Beardstown (Illinois), but it was hard to sell a large volume of cars and trucks in a town of 5,800, especially when it had to compete against the Big Three and AMC.

In any event, Daimler-Benz would not have gone to the trouble and expense of gaining control of Studebaker just to secure control of its dubious dealer network. Daimler-Benz could have broken its North American distribution contract with Studebaker and either created its own dealer network or struck a deal with another automaker.

By way of comparison, look at what VW achieved. They created their own dealer network. And though they had far fewer dealerships than Studebaker, their dealers were far, far more productive.

For any number of reasons, Daimler-Benz was interested in the total assets of Studebaker-Packard, among them being Studebaker's manufacturing, engineering and truck operations.

It is unclear just how much Daimler-Benz really knew about Studebaker or the U.S. market. I suspect their knowledge was very good. Consider three points:

1. Back in 1955, VW acquired Studebaker's New Brunswick plant with every intention of building cars at the New Jersey facility. It was not until after they acquired the facility that VW discovered it would not be economical to build Beetles in the U.S. For more information, check out my article on the subject in the January 1995 issue of Turning Wheels and the book, Small Wonder by Walter Henry Nelson. Is there any reason to believe Daimler-Benz was smarter than VW?
2. How much did Packard know about Studebaker when those two joined forces in 1954? The fact of the matter is that Studebaker managed to hide from Packard the truth about its financial situation and condition of its manufacturing facilities until it was too late for Packard.
3. Look at Daimler-Benz's recent acquisition of Chrysler. Daimler-Benz didn't understand the U.S. market, especially as that market applies to the products Chrysler produces. Daimler-Benz didn't understand Chrysler's corporate culture nor did it understand its financial situation.
The Japanese automakers took the time and effort to learn the U.S. auto market before attempting to earn a significant share of it. By contrast, the Germans have not. Call it arrogance or just plain stupidity, but they repeatedly attempted to apply German principles to the American market. What about VW? Didn't they succeed? Yes, but they owe their success to the unique nature of the Beetle rather than to their business acumen. Remember, VW began to flounder once the Beetle was replaced by less appealing offerings like the Rabbit and Golf.

Leighzer

Check the early suspensions too........I believe there are some similarities in this area also ...

Bob Johnstone

This brings up a lot of different thoughts for me.

I've heard that in a few localities, one of the better Studebaker dealers could sell as many cars as, if not more than, the Big Three dealers. I've heard second hand info about this in either Denver or Greeley, a suburb of Chicago, and some town mentioned in "American Graffiti". Apparently, these locals were scratching their heads about Studebaker going under, when every third car and pick-up on local streets was a Studebaker.

I can't help but wonder if Studebaker wasn't partially a victim of pre-computer era FUD. A potential buyer goes comparison between Studebaker and the Big Three dealers, and the Big Three dealers keep saying something like "You don't want to buy one of those! Haven't you heard? They're going out of business!" Constantly repeat this until it becomes true. The Wintel people have been battering Apple with this crap for years. As somebody who has been lied about until the lies are believed as true in the regional Fandom rumor mill, I find Apple and Studebaker to be very sympathetic. That, and getting nailed in the marketplace for that "ahead of its time" thing. Anybody wanna buy an unpopular sci-fi parody comic book, replete with "Cyclops babe" and tons of pop cultural in-jokes, that I drew way back during the Reagan era? Matt Groening even read a few in Gary Panter's living room!

What's really freaky about the Japanese is that, during the '70s, they figured out what American car buyers wanted better than the clueless suits in Detroit. That is really weird when you consider the geography and the cultural differences!

The Daimler Chrysler thing reminds me of when Deutz bought Allis Chalmers in the middle '80s and unintentionally did everything they could to destroy any heritage and brand loyalty over night. Oddly, Deutzes apparently sell well in Canada, but are always a funny foreign also-ran in the U.S.

DGH

[ Dealers]
You are quite correct. There were a number of exceptions to the rule among Studebaker dealerships.

[Victim]
Indeed! But it wasn't only other dealers that hammered Studebaker. From the mid-50s onward, the news media carried frequent articles about the imminent demise of Studebaker. Even when the Lark pushed sales upward, writers and TV/radio commentators wondered whether the Lark would be enough to prevent the eventual collapse of the corporation.
Studebaker also was hurt by the low resale value of their vehicles. This fact was mentioned prominently in such publications as Consumer Reports and newspaper auto sections. However, the low resale situation was really the result of predatory practices by the Big Three dealers (and even AMC, to an extent). Big Three manufacturers encouraged their dealers to place a low value on their competitors' cars and trucks, especially Studebaker and AMC. Thus, a Studebaker owner could only get decent trade-in value at a Studebaker dealership. No, this didn't instill loyalty, but rather encouraged people to get rid of their Studebakers and never buy another one.
Ironically, a real Studebaker enthusiast knew he/she could get the best deal on a used Studebaker by going to a Big Three dealer. By the same token, this situation forced many Studebaker dealers to lower prices on their used Studebakers, thus cutting their profit margins.

[Freaky]
Did they really understand our market - or where they at the right place at the right time? Back in the late 70s, I had the opportunity to host 10 Japanese government officials who were visit the firm for which I was working at that time. We did talk cars. They attributed the success of Japanese cars to three factors, as follows:

1. At the time, Japanese cars were of a higher quality than most U.S. cars, especially in the area of fit and finish.
2. With gasoline prices having taken a big jump during the Arab oil embargo, Japanese cars offered better fuel economy.
3. The Japanese hired the best American ad agencies and consultants to help them effectively market their vehicles.
Interestingly, every one of these Japanese officials was taking a new car home - a new Lincoln. They liked big American cars.

