[1931Chevy]

We interrupt your regularly scheduled financial-crisis programming to bring you M&A news from Detroit.

Talks between Chrysler and General Motors are intensifying, according to today’s WSJ. Of course, this isn’t completely separate from the financial crisis. True, Detroit’s woes began long before the onset of this current financial mess, but the credit crunch has exacerbated the situation for Detroit.


When word of a potential deal broke late last week, the idea was widely panned, as U.S. News & World Report points out. Ray Windecker, a columnist for the Detroit News, does not think it’s such a bad idea.

In fact, it reminds him of the deal Studebaker and Packard pulled off in the mid-1950s.

“Both automakers were in trouble. Studebaker had a larger number of dealers, an interesting but overpriced collection of smaller and sporty cars and a decent line of light and medium trucks. Packard only had moderately updated luxury cars, but it did have cash. They merged.”

In the 2008 version, GM plays the role of Studebaker, with the dealers and the product advantage, while Chrysler with its cash (thanks to its owner, the private-equity firm Cerberus Capital Management) plays Packard.

Here is how Windecker sees the deal working.

“Cerberus would have to buy the 20 percent of Chrysler owned by Daimler or work out a deal. Then Cerberus would agree with GM on a set amount of money to leave in Chrysler’s till before swapping Chrysler to GM for the remainder of GMAC. GM should end as soon as possible production of Chrysler vehicles except Jeeps and minivans. It could rebadge appropriate Pontiacs as Dodges, Buicks as Chryslers and GMCs as Rams.”


continue at the link

 

[Stéphane Dumas]

I wonder if could we compare it also to Nash-Hudson situation (there also lots of posters on various blog who also compared to British Leyland) or to Peugeot-Citroen?

Also, we could wonder what if Packard had decided to merge with Nash instead of Studebaker if things could had been different?

 

[DeliveryDave]

GMCs as Rams.”

This I think would be interesting. Except for recently there has not been much difference between Silverado and GMC trucks except the name plate and slightly more upscale package. The Dodge truck with Cummins engine has a dedicated following so might play out good except it's one of Duramax competitors.

Personal opinion like the above statement, I like the GMC version better then the Chevy so what I would like is rebadge the GMC as Chevy and have the Ram rebadged as GMC.

Interesting times, rumors get people talking, people talking is free advertisement!

 

[t-rex]

I wonder if could we compare it also to Nash-Hudson situation (there also lots of posters on various blog who also compared to British Leyland) or to Peugeot-Citroen?

Also, we could wonder what if Packard had decided to merge with Nash instead of Studebaker if things could had been different?

Packards, not Cadillacs, were the finest luxury cars of their day. Merging it with any low-rent company like Nash or Studebaker (both of whom produced higher-quality products than the "Big Three") was its death-knell.

Packard died because the trashy American public of the 1950s valued chrome, tailfins and annual model changes to the superior engineering and outstanding build quality of the Packard. Packard simply couldn't afford to keep up.

South Africans loved Studebakers, especially in the Afrikaans community, and the company always had a higher market share there than in America. Maybe it's because "Studebaker" had an Afrikaans ring to it, or the fact that the South African Police drove exclusively Stoodies until Volkswagen, who had bought the company in 1966, pulled the plug. VW only did so because production was shutting down in Canada, and there was no longer a source of CKD packs. VWSA considered buying the tooling from Canada, which meant any further SA-produced Studebakers would have easily met the upcoming 1969 local content requirement of 55% (by mass).

But VWSA had just swallowed a big chomp by buying out SAMAD (the SA company that made VW's and Stoodies) and there was no money left to buy the tooling from Studebaker. Plus, sales of bigger US cars had been gradually declining in the 1960s, and further investment would have been needed to redesign the Studebaker's ageing styling, and probably couldn't have been recouped, so VW simply sold off the last of the 1966 CKD models and called it quits.

Chrysler's SA-built Valiant was a phenomenal success at this time, and became the choice of taxi operators as well as the SA Police, lending one to speculate whether or not the Valiant's rise in popularity was the result of Studebaker's demise.

There were still a few Stoodies around Cape Town, most in service as taxis, when I was a boy, and when we travelled out to remote rural areas, those old Stoodie Champ pickups were commonplace and it wasn't an uncommon sight to even glimpse an old Hawk parked streetside in those small Cape Wine Country towns. And if you saw a solid black Studebaker (South Africans hated black cars; they got too hot in the sun) you knew it was a Security Police squad!

I've noticed Studebakers are kinda laughed at by Americans, but in South Africa, it was a well-loved and deeply-respected brand, known for its rugged reliability and ability to tackle rough untarred Karoo roads with aplomb. Many an Afrikaner shed a tear as the last models disappeared from VW showrooms.

Like Nash and Hudson, Studebaker and Packard were excellent cars that were largely and sadly ignored by the crackhead, attention-deficit American public, who wanted flashy three-tone paint instead of the superior build quality and engineering its smaller manufacturers offered.

