The American Postwar Car Sellers Market (1945-1949) and the Death of the Independents

June 1, 2019 by  

In late 1945, soon after the official surrender documents were signed by Japan and the allies, thereby ending the Second World War, the federal agencies responsible for managing critical resources authorized the manufacture of passenger cars for the first time since January, 1942

With many popular items under severe rationing during the war, bank accounts of GIs and their families were, if not bulging in cash, were certainly in a much better state than during the dark days of the Great Depression, something that was still very much in the minds of the American people.

As the war progressed, it became more and more difficult to keep the family car running, or for that matter even shod with decent tires. The Japanese had captured most of the world’s rubber-producing countries, so tire makers had to severely curtail production, and reserve what raw materials they still had for the war effort. I remember my mother telling me that during the war, my father, a salesman/engineer (and a dyed-in-the-wool Oldsmobile man), and at 37 years old in 1943, the year he married my mother, was too old for the draft (and I imagine he had health issues due to his 4-packs-of-cigarettes-a-day habit, that probably would have exempted him), bought a used Pontiac simply because it had almost new tires. He drove a great deal selling fire protection equipment for new construction (defense plants, mainly), and even had the coveted “X” sticker on his windshield, which, within the constraints of the law (probably lots of documentation, proving he was indeed traveling to defense plants to help design and supervise the installation of Grinnell-branded fire protection systems), he had nearly unlimited access to gasoline; but not tires! It was a lot slower going to visit his customers, because, in an effort to conserve tires, the national speed limit was cut to 35 miles per hour.

As I am wont to do, I’ve once again digressed. My apologies. It won’t be the last time.

At the end of the war, millions of American consumers wanted a new car. The factories wanted to sell the millions of American consumers’ new cars, but in those late 1945 through 1946 days, raw materials were still fairly scarce. Whitewall tires, for example, were the hardest to get, so automotive accessory manufacturers came up with plastic “beauty rings” that simulated the look of whitewall tires until actual whitewalls were more widely available.

Auto manufacturers knew they were in a huge seller’s market, and knew they could charge whatever they wanted for their products, and could sell anything with four wheels on it. In order to get new cars to market quickly, automakers dusted off the body dies and other tooling from their prewar models, made some very minor trim changes, and sold them as brand new 1945/46 model cars. They knew their customers didn’t care, the pent-up demand was so great. Most of them produced those reworked prewar cars until the 1948 or 1949 model season, when consumer demand had finally been met, and new car sales began to slump. Basically, those people who had money for new cars now had them, and would probably hold onto them for a few years.

Maybe dealers didn’t always have the cars consumers wanted, due to the huge demand. Many dealers’ unpublished “real prices,” were hundreds, if thousands more than the “official,” controlled price. Factories were also more motivated to churn out the more expensive models. Buick, for example, didn’t bring the lower-cost Special model back until around 1950. My father had worn out the various cars he drove during the war, and needed something new. A new Oldsmobile could not be had for any price (or at least not at a price my dad was willing to pay), and so he wound up with a Studebaker. I assume it was a Champion, due to comments my mother made about how my dad put sandbags in the trunk to make the car handle like a bigger and heavier car. I don’t know how long he had that car, but I do know that he traded the Studebaker for a new Oldsmobile just as soon as one became available.

Because the economy was still in a precarious state, with inflation spiking due to the huge money supply (huge amounts of yet-to-be-spent savings), Federal agencies instituted price controls to fix auto prices at least until the economy cooled down a little. Many car dealers did not necessarily feel bound by those same rules, and sold their cars for grossly inflated prices “under the table.” If you complained, there simply wouldn’t be a new car available to you for any price. In addition, the local car dealers colluded, so that they had lists of customers who “squealed,” and again prevented consumers from buying any brand of new car at least in their home town.

It was something akin to the Wild West in those early days following the war. This issue probably affected many more consumer items that had not been available, or were heavily rationed during the war, and it took several years for supply to match up to demand, which had the expected results to consumer prices, which, if they didn’t drop to any great extent, they didn’t go higher, either, due to price controls.

The first auto manufacturer to come out with new postwar designs was Studebaker, of South Bend, Indiana, in mid-1946 (labeled as 1947 models). With famed industrial designer Raymond Loewy as chief consulting designer, Studebaker came out with a novel line of slab-sided sedans with headlights integrated into the front fenders. The coupe had an even more novel design with a wraparound rear window that caused the public to ask the question: “Is it coming or going?” Being the first to market with an all new car (well, all new body, with decades old power trains), demand was great for the independent brand (independent, in this case means any automaker who was not one of the “Big Three:” General Motors, Ford, or Chrysler).

