(UPDATED FROM 11/24, 2023)
A March 1964 Car Life article offers a fascinating take on why Studebaker shifted production from its South Bend main plant to a much smaller one in Hamilton, Ontario — which turned the brand into an import from Canada.
Among the major players, Sherwood Egbert comes off the best in writer Gene Booth’s account. The recently departed Studebaker President was lauded for being a “dynamic spirit” who gave the automaker “more legitimate public notice than it had had since the days of [Raymond] Loewy’s ‘European style’ sports coupe” (1964, p. 12).
History books generally say that Egbert stepped down from the presidency in the fall of 1963 because of health reasons, but Booth didn’t mention that. Instead, he said Egbert was “forced out” with two years remaining on a five-year contract. Booth speculated that this could have been the result of differences with the company’s board of directors, such as Egbert’s “insistence on spending heavily to reengineer the passenger cars for 1965 in view of the obviously poor sales performance of the heavily restyled 1964 models” (1964, p. 12).
What kind of changes was Egbert advocating for 1965?
It’s unclear from the article what Egbert had in mind for 1965. Was he championing another round of incremental sheetmetal changes to Studebaker’s family cars and the Hawk along the lines of what Brooks Stevens had sketched? Or was it Loewy’s so-called Avanti II lineup, which had reached prototype stage, or Stevens’s low-slung concept cars?
My guess is that it was Door No. 1 — incremental changes. A full redesign would have been too cost prohibitive. Thomas E. Bonsall estimated that close to $20 million would have been needed to tool up for a major redesign even if it drew upon existing components (Bonsall, 2000).
Studebaker had recently borrowed $25 million to purchase a non-automotive company, and the banks agreed to extend the payment time frame. “However, the banks refused to lend any more money for the auto division unless the corporation agreed to put up its acquired divisions as collateral. That was something the board was unwilling to do,” noted Patrick Foster (2008, p. 160).
Booth criticized ‘mediocre’ management, weak dealers
The only criticism Booth levied against Egbert was that he did not sweep out some of the “intellectual deadwood” when he was hired in 1961 (1964, p. 12).
Booth was also critical of the automaker’s board of directors. For example, he stated that Chairman Randolph Guthrie “pompously characterized” Studebaker’s 7,000 employees as having “bled us white” despite their years of loyalty and “consistently accepting less than industry standards in pay and fringe benefits” (1964, p. 12).
Perhaps the most eye-opening detail presented by Booth was that the automaker’s 1,800 dealers failed to cover 70 percent of the nation. This had spurred Egbert to open company stores in two-dozen large cities. To make matters worse, a goodly number of dealers sold less than 20 cars per year or placed an emphasis on other makes.
Car Life was unclear about management’s intentions
The Car Life article didn’t squarely address whether Studebaker management intended to stay in the automotive business. For example, there was no discussion about how much staffing capacity the downsized operations would have to update the styling and engineering of its cars.
The only hint of the future was a quote from Egbert’s successor, Byers A. Burlingame, who said that “few major styling changes are planned during the next few years” (1964, p. 13).
Studebaker staff member Ed Reynolds later told Richard M. Langworth that there “was no engineering department at Hamilton, and no one from South Bend moved there. It was never intended to continue permanently. The move was to use up some of the material and parts on the shelves, and dealer franchises called for repurchase of all cars and parts should we stop building cars. So we kept building cars” (1979, 1993; p. 161).
A ‘blue sky’ idea is pitched for saving Studebaker
Booth seemed to assume that Studebaker’s weak dealer network doomed its prospects. “In the absence of hustling dealers, it is perhaps academic whether inspired and visionary company policies would have accomplished much anyway,” he lamented (1964, p. 13). Even so, Blooth argued that “there were many avenues that an alert management could have investigated” to generate higher automotive sales. For example:
“Studebaker could have negotiated the purchase of the forthcoming A-body frames and understructure from GM, perhaps the modern, lightweight 289 engines from Ford, design and fabricated its own exterior sheet metal and interior appointments, and assembled a really ‘all new’ car for the crucial 1964 marketplace with all of the quality workmanship for which the company us justifiably famous. Such ‘blue sky’ thinking is unfortunately alien in South Bend and what may have been — and still could be — a good idea died.” (1964, p. 13)
With the benefit of hindsight, Booth’s idea sounds implausible. Although purchasing engines was doable, it’s hard to see why General Motors would have been willing to share a brand-new platform in its first year of production. In addition, such an endeavor could have been costly unless Studebaker only modestly changed the styling of a GM car, such as the Chevrolet Chevelle.
Sporty-car bias colors article’s diagnosis of problems
Booth was overly optimistic about Studebaker’s prospects in the wake of South Bend’s closure. He noted that the demand for cars might surpass supply because the Hamilton plant could produce only 30,000 units with two shifts.
A new breakeven point wasn’t stated by Booth, but it was assumed to be much lower than the 110,000 figure that Egbert had achieved when South Bend was still open. Langworth (1979, 1993) later reported that Hamilton’s breakeven point was 20,000 units.
As it turned out, Hamilton had plenty of capacity for Studebaker’s new sales level. Production fell to under 20,000 units in 1965 and then down to roughly 9,000 units in 1966. However, the latter figure did not represent a full model year: Production ended in March of 1966.
Booth recognized that Studebaker didn’t have an easy situation ahead but he also did not explicitly discuss whether South Bend’s closure was the beginning of the end of automotive operations. Perhaps that was a bridge too far for a car buff magazine which relied upon advertising to explicitly discuss the specter of Studebaker cars becoming orphans.
“The greatest task before management is to rebuild public confidence in the corporation and its cars,” Booth concluded. That would require rekindling excitement in the automaker’s products. “Can Studebaker sedans, as imports, be as exciting as domestically produced Avantis and success on Bonneville’s Salt Flats” (1964, p. 13)? The implied answer seemed to be “no.”
Once again Car Life displayed its bias toward sporty cars. Earlier in the article Booth described the 1953 Loewy coupes as “keeping the company from sinking sooner into oblivion” (1964, p. 12). Despite legendary styling, I would argue that the coupes hastened Studebaker’s decline because they initially resulted in disastrous quality-control issues and over the long run undercut the automaker’s already shaky economies of scale (go here for further discussion).
NOTES:
This story was originally posted on Nov. 24, 2023 and updated on July 17, 2026. Production figures are from Langworth (1979, 1993).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Bonsall, Thomas E.; 2000. More Than They Promised: The Studebaker Story. Stanford University Press, Stanford, CA.
- Booth, Gene; 1964. “Goodbye, South Bend.” Car Life. March issue: pp. 12-13.
- Foster, Patrick; 2008. Studebaker: The Complete History. Motorbooks International, Minneapolis, MN.
- Langworth, Richard M.; 1979, 1993. Studebaker 1946-1966: The Classic Postwar Years. Motorbooks International, Osceola, WI.
ADVERTISEMENTS & BROCHURES:
- oldcaradvertising.com: Studebaker (1965); Studebaker Avanti (1964)
- oldcarbrochures.org: Chevrolet Chevelle (1964); Studebaker Avanti (1964)
PHOTOGRAPHY:
- Milwaukee Art Museum Brooks Stevens Archives
Sherwood Egbert was indeed dealing with major cancer surgery and long recovery times. As noted in Automobile Quarterly, pp. 228–275, Vol X, 3rd Q, 1972; “Cancer surgeries and lengthy recuperation absence allowed the board to ease him out of office, replacing him as president with Byers A. Burlingame.”
Egbert resigned at the end of November, 1963; however, he did not die immediately as he established a consulting firm in Los Angeles in 1964. Sherwood Harry Egbert passed away on July 30th, 1969, at age 49.
From everything I have read about the Studebaker-Packard Corporation, Egbert was hired by the board of directors in February 1, 1961 from the McCulloch Corporation to replace Harold Churchill and do two things: 1.) Get Studebaker out of the automobile business as quickly as legally possible with regards to such things as franchise agreements; and 2.) Apply $ 94-million in tax-loss credits to merge with other profitable businesses. These were the conditions set forth by the outside directors led by financier Abraham Malcolm Sonnabend to keep the company going through 1962. Instead, Egbert went against his board, who used his illness to replace him on November 24, 1963.