It's a sick shame that a hideous hunk of shyt like the '57 Chevrolet is a "classic" while the beautiful Studebaker Hawk, with its Paxton Supercharged engine, is unknown to all but the most trainspotting of American car fans.

 

[Stéphane Dumas]

Packards, not Cadillacs, were the finest luxury cars of their day. Merging it with any low-rent company like Nash or Studebaker (both of whom produced higher-quality products than the "Big Three") was its death-knell.

Packard died because the trashy American public of the 1950s valued chrome, tailfins and annual model changes to the superior engineering and outstanding build quality of the Packard. Packard simply couldn't afford to keep up.

It's a sick shame that a hideous hunk of shyt like the '57 Chevrolet is a "classic" while the beautiful Studebaker Hawk, with its Paxton Supercharged engine, is unknown to all but the most trainspotting of American car fans.

There was another factor who played against Packard, was the decision of Packard during the depression of going a bit low-price, in 1937 with the Packard Six and the 120. It was first a temporairy measure but it sale well, a bit too well and begin to dilute the image of Packard http://en.wikipedia.org/wiki/Packard_One-Twenty and the later Packard 200 and Clipper didn't helped
http://en.wikipedia.org/wiki/Packard_200 Packard decided to make the Clipper a separate make but it was too little too late.

And strange irony while today the 1957 Chevy is a classic, the main star of the time was the 1957 Mopars with their "Forward look" who forced GM to redraw their planned 1959 models (who was originally just reskinned 1958). However the "Forward look" models seems to be launched in an hurry and they got some finition problems.

 

[t-rex]

There was another factor who played against Packard, was the decision of Packard during the depression of going a bit low-price, in 1937 with the Packard Six and the 120. It was first a temporairy measure but it sale well, a bit too well and begin to dilute the image of Packard http://en.wikipedia.org/wiki/Packard_One-Twenty and the later Packard 200 and Clipper didn't helped
http://en.wikipedia.org/wiki/Packard_200 Packard decided to make the Clipper a separate make but it was too little too late.

Very true. Cord, Auburn, Duesenburg, Pierce-Arrow, Marmon, et.al, all bit the dust because they couldn't scratch together a "low-price" luxury model for the Depression.

Cadillac's move downmarket with the 60 series killed the LaSalle.

Shame that there are no longer any American cars that compete in that top bracket that Cadillac, Packard and others occupied in the 1920s. Had they remained intact, today Cadillac would be competing with Rolls-Royce, Bentley and Maybach, not Lexus and Acura.

 

[XP300]

Our first car, when I was about 12, was a four year old 1951 Studebaker Commander Starlight Coupe. I loved it, but it was an oil burner and rust prone, so we got rid of it two years later for a "57 Ford Custom 300. I will always love that Stude, but the Ford was built so much better.

The trouble with Studebaker/Packard is that they didn't have enough money to compete with the big three, GM, Ford and Chrysler. They couldn't afford the yearly model changes that were common at the time. Their engineering was not superior anymore and their build quality was less than great. The same was true of Hudson and Nash, both great cars, whose time had come and gone.

The Packard era (the 1930's) when their cars were built well was long gone. My grandfather had a '37 Packard Club Coupe, with a 3 speed on the floor, that rode like a truck. It was a beast, but it broke my heart when he sold it. Most GMI members would hate to drive those Packards, with no power steering or brakes, no air conditioning and vacum operated windshield wipers, Step on the gas and your wipers stop working. They were beautiful to look at, but not fun to own or drive by todays standards.

Studebakers of the late 40's and 50's suffered from rust problems and production problems. The Golden Hawk was my favorite car in the 50's, a restyle of the 1953 Lowey body, but the '56 Hawk was saddled with an overly heavy Packard engine and rust problems. In '57, they went to the Stude engine with a supercharger. The Packard Hawk was a Stude with a widemouth grill that look like a fish sucking up fish food. I loved it.

The Studebaker GT Hawk was another makeover of the 53 Stude body. It was a styling success, but a sales failure.

I rode in the first Avanti delivered to a dealer in Chicago. It was the car that was going to save Studebaker. It didn't, but had a life of it's own for some time after Studebaker went out of the auto business.

Neither the Hawks, the Avanti nor the Lark could save Studebaker/Packard. RIP.

 

[Smaart Aas Saabr]

I wonder if could we compare it also to Nash-Hudson situation (there also lots of posters on various blog who also compared to British Leyland) or to Peugeot-Citroen?

Also, we could wonder what if Packard had decided to merge with Nash instead of Studebaker if things could had been different?

Eventually Studebaker-Packard was to merge with Nash-Hudson, AMC even began to use Packard V8's and transmissions... but they got mad at each other

 

[t-rex]

Our first car, when I was about 12, was a four year old 1951 Studebaker Commander Starlight Coupe. I loved it, but it was an oil burner and rust prone

Funny how simple geography can change one's perception of a car. Cape Town's on the coast, so pretty much all cars were subject to rust in the old days. But only a few miles inland, South Africa is dry as a bone, so rust isn't an issue. Perhaps that's why I saw so many old examples of Studebakers on trips to towns out in the dry Karoo, but almost none in Cape Town.

