The Packard merger and the Curtiss-Wright management

1953 – 1962

The ground gives way: Studebaker's postwar management had thinned by 1949, when Hoffman and engineering chief Roy Cole had both left. Record sales of $503 million came in 1951; by 1952 car sales were falling. In the spring of 1953 Ford began the production drive and discounting war against General Motors that crushed the independents, who could not match Big Three prices: Studebaker's labor costs were the highest in the industry — its workers and retirees among the best paid, under contracts management had never taken a strike to contest — and its South Bend location made consolidation with any partner's plants impractical. The hope of the independents, a four-way merger of Studebaker, Packard, Hudson, and Nash, had already failed in George Mason's hands at Nash. By 1954 Studebaker was losing money and negotiated its combination with Packard.

Studebaker-Packard: The merger took effect on 1 October 1954, forming the Studebaker-Packard Corporation under Packard's James J. Nance. The combination is described in the records of both companies as Packard taking over the larger but weaker Studebaker — the Hagley Library's note puts it that Packard "purchased its business and assets" — and it disappointed from the first accounting: Studebaker's cash position proved worse than it had represented to Packard. A labor dispute in the mid-1950s cut deep into the works: the Tribune's account gives South Bend employment falling from about 22,000 to about 7,000 by 1955 as production efficiency collapsed and a new contract was forced. Packard's own car production in Detroit ended in 1956; the last cars bearing the Packard name were built at South Bend through 1958. The combined company posted a $43 million loss in 1956 and stood near bankruptcy.

Curtiss-Wright: In 1956, in an arrangement the Eisenhower administration encouraged, Studebaker-Packard signed a three-year management contract with the aircraft maker Curtiss-Wright. Its president, Roy T. Hurley, set out to cure the company's employment practices; under Curtiss-Wright's guidance the company sold the old Detroit Packard plant and returned the new Conner Avenue plant to its lessor, Chrysler, and Studebaker-Packard became the American importer and distributor for Mercedes-Benz, Auto Union, and DKW, whose cars many Studebaker dealers then sold alongside their own. Curtiss-Wright gained the use of idle plants and tax relief on its aircraft profits; Studebaker-Packard gained working capital and time. The "Packard" element of the corporate name was retained until 1962, when the company again became simply the Studebaker Corporation.

Sources:

1. Standard encyclopedia history of Studebaker — the departures of 1949, the 1953–54 price war and its effect on the independents, the industry's highest labor costs, the failed four-way merger scheme, the near-bankruptcy of 1956, the Curtiss-Wright three-year management contract of 1956 and Hurley's program, the Detroit plant sale and Conner Avenue return, the Mercedes-Benz/Auto Union/DKW importership, and the 1962 restoration of the Studebaker Corporation name.
2. Hagley Museum and Library, Studebaker Corporation records note — the 1954 formation of Studebaker-Packard by Packard's purchase, and the 1962 reversion of the name.
3. South Bend Tribune (2026), from its earlier reporting — the $503 million record sales of 1951, the employment fall from about 22,000 to about 7,000 by 1955 after the labor dispute, and Beckman on the wage structure and the unwillingness to take a strike.