1954:
As the year began, Nash President George Mason was disappointed at losing Hudson to Packard, but it was not a major concern. What was a major concern was the rumor mill had both Pontiac and Plymouth introducing overhead valve V8s for ’55, putting the Ambassador and Statesman even farther off the pace with their old inline sixes.
Packard had a V8 under development, and Mason (above) had had discussions with Packard President James Nance about buying them for the Nash Ambassador. The Packard engine would put the Ambassador back in competition, if there were no problems in development and if it was ready for production on schedule. The price Packard was talking about was another matter. To make matters worse, Packard insisted on providing the V8 only with its own Ultramatic transmission, a complex and expensive piece. Due to its size and cost, the Packard engine would be no help for the smaller Nash Statesman, which was suffering from being underpowered even more than the Ambassador.
Searching for an alternative, Mason turned to the Studebaker V8. The Studebaker had been in production since 1951 and had earned a reputation for ruggedness, but its displacement, only 232 cubic inches, was even smaller than the existing Ambassador 6. With few alternatives, two mechanics from the engine lab were sent out to local Detroit junkyards looking for a few 232s for Engineering to look over. Examination of the engines revealed there was some room to both bore and stroke the engines, to a maximum displacement of 289 cubic inches. Their estimate of the 289’s output with a high compression ratio and 4 barrel carburetor was slightly over 200hp, on par with the 320 that Packard was offering.
Mason wrote a letter to Harold Vance expressing interest in buying Studebaker engines, modified along the lines the Nash engineers sketched out. With the Chevrolet/Ford price war devastating Studebaker sales, Vance was open to the extra business that Nash could provide. A meeting was arranged in South Bend, with Romney leading the delegation of Nash engineers as they met with Gene Hardig’s team, who developed the V8, to explore the feasibility of the modifications. Hardig’s team did not let on at the time, but they had been considering enlarging the engine themselves, and took the Nash engineer’s suggestions as confirmation of their own thinking.
Very little time elapsed before there were prototype 289s running in the Studebaker Engineering Building and streaking around the Studebaker proving grounds in test mules. The rapid work was much a factor of the simplicity of the modifications as it was the growing desperation for new business in South Bend as the flow of red ink became a torrent.
Mason’s concern grew as Studebaker’s rapidly deteriorating condition jeopardized the entire V8 program. If Studebaker went bankrupt, the tooling for the V8 could be tied up in court far beyond when Nash needed to have the engines in production. How could access to the V8 be secured and the engine produced without delay? After discussions with Romney far into the night, Mason picked up the phone and called Vance, “would you consider a merger of our two firms?”
The proposal Mason laid out in that conversation was a consolidation of operations: body building and final assembly would be consolidated in Nash facilities, while foundry and engine production would be consolidated in South Bend. Studebaker production in South Bend would end as soon as possible to stem the bleeding, surplus buildings and equipment sold off. Studebaker dealers would be selling retrimmed senior Nashes as Studebakers, plus the compact Rambler. Nash dealers would be offered the Studebaker truck line. But would the union agree?
Vance and Paul Hoffman called an all hands meeting in the Notre Dame football stadium that August to lay out the situation. While the merger would result in some 60% of Studebaker workers losing their jobs, without the merger, Studebaker would surely fail and everyone would lose their jobs. Additionally, for the merger to work, the Studebaker workers needed to agree to work under the provisions of the Nash contract. Since the end of WWII, Vance and Hoffman had been too willing to buy labor peace with increases in pay and low productivity that had reached uncompetitive levels. The Nash workers had a good contract and lived comfortably, but it was a big pay cut for those in South Bend. Paul Hoffman in particular had a good relationship with the union and Harold Churchill, the person designated to be the President of the South Bend division post-merger was respected by everyone, so the workers were willing to listen to what they had to say. The President of Local 5 worked tirelessly to persuade the rank and file to accept the Nash contract. The workers voted to accept the Nash contract, but registered their distaste for it by voting in a new President of Local 5 at the next election.