Nash/Rambler never did well there. The local assembler, Stanley Motors, also built and sold Rootes and Peugeot and focused all their marketing efforts on the latter brand. Chrysler took over Rootes' sales, and AMC eventually bought out the SA operation. Quality control slipped because they kept switching assemblers, moving from the UCDD plant in East London (now Mercedes Benz) to Nissan's brand-spankin' new plant in Pretoria, then finally to Toyota's Motor Assemblies plant in Durban. The American/Rogue sold decently, as did its Hornet successor, which was, funnily enough, in its last years fitted with the Chevrolet 250-cube six motor and some Holden drivetrain components, and all assembled and sold by Toyota! Jeeps were never sold by AMC there, but by Willys, and later an independent outfit, before leaving the market in '73, only to return a few years later for a brief run, this time being built and sold by Volkswagen!

Hudson bit the dust in the early 1950s, as the Rand was devalued with the Pound, and American cars almost doubled in price.

The Apartheid years, and the government's crazy Local Content Programme made the country a wild and interesting place to build cars!

 

[Bravada]

This is more of a PSA (Peugeot Societe Anonyme) takeover of Chrysler Europe for $1 in 1979. Chrysler was in panic mode, desperately trying not to get bankrupt, so they've got rid of the underperforming (yet still promising) Chrysler Europe arm they've mismanaged for many years as quick as they could.

The buyer was a result of the previous merger of two French heavyweights, Peugeot and Citroen, with Peugeot still trying to figure out the resulting synergies. With Chrysler Europe, whose "better half" was the former Simca, once the largest French automaker, this put three of four French carmakers together in one basket. The French government was all happy to have "saved" Simca, in French hands again.

Within a decade, things went rapidly downhill, PSA almost became insolvent and in the process killed almost all of what was left of Chrysler Europe (aka Talbot) altogether, except for three manufacturing facilities.

The difference was, PSA still had cash.

Chrysler reportedly has some $11 M cash, GM burns a million a month. The merger extends GM's life by a year. Is it even worth it?

 

[doh]

What happened to the dealer's stock of AMC when that merger happened?

 

[American_Muscle]

GM should end as soon as possible production of Chrysler vehicles except Jeeps and minivans. It could rebadge appropriate Pontiacs as Dodges, Buicks as Chryslers and GMCs as Rams.”

IMO...Jeep should stay jeep, and hummer could jump ship with them becoming a model rather then own company (the jeep H2, jeep h3t, etc..this fill voids in the jeep area) Buick and chrysler become the middle luxury, just under cadillac. Dodges and pontiac become the same as well, becomming the performance and car area with the challanger, charger, G8, g6, nitro, and perhaps a redone magnum. GMC's do not become rams, that wouldnt make sence, but the Rams become GMC's...this will finally make a distinct difference in GM's Pickup market, the silverado's and sierras will now be two completely different trucks.

 

[doh]

Hummer is going to be mixed up in this sell off. Cerebus is going to sell off the Jeep name, and it is a great time for GM to off load Hummer (which nobody seems to want on it's own before)

GM will not imerge as owning both Jeep and Hummer, but they may imerge owning Caravan trade mark and it's manufacturing assests.

 

[rsbaker]

I disagree. GM/Chrysler will not devolve into that famous last ditch effort of Studebaker/Packard to save themselves. In a few years I really feel that GM will have righted itself especially if they are able to get some relief from health care costs and the Volt is selling well and also if they get their hands on Jeep. What we probably won't see is much if any remnant of the once mighty Mopar divisions after being absorbed or at best integrated into General Motors

 

[TriShield]

American Leyland is more like it.

Or Chrysler-AMC back in the 1980s.

 

[paul8488]

Chrysler reportedly has some $11 M cash, GM burns a million a month. The merger extends GM's life by a year. Is it even worth it?

To make matters worse (or maybe it's better!), some reports are saying that GM would have to spend about 3 billion of that 11 billion to deal with closing Chrysler... so GM would only survive half a year.

 

[Hoboken Tim]

I wonder if could we compare it also to Nash-Hudson situation (there also lots of posters on various blog who also compared to British Leyland) or to Peugeot-Citroen?

Also, we could wonder what if Packard had decided to merge with Nash instead of Studebaker if things could had been different?

Packard went under because it didn't do due diligence before it bought Studebaker. Curtis Wright then got involved because it wanted Packards
airplane engine business. Studebaker made money for a short time from 1959 to 1960 when they beat the Big 3 to the small car market with the Lark.

 

[jaywestfall]

End this nonsense! Management at GM should be soley focusing on creating, building and selling CLASS LEADING PRODUCT.

 

[marinerbc]

Is there an echo in here?

 

[vcs2600]

Lots of interesting automotive history posts in this thread. :yup: