S-P posted a harrowing $29.7 million loss for the year.ĭespite those setbacks, Nance still held out hopes for all-new 1957 models. Studebaker-Packard still had $50 million in operating capital, but they couldn’t touch most of it without violating the terms of the credit agreement. (Photo © 2010 Robert Nichols used with permission)īy the end of the year, Nance had to tap $9.9 million of the company’s $25 million revolving credit line just to pay for continued operations. This is not the fifties factory unit, which cost a hefty $650 - more than $5,000 in modern dollars. Packard was the first automaker to offer factory air conditioning, back in 1940, but it didn’t catch on and Packard didn’t offer it again until 1953. The process was so cumbersome that only a handful of dealers completed it.
Even Nance’s plan to combine Studebaker and Packard franchises was off to a rocky start. The two divisions still had parallel staffs, often without a clear chain of command, and plans for sharing tooling between Studebaker, Clipper, and Packard were still out of reach. The economies of scale that Studebaker and Packard had hoped to achieve through the merger were nowhere in sight. In September, George Romney informed Packard that AMC would stop buying Packard engines and transmissions in September 1956, costing Studebaker-Packard an additional $3.3 million in lost revenue. A facelift of the Studebaker line for the 1956 model year consumed $15 million. Breaking Raymond Loewy’s consulting agreement for Studebaker styling cost $3 million and S-P had to repay the Defense Department $8 million on its military contracts. The name was a reference to the Packard Four Hundred, a list Packard once compiled of its most prestigious owners.ĭespite brutal headcount reductions in both Detroit and South Bend, Studebaker-Packard was still bleeding money. In 1955–56, it was available only as a two-door hardtop, replacing the previous Pacific model. The Packard 400/Four Hundred series was introduced in 1951. Packard sold more than 55,000 cars for the 1955 model year - quite good considering the production problems - but Nance had to delay the launch of the 1956 models by over a month to clear unsold stocks of 1955 Packards. To make matters worse, the Federal Reserve Board had raised the discount rate, alarmed at the recent explosion in long-term auto loans. By summer, dealers were reducing their orders, anticipating factory rebates for the end of the model year. Packard actually made a profit in March, but it didn’t last. Demand for Packard’s 1955 cars was initially very strong, which made the early production delays that much more frustrating.
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