Jul 02, 2009 - 04:30 AM
By Myno Van Dyke
My father was a farmer and although he never made a lot of money, he always had a steady income. He believed in the "mixed" farm. We had five acres of turnips, an acre of potatoes, six cows, a few pigs, an acre of strawberries and we raised veal calves. My father managed a 50-acre apple orchard as well. All of the apples were not in one basket.
Some years apples were good and some years they were not. My father never went bankrupt. He was always able to pay his bills. Since I drive a Studebaker, folks often tell me that the Studebaker Corporation went bankrupt back in 1966 when they went out of the car business. But they didn't go bankrupt. They treated their business just like my father did.
The Studebaker brothers were blacksmiths and foundry men and in 1852 they opened their first shop in South Bend, IN, making horse-drawn wagons and buggies. By 1901, they were making electric cars and, a few years later, gasoline-powered cars in Canada and the U.S.
They continued to produce a variety of interesting vehicles. In 1954, they were in trouble financially and were absorbed by the Packard Corporation. In December 1963, they closed their factories in South Bend and moved their entire production of cars to Hamilton, ON for the production of 1965 and 1966 Studebakers. They were using General Motors engines provided by McKinnon Industries in St. Catharines. On March 17, 1966, the last Studebaker rolled off the Hamilton assembly line.
In the early 1960s, Studebaker realized it could do much better financially by manufacturing products other than vehicles. By 1963, it owned the Clarke Floor Machine Company (commercial floor polishers and sanders), CTL (a missile/space technology company), Franklin Appliances (home appliances), Gravely Tractors (garden tractors and mowers), Onan Engine and Generators (portable generators for RVs and farm use), STP Corporation (which produced engine additives), Schaefer Refrigeration (commercial refrigerators), Studegrip Tire Studs (studs for snow tires), Paxton Products (which manufactured engine superchargers) and Trans International Airlines.
By 1967, the company, with all of its diversified units, was called Studebaker-Worthington. A few bones of the former auto maker still exist today as Studebaker-Worthington Leasing which provides leasing services for manufacturers.
Like General Motors and Chrysler, the Studebaker Corporation went into receivership and or bankruptcy protection several times. Each time they managed to get back into business. However, by 1963 they realized they were losing out when it came to trying to compete with The Big Three. GM, Ford and Chrysler were mass-producing cars and making a much smaller profit per car but still making good money because of the volume.
Why did Chrysler and General Motors end up drowning in debt? I wonder who was watching the books. What kind of accounting/reporting system did they have in place? What was the plan? Did the board of directors know how bad things were? Were the shareholders kept informed? Did they make any attempts to diversify? You really have to wonder whether these companies are worth saving. So today, Chrysler and General Motors are owned by us, the taxpayer. I think I would feel a lot better owning an apple orchard or five acres of turnips.
Newcastle resident Myno Van Dyke has a keen interest in history. He has appeared in this space several times before.
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