Many of those who love Packard blame Studebaker for Packard's demise; there is a factual basis for that belief. Packard bought Studebaker believing that Studebaker would make a profit if Studebaker could sell approximately 160,000 cars year. Studebaker's actual "break even" point was actually selling more than 260,000 cars per year because of Studebaker's high labour cost. Studebaker was only able to sell that many for two or three years after World War II when all the American car companies could sell all the cars they could produce.

During the first two model years of the Studebaker-Packard merger (1955-1956), neither company did well, and when Curtiss-Wright came to the rescue with money and management in 1956, a hard choice had to be made. On one hand, Packard could sell a limited number of big luxury cars (in the range of 50,000-75,000 per year) to compete with Cadillac and Lincoln, which did not have big volume sales. On the other hand, Studebaker was able to sell 268,099 autos and 52,146 trucks for a total of 320,245 vehicles its best calendar year (1950).

Studebaker also built different sizes of trucks (tractors, mid-size & pick up), plus military trucks (2 and 1/2 ton, known in the Army as the "deuce and a half"), economy cars (Champions and Larks), sporty cars (Hawks) and station wagons, available with 6-cylinder or 8-cylinder motors. The South Bend Studebaker factory was a model of efficiency compared to the Packard operation in Detroit where they lost their lease on a rented body plant in 1954 (Chrysler kicked them out) and moved their body and final assembly plant to an older building at a different location in Detroit. By 1956, Packards were known for poor quality and reliability at a very expensive price. If Packard had been doing well, then Curtiss-Wright would have kept it and dumped Studebaker.

The decision to keep the Studebaker factory operations in South Bend was a correct one. By 1959 Studebaker reduced its production costs, introduced the Lark and was able to make a profit after they sold 100,000 cars per year. That year they were able to produce Larks at a rate of 80 per hour and sold approximately 130,000 of them while making a good profit in the process. The Studebaker factory in South Bend could always build enough cars. The problem was that after 1960, they could build three times more cars than they could SELL.

Studebaker was saved twice by building smaller cars; in 1939 by the Champion and twenty years later by the Lark. During the 1950s Nash survived (and grew) because it built the small economical Rambler and Studebaker survived because it built the Lark. If Packard had been chosen as the survivor, it probably would have died with the Edsel, if not sooner.

The fate of Packard after it joined Studebaker was remarkably similar to the fate of Hudson after it joined Nash. The big car from Detroit got dumped as Nash found that the road to success was to build smaller cars and the men who ran Studebaker took note of that success as Nash passed them by in sales during the 1950s. The idea of building BIG Studebaker-Packards was dropped by 1957 and those that were proposed in drawings DID look like Lincolns because Ford was going to sell them the Lincoln tooling around 1956. 

Life at Studebaker was good until the early 1960s when the Big Three arrived with compact cars like the Ford Falcon, Mercury Meteor, Chevy II Nova & Corvair, Plymouth Valiant and Dodge Dart. As a result of that onslaught, Studebaker was gone by the mid-1960s and Rambler (aka, American Motors) was gone about fifteen years later, due in large part to a decision to put too much of their money into a large car known as the Matador.

Packard had bad sales years in 1955-1956, but their sales might have been worse without the all the Studebaker dealerships that began selling Packards as a result of the 1954 merger, which nearly doubled sales outlets for Packard. It is very likely that Packard made some sales from customers who went to a Studebaker dealer intending to buy an expensive Studebaker President, Golden Hawk or truck and ended up buying a Packard. It is less likely that a rich customer who went to a Packard dealer ended up driving a Studebaker home instead. 

After Package was gone, Mercedes Benz was happy to share dealerships with Studebaker and made a success of that relationship. Approximately 250 of Mercedes Benz dealerships in the USA today were formerly Studebaker-Packard dealerships.
 

J.L. Jacobson