Sadly, many people look at Studebaker and pronounce it a failure. In reality, the company produced vehicles for 114 years - a remarkable length of time. The company survived the end of auto production, merged with Worthington and was considered a prize when acquired by McGraw-Edison.

Leighzer

//////I've heard that in a few localities, one of the better Studebaker dealers could sell as many cars as, if not more than, the Big Three dealers. I've heard second hand info about this in either Denver or Greeley, a suburb of Chicago, and some town mentioned in "American Graffiti". Apparently, these locals were scratching their heads about Studebaker going under, when every third car and pick-up on local streets was a Studebaker. You are quite correct. There were a number of exceptions to the rule among Studebaker dealerships. I can't help but wonder if Studebaker wasn't partially a victim of pre-computer era FUD. A potential buyer goes comparison between Studebaker and the Big Three dealers, and the Big Three dealers keep saying something like "You don't want to buy one of those! Haven't you heard? They're going out of business!" Constantly repeat this until it becomes true. The Wintel people have been battering Apple with this crap for years. As somebody who has been lied about until the lies are believed as true in the regional Fandom rumor mill, I find Apple and Studebaker to be very sympathetic. That, and getting nailed in the marketplace for that "ahead of its time" thing. Anybody wanna buy an unpopular sci-fi parody comic book, replete with "Cyclops babe" and tons of pop cultural in-jokes, that I drew way back during the Reagan era? Matt Groening even read a few in Gary Panter's living room!////

Indeed! But it wasn't only other dealers that hammered Studebaker. From the
mid-50s onward, the news media carried frequent articles about the imminent demise of
Studebaker. Even when the Lark pushed sales upward, writers and TV/radio commentators
wondered whether the Lark would be enough to prevent the eventual collapse of
the corporation.

Studebaker also was hurt by the low resale value of their vehicles. This fact was
mentioned prominently in such publications as Consumer Reports and newspaper
auto sections. However, the low resale situation was really the result of predatory
practices by the Big Three dealers (and even AMC, to an extent). Big Three
manufacturers encouraged their dealers to place a low value on their competitors' cars
and trucks, especially Studebaker and AMC. Thus, a Studebaker owner could only
get decent trade-in value at a Studebaker dealership. No, this didn't instill loyalty, but
rather encouraged people to get rid of their Studebakers and never buy another one.

Ironically, a real Studebaker enthusiast knew he/she could get the best deal on a used
Studebaker by going to a Big Three dealer. By the same token, this situation forced
many Studebaker dealers to lower prices on their used Studebakers, thus cutting their
profit margins.

/////// What's really freaky about the Japanese is that, during the '70s, they figured out what American car buyers wanted better than the clueless suits in Detroit. That is really weird when you consider the geography and the cultural differences!

Did they really understand our market - or where they at the right place at
the right time? Back in the late 70s, I had the opportunity to host 10
Japanese government officials who were visit the firm for which I was working
at that time. We did talk cars. They attributed the success of Japanese cars
to three factors, as follows:
1. At the time, Japanese cars were of a higher quality than most
U.S. cars, especially in the area of fit and finish.
2. With gasoline prices having taken a big jump during the Arab
oil embargo, Japanese cars offered better fuel economy.
3. The Japanese hired the best American ad agencies and con-
sultants to help them effectively market their vehicles.

Interestingly, every one of these Japanese officials was taking
a new car home - a new Lincoln. They liked big American cars.

The Daimler Chrysler thing reminds me of when Deutz bought Allis
Chalmers in the middle '80s and unintentionally did everything they could to
destroy any heritage and brand loyalty over night. Oddly, Deutzes apparently
sell well in Canada, but are always a funny foreign also-ran in the U.S.
You make a very good point. At the time this happened, I was just beginning
my 15 years of residency in Wisconsin. Allis-Chalmers was big name in that
state, especially the Milwaukee area. The new German owners did everything
they could to eradicate the Allis-Chalmers name. They succeeded and, in the
process, destroyed all sense of brand loyalty.
In this Studebaker History thread, one point has been ignored.
Studebaker's fate well may have been sealed when the company elected to put
its money into a new post-war car rather than in plant improvements (i.e.,
replacing antiquated manufacturing facilities with new plants). This
decision saddled Studebaker with a woefully inefficient manufacturing facility
- and that meant Studebaker was saddled with higher operating costs than
its bigger competitors. At the same time, Studebaker did nothing to
rationalize its labor union contracts. As a result, Studebaker workers were
highly paid, but were less productive than workers at other plants.

Finally, Studebaker failed to capitalize on the sterling war
record of its Truck Division. It took Studebaker until 1949 to introduce a
new truck line, and this was a watered-down version of what originally had
been planned. The Truck Division received precious little marketing support.
Yet, the potential can be seen in market acceptance of the 2R Series trucks.
2R Series sales were greater than all previous truck sales combined, and
were greater than all subsequent truck sales.
After the auto market shifted from a sellers' market to a buyers'
market, Studebaker never again had the financial resources or the corporate
will to do what was needed to assure the long-term survival of the vehicle
manufacturing operations.

Nonetheless, it was during this time of decline that Studebaker
produced some of its most significant products and vehicle features. This
was the time of the C&K bodies (from the 53 coupes to the 64 GT Hawks), the
light and medium duty Diesel trucks, the Lark, Transtars (what a name, what
a grille), the Avanti, awesome power, numerous safety features, sliding -
roof wagons, the Scotsman and a lot more. Sadly, many people look at
Studebaker and pronounce it a failure. In reality, the company produced
vehicles for 114 years - a remarkable length of time. The company survived
the end of auto production, merged with Worthington and was considered a
prize when acquired by McGraw-Edison.

Leighzer
1950 2R6 Pickup
1955 Commander 4-Door Sedan