With the green light from the Boards of both companies and the UAW, the merger closed on October 1st. One week later, George Mason died. Mason had delegated much of the detail work to Romney, so the work of the merger continued unabated.
One of Mason’s last decisions was to introduce a curved windshield on the ’55 senior Nashes. The decision was made so late that production of the ’55 models was delayed until January. As it happened, this worked out perfectly as it provided time after the closure of the merger for work to be completed adapting the Nash engine compartment to take the Studebaker V8s, the 289/4bbl combination in the Ambassador, and the bored block with the original 232 crankshaft, creating a 259 with a 2 barrel carburetor providing desperately needed power for the Statesman. Nash used the same Borg Warner manual transmission as Studebaker, so the bell housing was an off the shelf Studebaker part. The three months provided time to produce the tooling for a bell housing to mate the V8 to the Hydramatic transmission that Nash had been using for several years. The ’55 Nash used a new front clip. Again, that three month delay provided time to reroute the new stamping dies from Nash’s usual vendor to the Studebaker stamping plant in South Bend.
The pieces were falling into place, but could Romney turn the company around in time?
1955
1955 opened with the most turmoil Nash had ever experienced. Romney worked far into the night with the heads of Kenosha Assembly, Milwaukee Body and South Bend. The pieces had to fall into place on time and in the right sequence for the merger to work.
The first ’55 Nash came off the line on January 6th, an Ambassador with a 289 and Hydramatic. It was already sold. Coon Brothers in metro Detroit had full payment, in cash, in hand. The Studebaker V8 line, installed only 5 years earlier, was state of the art with machining done in a single automated line 300 feet long. Productivity of the V8 line was so much higher than the old Ambassador six line, which dated from the mid ’30s, that the V8 could be offered at only a $90 premium to the six. The take rate for the V8 shot to over 70% immediately for both the Ambassador and Statesman. By March, Romney decided to drop the sixes and make the V8 standard in both of the senior models.
In South Bend, due to the surge in demand from Kenosha and soaring truck sales in their first year of the V8 being available, along with modest recovery of Studebaker sales with the end of the GM/Ford price war, a second shift was needed on the V8 line.
The plan had always been for the Rambler to replace the Champion, so the end of the Champion six line was already in sight. Harold Churchill called Romney and explained that the V8 line was running at full capacity for one shift and needed another shift, but “Church” did not want to hire new people for the second shift, when the Champion six workers would be laid off in a few months. Romney agreed to start shipping Ramblers to Studebaker dealers immediately, thus eliminating the need for building Champions, and Champion sixes, releasing the Champion six line workers to man the second shift on the V8 line.
When the AMC artwork people complained about needing more time to prepare Studebaker Rambler sales materials, Romney asked, “why prepare Studebaker Rambler materials at all?” He continued “let’s remove the Nash branding that is on the literature and cars now and sell them simply as Ramblers, through both Nash and Studebaker dealers.”, and thus Rambler was born as a stand alone brand from the urgency of the situation.
The deed was done in a week. The Champion six line was idled and the last Studebaker Champion rolled off the South Bend line a week later. Lacking the Champion six, the elderly Commander six became the base engine for the truck line for the balance of the year.
In May, the dies for the Studebaker versions of the Nash models, cars which wags soon named the “Stash” arrived in South Bend for installation in the presses, and Studebaker passenger car production came to an end.
While the South Bend body and assembly buildings fell silent, the engine plant hummed with activity. Nash had been planning to introduce an OHV version of the 196 in the fall of ’55 as the base engine in the completely redesigned ’56 Rambler. The OHV 196 was nearly a new engine, sharing only crank and rods and a few machining operations with the old flathead. Churchill suggested the idle Champion six line be retooled for the 196. Little extra work would be required compared to converting the 196 line in Kenosha and, as the South Bend line was idle, the conversion could be done without disrupting 196 production on the Kenosha line. Romney gave the go ahead and retooling began.