This is the first I read of GM furnishing Studebaker with GM A-frames. Presumably this is what=if chitchat that we all get into whenever the demise of the independents comes up.
The Stevens updates to the GT Hawk for 1965 were quite attractive. Looked like a Chrysler turbine car. It’s too bad it wasn’t produced.
Studebaker’s Dec. 9th/63 devastating notice to close South Bend manufacturing was made by the new “bean counter” president Byers Burlingame, just 2 weeks after the resignation/dismissal of Sherwood Egbert, whom we know would have liked to see production of cars remain as part of the corporate identity. That’s a pretty short time to study, assess, consult, plan and announce an exit strategy from such a large enterprise! There HAD to have been investigation work done for the exit prior to Dec. 9th.
Likely unknown to the Car Life author, Studebaker hired an asset divestment specialist in early December to start January 1st,’64. Mr. Ed Dunbar came from Curtis-Wright and his job was to sell/lease off assets the company used in South Bend to make vehicles.
Mr Dunbar was the guy who used the last Canadian-built car as a company car for some 18,000 miles before it was pulled from service in 1969 to be part of the corporate vehicle collection that was the core of what is now the Studebaker National Museum. He was a good friend of a friend of mine whom I drove to South Bend for Mr.Dunbar’s funeral a few years ago. Mr. Dunbar told my friend that when he was hired, the decision had already been made to exit the auto manufacturing business entirely and close that division of the corporation!
When the Canadian-built ’64 to ’66 Studebaker is referred to as an import, I always cringe. Studebaker was as American as “apple pie” and Benjamin Franklin! The major body and frame components were made in the US, the engine was designed and made by General Motors (a US company, last l heard), the ignition was Delco or Autolite, the transmission was Borg-Wagner,the tires Firestone, the axle Dana, the steering box either Saginaw or Ross, and the major body parts stamped in South Bend using Stelco steel. The corporate head office was always in the US of A. It was only welded and wrenched together in Canada (along with some Canadian components like wring and upholstery). If Benjamin Franklin lived for a significant period in Europe (which I understand he did), does that make him less American?
Finally (whew), Studebaker’s final blow and AMC’s big problem was the attractive mid-sized cars introduced by GM for ’64. A Studebaker sales numbers analyst predicted that the restyled Studes were not going to “make it” and the corporation acted upon that. For 1964, AMC lost 80,000 or so sales from ’63 numbers and by ’66 they sold half of what they did 3 years earlier. As someone wisely said, it didn’t matter that the independents would periodically play a good hand. The Big three had a lot more chips.
To paraphrase Bob Dylan “You don’t need a consultant to see which way the sales are goin’ “. For 1965, Studebaker sales ran ten cars per dealer per year. That means a lot sold less than that. Even considering dealer size in those days, the dealers aren’t keeping more than three or four on the lot. Now back in those days it was more common to order a car from a grocery list of options, you still want something in stock to sell before the buyer comes to his senses. You go to other dealerships where there are a dozen or so Chevelles, Fairlanes, or Belvederes on the lot. And it’s unfortunate. Put a Chevelle badge on the leading Studebaker Cruiser design it would sell 300k per year. Now, I know the Avanti II “prototypes” were just self propelled mockups, but I don’t know if they’d work as mainstream people movers. To me they look like large versions of European compacts. As far as Steven’s dream cars go, that wojld be throwing when all is said and done throwing a lot more than 25 million in good money after bad. Egbert should have followed the board’s mandate. He would ha e gone down in history as the man who saved Studebaker.
The Car Life article is the perfect example of wishful thinking winning out over a realistic analysis.
Corporate management wanted to exit the auto business, but in a manner that enabled the corporation to avoid paying damages or other costs to the dealers. It thus made sense to continue production in Canada on a limited basis…while counting on the publicity from the South Bend closure to essentially kill vehicle sales. As sales dwindled, the number of dealers also dropped.
It’s my understanding that the Board of Directors had been looking for a way to exit the automobile business since the late 1950s. The Lark – done as cheaply as possible – temporarily revived Studebaker sales, but not enough to finance the all-new models the corporation desperately needed. And the Lark certainly could not finance the revamped production facilities that the corporation also needed. The South Bend factory was woefully outdated by the late 1950s.