1948 brought several new designs from the more expensive GM brands: Cadillac, Oldsmobile, Buick. Why these? Simple—the premium brands were starting to see some buyer resistance, while they could still sell every Chevrolet and Pontiac they built. Those brands didn’t get restyled for another year, while Cadillac, Buick, and Oldsmobile got another major redesign for the 1950 model year.

Ford Motor Company, and new CEO Henry Ford II, in desperate financial straits, literally hemorrhaging money due to the condition the ailing and senile Henry Ford left the company in, put a top team of designers, engineers, and financial experts together to quickly bring the new 1950 Ford to market a year early. A number of these men were fellow naval officers with whom new Ford CEO Henry Ford II served. They were experts in finance, engineering, and other disciplines. The “whiz kids” as they were called, pulled off a miracle, and the new, modern looking ’49 Ford sold like the proverbial hotcakes, even though the hasty design process left electrical problems, leaky windows, rust, and other quality issues in its wake, though most of these issues were fixed by the 1951 model year.

The demand for new cars right after the war was so huge that the great shipbuilder Henry J. Kaiser teamed up with Joseph Frazer, CEO of the old Graham-Paige company, which he had bought for cents on the dollar in 1944, and created the Kaiser-Frazer Corporation, with their first cars, using numerous off-the-shelf components, including the engine, the modestly-performing but reliable 100 HP, 6 cylinder Continental “226”, transmissions, axles, steering and other suspension components numerous suppliers. Even though the new company suffered from a serious shortage of raw materials, the first Kaisers and Frazers began rolling off the line at the old B-29 plant at Willow Run, Michigan in early 1947. Unfortunately, production ceased in the United States in 1955, due to overproduction, reduced demand for cars that had not been redesigned for a while, and profligate personal spending by the Kaiser family, even going so far as to bring in parts and even raw material by air, at a huge cost. Finally, a valid argument could be made that without a modern V-8 engine, Kaiser-Frazer lost out on a huge selling point. By 1955, even Packard, Hudson, and Nash among the independents, and Chevrolet and Pontiac had all new V-8 engines (Hudson and Nash bought their V-8 engines from ailing Packard during 1955, but in 1956, used an all-new American Motors designed V-8). Kaiser didn’t.

The Price War: Ford vs. Chevy

In 1954, sales management at Ford and Chevrolet decided once and for all to make their brands absolute #1. I believe Chevrolet held a very slim lead. So, Ford and Chevy both lowered the wholesale prices of their cars to their dealers. Then, they shipped huge numbers of cars that the dealers didn’t order (or even want, for that matter), and ordered them to sell them or risk losing their valuable franchises. It got so bad that dealers sold their excess stock at cost, or even below cost. They even did the biggest no-no of them all by selling excess inventory to used car wholesalers. I don’t recall from the stories I read that the Ford and Chevy dealers attempted to put some miles on these cars to make them appear to be used, or if they did some trickery with ownership records, but in the end, Ford and Chevrolet both sold record numbers of cars, and the ones who suffered were Chrysler and the Independent manufacturers.

Chrysler

Chrysler, being a smaller manufacturer, foolishly maintained the same number of brands as the behemoth, General Motors: Plymouth, Dodge, Desoto, Chrysler, and Imperial (not to mention the Dodge truck brand), shown in order of their market position. The Desoto brand was introduced as a mid-price platform when Walter Chrysler was unable to purchase the Dodge Brothers company. Soon after the Desoto brand had been launched, the owners of the Dodge Brothers company came back to the negotiating table and it was then acquired, which left Walter P. Chrysler stuck trying to sell two brands that occupied the same market position, plus or minus a hundred dollars or so.

In the early 1950s, Chrysler was in the final years of a rather frumpy design that was dictated by outspoken CEO K.T. Keller, who promoted the idea of “bigger on the inside, smaller on the outside,” and that the car’s roof should be tall enough to allow a man to sit in the front or back seat while wearing his hat. This meant that the cars from Chrysler Corporation looked “stubby” with a tall roof line, while the competing Ford and GM products were swoopy in comparison. This would not be remedied until Chrysler incurred devastating losses through the early-mid 1950s. Keller finally saw the light and hired talented stylist Virgil Exner in about 1953, who was given carte blanche to revamp the whole for 1955, at a pricetag of over $100 million.

Unfortunately, this didn’t help sales in 1954. Chrysler was losing money hand over fist and the price war was a major factor (along with their old-fashioned styling). They built fine automobiles with some of the best engineering on the planet, but that wasn’t enough. They also took far too long to introduce a fully automatic transmission. They had offered several variations with a semi-automatic transmission that required a clutch to switch between driving ranges and reverse. The trade name was “Fluid Drive,” but additional names were added: Fluid Drive with Tiptoe Shift, Gyromatic, Gyrotorque, Hy-Drive, and so on. But it wasn’t a full automatic like GM’s Hydramatic, Powerglide, and Dynaflow. The Powerflite transmission, introduced in 1954, made consumers forget all about the slow-shifting Fluid Drive cars.