On November, 1st OHV 196 production began in South Bend to begin building stock in Kenosha for the start of production of the ’56 Rambler. Production at Kenosha engine ended three weeks later. On December 15th, the first ’56 Rambler rolled off the Kenosha line, powered by a South Bend built 196.
As the holidays arrived at the end of 1955, silent buildings were everywhere in American Motors. The Kenosha foundry and engine plant were idle as were the South Bend body, assembly and trim plants.
Thousands had been laid off in Kenosha and South Bend. But next to those ghostly relics, lights blazed in the departments that had survived the consolidation as they produced in volumes they had not seen since the end of the post war seller’s market. More importantly, the flood of red ink was ebbing.
1956
Senator Joe McCarthy’s influence was on the wane by the beginning of 1956, but Romney needed his help.
During the war, Nash had built Pratt & Whitney aircraft engines. As part of this engine program, engine test cells had been built on the grounds of the Kenosha plant. Designed to withstand an exploding engine, the test cells resembled huge chimneys 40 feet tall, built of foot thick poured concrete. Removing them to clear the space for auto production would be an expensive undertaking, and there were over 30 test cells.
Romney wrote a letter to Senator McCarthy asking if there was something he could do to help with the cost of removing the cells so AMC could expand. Senator McCarthy offered an amendment to a Defense Department appropriation bill entirely funding the removal of the test cells. No one was willing to take on “Tailgunner Joe” on such a minor issue, and the amendment was approved. Demolition was scheduled over AMC’s summer shutdown, when 30th Ave along the east side of the plant, where the cells were, could be closed. Romney’s facilities program was on its way.
All of the iron casting work had been moved to Studebaker’s excellent foundry in South Bend, so all the equipment was removed from the Kenosha foundry and scrapped. New car repair and shipping was moved from Building 35 into the old foundry building. Building 35 and the finishing department wing that extended north along 30th Ave from the foundry were torn down.
In South Bend, buildings dating from Studebaker’s horse and wagon days were torn down, clearing the area north of Sample St for employee parking, so the other lots in the area Studebaker had bought for parking could be sold.
The truck body line was moved to the modern plant on Chippewa Ave on the south side of the city. The two car body lines were disassembled and placed on the conveyor to the old assembly building, where they were stored. Offices were set up in the engineering building and the old Administration building vacated. By the end of the year, half of the former Studebaker complex in downtown South Bend would be disposed of, leaving the area south of Sample St, where the foundry, engine plant, stamping plant, offices, engineering and shipping dock were all concentrated.
Everything was ready for the new construction to start in 1957, except for the financing. Romney had an appointment with a group of insurance companies to make his case for a loan, but the outcome was not a sure thing as these same insurance companies had just turned Packard down.
Packard President James Nance had outbid Mason for Hudson. Mason had looked at Hudson as a dealership grab, as he had no interest in the Hudson products or facilities. When Nance had taken over as President of Packard, he had developed two strategic objectives: establish a stand alone mid-market brand and bring body building in house. Hudson met both of those objectives as it was an established mid-market brand and owned a body plant, and Nance was determined to win a bidding war no matter what the cost.
Everything seemed to go well at first. The Packard body dies were moved to the Hudson plant on Conner Ave. The bodies then were trucked to E. Grand using the body trucks Hudson already owned. The 1955 Hudsons were retrimmed short wheelbase Packards using the old Hudson 308 and a small displacement version of the new Packard V8.
The roof started to cave in when it became apparent Packard had rushed its new V8 and Twin Ultramatic, and Torsion-Level suspension into production with nearly no testing. Warranty claims expense was stratospheric and the cars quickly gained a bad reputation. Engineering eventually solved the transmission and suspension problems, but never successfully corrected the engine’s oil feed problems. Then Packard introduced an electric gear selector system, in place of a mechanical linkage, again, untested, and another crop of marooned Packard owners was born when they could not shift the transmission out of Park. The press hung the “troubled” label on Packard and customers stayed away. When Nance asked for a loan to develop an all new car, the insurance companies looked at the falling sales and operating losses and said “no”.