Studebaker as an automaker was essentially finished by 1956. The war years and postwar seller’s market extended the life of the car business, but by 1956, it was really over.
Thanks for the great article. It reinforces the feeling that Studebaker was thrown away by its then leadership. I’ve read they turned away Mercedes about a purchase. Being so close to WW2 I can see some of the issues. I have also read that Toyota was speaking to Studebaker when Nixon, who was a lawyer for the board in NYC, got involved and tanked it by bringing in Nissan.
The part that really hurts is the Feb issue of Car Life. They sent a journalist to Studebaker to help assemble a car that past October. The car was a high performance prototype for the engineers to drive around. It was a red Daytona and really predicted the M cars and AMG of today’s BMW and MB.
This article is great for pointing out how badly run parts of the company was run. The dealer network itself speaks volumes. Same with the dead weight management. When Nance took over Packard they were able to get out 200 VPs who used the company as their retirement fund. No doubt Studebaker had its share too.
Thanks for bringing this up and look at the prior issue of car life for a very different Studebaker.
I asked to Grok about what if the idea of using GM A-body have come to fruition and here what Grok answered:
“-Plausible Alternate Outcomes If It Happened
Assume a limited deal goes through (maybe GM sees it as low-risk volume or a way to offload some capacity, or Studebaker pays a premium). Here’s a reasoned speculation:
Short-Term Survival Boost (1964-1966):
Studebaker gets a modern midsize car lineup (sedans, wagons, maybe a coupe/hardtop) with contemporary styling by Brooks Stevens or Raymond Loewy influences. It could undercut GM slightly on price while offering “premium” Studebaker quality, unique trim, and perhaps sportier tuning.
Better performance and efficiency than the aging Lark/Hawk/Cruiser. Sales might rise modestly (tens of thousands more units) due to competitiveness in the hot midsize market. The Avanti could still exist as a halo fiberglass model.
Hamilton, Ontario production (post-South Bend closure) benefits from simpler assembly using GM parts. Lower breakeven point helps.
This delays the end. Real history: Production plunged and ended in early 1966. Here, they might limp to 1967-68 or beyond with updated versions.
Longer-Term Challenges:
Brand dilution: It risks becoming “just another Chevelle clone.” Studebaker’s appeal was unique styling and engineering; copying GM erodes that. Buyers might prefer the real GM cars with better dealer support and perceived reliability.
Economics of scale: Even with shared parts, Studebaker’s tiny volumes (under 20k-30k/year possible) mean high per-unit costs vs. GM’s hundreds of thousands. Profits thin.
Competition intensifies: Ford’s Fairlane/Torino, Chrysler’s intermediates, and later imports (Toyota, Datsun) squeeze everyone. The muscle car boom favors GM’s bigger marketing muscle.
Corporate fate: The parent Studebaker Corporation was already diversifying (appliances, etc.). Auto ops might get spun off, sold, or wound down slower. No full revival—independents like AMC struggled too. A merger (e.g., with AMC or another) becomes more likely, or they pivot harder to trucks/imports (as they tried in reality with VW, Isuzu ideas, etc.).
South Bend might close anyway due to inefficiency, but the brand lingers longer as a Canadian “import.”
Best-Case “What If” Wins:
Stronger 1964-65 models build momentum. They leverage the A-body’s success for a performance image (e.g., supercharged or tuned variants).
Better cash flow funds minor unique models or trucks (Champ pickup updates).
Survival into the 1970s as a niche player, perhaps focusing on wagons, performance variants, or early personal luxury—similar to how AMC hung on longer. Unlikely to become a major player again, but avoids the abrupt 1966 end. Avanti II might tie in better.
Realistically, this probably only buys 2-4 extra years at best. The core problems—tiny scale, high labor costs relative to output, weak distribution, and inability to match Big Three investment—persist. History shows independents faded (Packard earlier, AMC later). Studebaker’s diversification already positioned the corporation to survive without cars.
It makes for a fun “what if”—imagine a sleek Studebaker-badged 1965 “Lark” or “Cruiser” on A-body running gear with distinctive styling. But the structural issues were probably terminal without a deeper partnership or radical pivot (e.g., to trucks/SUVs earlier). The article’s author rightly called it implausible with hindsight.”