Fortunately, the 1955 model year was an enormous success. In Chrysler Corp. advertising, the slogan was “the 100 million dollar look,” as Chrysler went to the banks and borrowed a bunch of money to finance the styling and retooling which, fortunately for them, was just the thing to do, and all went well for them until the 1957-58 recession that spelled the end of the Desoto brand just a few years later. Basically, there were far too many medium-price brands for the market to support. This situation spelled the end of the Edsel brand almost before it was even launched.

The Independents

Many of the Independent American auto manufacturers (Studebaker, Packard, Kaiser, Frazer, Nash, Hudson, and also-rans like Tucker, Davis, and Crosley) came out of the war with fat bank accounts, but found it difficult to get back into the swing of making passenger cars, after being on the US Government gravy train with fat defense contracts for the previous 3 or 4 years.

Studebaker

America’s oldest vehicle manufacturer (they began building buggies and wagons in 1852), based in South Bend, Indiana, was the first with a postwar design as described above. Unfortunately, they also had antiquated factories, and in an effort to avoid costly labor unrest (strikes), they paid wages far above what auto factory workers were making in Detroit at the time, and they paid extravagant stock dividends, all at the expense of investing in the company’s future. The all new line that came out in 1953 brought forth one of the most beautiful designs that came out of the 1950s (the coupe), and one of the frumpiest designs (the 2-door and 4-door sedans). The sales and marketing folks dictated the sedans, as they were the bread-and-butter product. The factory was geared up to build up to 70% sedans and 30% stylish coupes. The demand turned out to be the complete opposite. Furthermore, they rushed things into production so quickly that a number of body panels on the coupes didn’t fit correctly, delaying that product launch for several critical months. This wound up costing Studebaker a huge pile of money to fix, not to mention the lost sales opportunities. Another issue was a common point in the front fender, just ahead of the front door, that rusted—often after only a few months. Stories in the collector automotive press state that it would have cost Studebaker a couple of dollars per car to fix it, but that was rejected, because a couple of dollars could mean millions off the bottom line. This problem remained with every Studebaker manufactured from 1953 until the very last ones came off the line in Canada in 1966. The American Postwar Car Sellers Market (1945-1949) and the Death of the IndependentsAmerica’s oldest vehicle manufacturer (they began building buggies and wagons in 1852), based in South Bend, Indiana, was the first with a postwar design as described above. Unfortunately, they also had antiquated factories, and in an effort to avoid costly labor unrest (strikes), they paid wages far above what auto factory workers were making in Detroit at the time, and they paid extravagant stock dividends, all at the expense of investing in the company’s future. The all new line that came out in 1953 brought forth one of the most beautiful designs that came out of the 1950s (the coupe), and one of the frumpiest designs (the 2-door and 4-door sedans). The sales and marketing folks dictated the sedans, as they were the bread-and-butter product. The factory was geared up to build up to 70% sedans and 30% stylish coupes. The demand turned out to be the complete opposite. Furthermore, they rushed things into production so quickly that a number of body panels on the coupes didn’t fit correctly, delaying that product launch for several critical months. This wound up costing Studebaker a huge pile of money to fix, not to mention the lost sales opportunities. Another issue was a common point in the front fender, just ahead of the front door, that rusted—often after only a few months. Stories in the collector automotive press state that it would have cost Studebaker a couple of dollars per car to fix it, but that was rejected, because a couple of dollars could mean millions off the bottom line. This problem remained with every Studebaker manufactured from 1953 until the very last ones came off the line in Canada in 1966.

Studebaker nearly ran out of money in 1954, and was only propped up due to what might today be called fraud, as they spun their financials during merger talks with luxury carmaker Packard. Granted, had Packard’s accountants spent a little more time examining the books, they would have discovered that the rosy picture Studebaker’s executives created was instead a whole bunch of thorns and snake oil, and that Studebaker’s finances were in near ruin. The biggest lie was that Studebaker would make their break-even point of nearly 300,000 units, but instead barely sold 200,000 cars in 1954. As time went on, the financial people looked upon 1954 with great nostalgia, considering that soon after, sales volume went into a free-fall from which Studebaker never really recovered.