Against that backdrop, Romney’s position was only slightly better. He had spent heavily on the reorganization after the merger, plus developing the OHV 196, and the all new ’56 Rambler. The ’56 Rambler had originally been intended as a ’57 model, but it was pushed out a year early and suffered severe quality and reliability problems.
Fortunately, the senior Nashes and Studebakers were a different story: a well developed platform, with a well developed engine, which provided the Nash customers with the horsepower they had wanted and provided Studebaker customers with the wider, roomier interior that they had wanted, and they provided a stabilizing influence on the company. Romney was able to convince the lenders that their improving financial picture would be improved further with the new construction he wanted to finance and the loan package was granted.
1957
1957 was a time of birth, and death, at American Motors.
With the financing arranged, and a large area of cleared space on the west side of the Kenosha complex, construction started on extending building 44 into a new body plant.
Since its founding, Nash had been trucking bodies from a subcontractor in Milwaukee, Seaman Body Corporation. Nash eventually bought Seaman outright, but continued to truck bodies the 40 miles to Kenosha as the return on investment never seemed to work to build a new body plant in Kenosha.
Unibody construction, which AMC used, has the downside of giving the cars a complex structure which provides many areas were moisture and dirt can be trapped and start rust. To provide better rust protection, AMC body engineers had developed a process of dipping the entire assembled body in primer, rather than spraying primer on as had been done in the past. Dipping could get primer into areas that spray would not reach and ensure a uniform thickness of primer. Modifying the existing body lines in Milwaukee to incorporate the dipping process would require a significant investment.
When comparing the cost of modifying the Milwaukee body lines to accommodate the dipping process, versus building a new body plant in Kenosha, with the dipping process designed in, and saving the extra cost of shipping assembled bodies from Milwaukee, the numbers started to work in Kenosha’s favor. In a meeting of the senior management in Detroit where the option of a Kenosha body plant was discussed, Harold Churchill reminded Romney that all the equipment from the Studebaker body plant was sitting in storage in South Bend. The equipment could be shipped to Kenosha and installed at lower cost than buying new, then body production could be shifted from Milwaukee with minimal disruption in flow to the assembly plant. That sealed the decision, The orders were given to demolish old buildings in Kenosha to clear the needed space as plant engineering inventoried the Studebaker equipment and began designing the new body lines as plans were drawn for the new body plant to come on line for the ’58 model year.
As the steel for the new body plant rose, Romney faced another decision. The senior Nash platform had not been updated since 1952. The skirted front wheels, a favorite of George Mason, had been eliminated, but the body was showing its age. An all new body would require a major investment of AMC’s already stretched finances. Additionally, a horsepower race was under way. Midmarket models that the Ambassador competed with were moving to engines well beyond 300 cubic inch displacement. The old Studebaker V8, as strong and as durable as it was, could not grow beyond the 289 already in production. The McCulloch supercharger could provide the additional power, and the V8 could easily take the pressure, but Kaiser’s experience with that supercharger had shown it to be very troublesome in daily use. A new senior platform, would require an all new engine to power it.
Romney’s inclination had been to focus on small cars as the big three did not compete in that segment. The high cost of developing both a new senior platform and a new larger engine, sealed the senior’s fate. The decision was made to produce a stretched version of the ’58 Rambler, itself receiving it first restyling, as the new Ambassador. This route had the advantages of much lower cost than an entirely new model, and a stretched Rambler would still be within the 289’s ability to provide competitive performance. With the ’58 line entirely based on the Rambler, the decision was made to market them exclusively under the Rambler name. When the last ’57s rolled off the line in Kenosha, the names Studebaker and Nash passed into history.
