Death of a car manufacturer

The last days of Studebaker

End of the road for Studebaker leaves 648 jobless was the bleak headline in the Toronto Star on March 5, 1966, the day after word broke in Hamilton that Studebaker was dead.

The article went on:

"Company officials said the decision to close and sell the Hamilton plant, which has produced all Studebakers manufactured since 1963, was made because the car would not sell ...

"Studebaker's 411 hourly, 200 salaried and 37 field workers in Canada learned of their impending discharge by notices placed on bulletin boards at the Hamilton plant at 3:20 p.m. Most workers who were on shift left the plant in stunned silence after reading the notice."

Also affected were the 125 Studebaker dealers in Canada and 450 in the U.S.

But the news didn't come as a total surprise, for Studebaker had been in financial trouble since the mid-1950s.

In 1963, U.S. production was halted and shifted to the firm's Canadian plant in Hamilton.

Studebaker began making carriages in South Bend, Ind., in 1852, switching to cars in 1902.

A Canadian plant opened in Windsor in 1910.

Studebakers were popular throughout the '20s, with the firm usually finishing among the top 10 auto makers. But once the Depression struck, the brand struggled, halting auto production in Canada in 1936.

After World War II, Studebaker was the first on the market in 1947 with modern, post-war designs. It shifted Canadian operations from Windsor to Hamilton, taking over what had once been an Otis

The last Studebaker, a Cruiser, rolled off the line in Hamilton in March 1966 - and is now on display at the Studebaker museum in South Bend, Ind.

A publicity photo of the 1953 Studebaker Commander Regal Starlight Coupe.

JIL MCINTOSH FILE PHOTO

A 1950 Studebaker Champion, with its bullet-nose front end. Below, a 1963 Studebaker Avanti, a name that some former Studebaker employees later revived - about 150 are still made each year

Elevators factory and a wartime munitions plant.

Studebaker sales declined in the early '50s as competitors brought out redesigned models.

In 1954, Studebaker merged with Packard, another small firm that had seen better days. But neither brand prospered.

Losses mounted, and the Packard name disappeared in 1958.

Studebaker sales surged in 1959, when it introduced the compact Lark, beating out the Big Three with a small car.

(The only other North American compact was the American Motors Rambler.)

But GM, Ford and Chrysler responded in 1960 with their own compacts — the Corvair, Falcon and Valiant, respectively — and Studebaker’s sales steadily slid.

In 1960, hard hit by rivals' range of models, Studebaker began diversifying into such non-automotive fields as home appliances, electric generators, fuel additives, garden tractors and plastics.

But by 1963, losses were $113 million and climbing. The automotive side had lost money every year since the merger with Packard, except in 1959, thanks to the Lark. In the final year in South Bend, Studebaker lost $25 million making cars.

Meanwhile, the non-automotive areas were showing profits.

The decision was made to shut down auto production in South Bend and consolidate operations in Hamilton, where wages were lower and the foreign exchange rate meant a 7 to 8 per cent advantage.

The Hamilton plant had been turning a profit and quality was considered a notch above the South Bend products.

Continued production in Canada spared the company a payout to dealers of up to $60 million for breach of contract.

For its final two years, the Studebaker was billed as "Canada's Own Car."

The Hamilton plant built 8,190 cars in 1963 and, operating solo, 17,614 in 1964. Production hit 18,433 the next year, of which 12,429 were sold in the U.S. and the rest in Canada, reflecting the brand's greater popularity here per capita — we have always favoured smaller, more economical vehicles than Americans do.

Another factor was the national pride involved in buying a made-in-Canada product.

The City of Hamilton bought Studebakers for use by civic officials. Studebaker loaned Miss Dominion of Canada, Jane Kmita Holubik of Regina, a new 1964 Studebaker Daytona convertible to drive during her reign.

In the U.S., the Canadian-made Studebakers were billed as the "Common Sense Car" — a good slogan for a firm that could no longer afford to make annual styling changes.

With lower overhead, Studebaker's Hamilton operation earned a small profit, but not enough to satisfy the board of directors of the U.S. parent company. Hence, the fateful shutdown announcement of March 4, 1966.

Studebakers, in their final years, failed to sell for several reasons. Styling was conservative, and a full range of products was lacking.

And Studebakers had an image problem, being associated with low-income, middle-aged people at a time when the first baby boomers were starting to drive.

As losses mounted and market share shrank, potential customers were scared off because they wondered whether Studebaker would survive.

The last Studebaker — a blue-and-white Cruiser — rolled off the assembly line in Hamilton on March 17, 1966.

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