Related CC Reading:
Packard + Chrysler: Ask The Man Who Owns the 100-Million-Dollar Look
Curbside Classic: 1964 Studebaker Challenger – This Challenger Never Had a Chance
Car Show Classic: 1964 Studebaker Daytona Convertible – Studebaker’s Last Gasp Of Fresh Air
Perfectly constructed alt-history! As I read it, I started to think “Hey! I’m thoroughly familiar with the story of the merger, but I never read this part of the process!”
That’s the mark of excellent alt-history!
Nash + Studie would have been a better marriage in terms of complementary skills. Nash needed V8s and automatics, and Studie needed competent management and quality production. Hudson didn’t contribute anything but the dealers, which Nash could have gained anyway after Hudson failes.
Persuaseive case. One question: Why would they use the Hydramatic instead of the Borg Warner DG developed for the Stude V8?
Please correct me if I am wrong but didn’t Nash and Hudson merge, while Studebaker and Packard combined as part of Mason’s failed plan to combine all four?
Yes. This is an alternate reality “What If”.
Thanks for a well-done alternate reality thought experiment. There’s a lot here that makes sense and works, although I do have a few niggling issues about some of the details.
FWIW, the Studebaker V8 was about 50lbs heavier than the (real) AMC V8, which was also quite heavy. All Ramblers with the V8 (like the Studebakers) were nose heavy, as these “big block/small displacement” V8s were just too heavy for these relatively light cars. The extra 50 lbs would have exacerbated the problem a bit further, but admittedly not by a huge amount.
I have a bigger problem with your plans for the AMC six:
The OHV 196 was nearly a new engine, sharing only crank and rods and a few machining operations with the old flathead. Churchill suggested the idle Champion six line be retooled for the 196. Little extra work would be required compared to converting the 196 line in Kenosha and, as the South Bend line was idle, the conversion could be done without disrupting 196 production on the Kenosha line.
It is the machining operations on the blocks (transfer lines) that are huge, complex, very expensive to change, and difficult to move, as these transfer line machines are all set up for a specific bore spacing. That’s why the bore spacing is typically not changed, even with a new generation of engines, such as AMC’s gen1 and gen2 V8s. Totally different engines; but same bore spacing in order to keep using the same massive machines to machine the block.
So there’s no way that South bend could start producing the 196 without either the Nash 196 transfer lines being moved (with massive effort) to South Bend, but why do that? In order for South bend to start producing the 196 (while Kenosha also produced it) that would require a massive investment in new transfer line equipment of the sort these companies would never contemplate and would make no sense.
BTW, Romney didn’t “spend heavily” on the ohv 196; it was a classic ohv conversion of the flathead 196, which of course allowed them to keep all of those very expensive transfer lines for machining the blocks. It was done on the cheap. What was expensive was Romney (actually) building their own V8, which required new transfer lines (used for decades until the last AMC V8 was built).
Then there’s this:
Harold Churchill reminded Romney that all the equipment from the Studebaker body plant was sitting in storage in South Bend. The equipment could be shipped to Kenosha and installed at lower cost than buying new, then body production could be shifted from Milwaukee with minimal disruption in flow to the assembly plant.
I’m struggling to see how Studebaker’s BOF body building equipment would be of any/much use to build the unibody Ramblers. There’s considerable differences, but maybe some? I rather suspect Studebaker’s body building equipment was rather old.
So the end result is that Kenosha built all the cars (Ramblers) and Studebaker built the engines, right? But then there’s this line:
In May, the dies for the Studebaker versions of the Nash models, cars which wags soon named the “Stash” arrived in South Bend for installation in the presses, and Studebaker passenger car production came to an end.
I’m not understanding this. Are these the large cars? You’re suggesting that Studebaker could suddenly switch to building unibody cars? That would be quite the trick. So for how long were these “Stashes” built in SB? I’m a bit confused by this.
Enough nit-picking, as I realize it is just a thought experiment. But in the big picture, I’m struggling to see what AMC got out of this merger. Seems to me little or nothing, as without the merger they ended up with their own (slightly lighter and more modern) V8 engine. Well, there’s the dealer network, but then Nash got that from Hudson too. Seems more like a wash either way.