Even though Packard, who had the cash, supposedly bought Studebaker, and even got their CEO, former appliance executive James Nance, appointed as head of the new Studebaker-Packard corporation, Studebaker quietly took over, as Packard executives left in droves. Additionally, Packard, suffering from quality problems and rumors of its demise, wound up being the red-headed stepchild in South Bend. By 1957, Packard, one of America’s fine cars, became, due to Studebaker’s financial woes, a facelifted Studebaker that fooled no one. In Packard’s final year, 1958, they built all of about 2,600 cars.

Studebaker was desperate for cash and tried just about everything to generate more sales. Once such experiment that actually succeeded after a fashion was the aptly-named “Scotsman.” Studebaker took the most inexpensive model in their lineup, the Champion, and savagely de-contented the car. Other than the bumpers, virtually all chrome was eliminated. Where trim, or things like hubcaps couldn’t be removed, they were painted. Only the driver got a sun visor. Insulation was removed. Rubber mats replaced carpet. The inside door panels were cardboard. The panel between the back seat and the trunk was removed. Springs were removed from the seats. On two-door models, the rear windows were fixed and could not be rolled down.

The amazing thing, though, was that the Scotsman sold! It actually outsold the standard Studebaker models (Champion, Commander, President, and Hawk) combined, which of course meant that the Scotsman took away sales from higher-profit models. That said, the Scotsman, while it provided only low profit margins, did bring much needed cash to Studebaker, allowing them the financial resources to introduce the Lark model in 1959, which bought Studebaker another seven years.
So, Studebaker suffered from several things: 1. Loss of sales to Ford and Chevrolet during their price war. 2. Excessively high internal costs, resulting in far fewer profits per car than the big three could generate. 3. Slower sales and reduced profits meant they could not come out with new models, which were critically needed in the style-conscious mid-late 1950s. 4. The buying public, fearing Studebaker was about to fail, stayed away from the showrooms in droves. 5. The merger with Packard ruined Packard and only provided enough cash to allow the mortally-wounded Studebaker to limp from one disaster to the next.

Packard

The Packard Motor Car Company was a luxury brand, every bit the equal of Cadillac and Lincoln. They emerged from WWII flush with cash, but the postwar environment was quite different than the prewar one. In order to save itself during the Great Depression, Packard entered the medium price market with the models 110 and 120, which were enormous sales successes, but this action also “cheapened” the Packard name, making it more difficult for Packard to sustain the exclusivity of the Packard brand. Some have argued that Packard should have established a separate brand in those prewar years. They were a bit late in doing so in the postwar era. In the late 1940s, Packard introduced the Clipper model, and that was perhaps the problem. It was a Packard Clipper, which was a medium-priced car, once again. And it looked too much like the senior Packard models. In the early-mid 1950s, Packard finally established Clipper as a separate, cheaper brand, but by then it was too late. The Packard brand had been damaged too much at this point to attempt to make a play at Cadillac. Cadillac had the gigantic resources of General Motors behind them. They introduced a modern V-8 engine in 1949. Packard did not do so until 1955, getting by with a hugely heavy and inefficient, though smooth and quiet operating inline 8 cylinder engine. Packard styling was very much behind the times from the postwar era through 1954, and simply not competitive with Cadillac, Lincoln, and the new upstart, the Imperial. Their blew their final opportunity with their brand new 1955 models with modern V-8 engines and many engineering innovations, which were rushed into production before sufficient testing was performed, into a factory that was too small, and huge quality problems, at the worst possible time for Packard, were a regular feature. Even though most of the problems were solved by the 1956 model year, it was too late. Packard management felt they needed a partner like Studebaker to broaden their appeal as a full-line manufacturer. They merged in 1954. Unfortunately, that full-line manufacturer was Studebaker with their tired, obsolete designs and their financial performance was akin to plunging into the abyss.

Nash

Nash Motor Company of Detroit and Kenosha, Wisconsin, built the Nash Ambassador and Statesman models, which sat strongly in the Oldsmobile/Buick price range. The compact Rambler (which replaced their “600” model) sold in the Pontiac/Oldsmobile price range, yet was a successful model because it was trimmed to a higher standard and sold at a premium price to solidly middle to upper-middle class suburbanites as a second car that no one needed to be ashamed of. Their later Metropolitan model occupied a slightly downscaled place in the model hierarchy. Nash’s CEO, George Mason, had the idea that the most successful independents should merge together to put up a strong front against the big three. He partially succeeded when Nash acquired the ailing Hudson brand, and of course Studebaker and Packard merged. The belief among many historians was that at some point, Nash-Hudson, now called American Motors, would then acquire Studebaker-Packard. Unfortunately, Mason, who was extremely obese and was a diabetic, died from pancreatic cancer in 1954, putting an end to that dream. With his death, George Romney, later governor of the state of Michigan, and a US presidential candidate, his second in command, took over, and set about to freshen the American Motors product line. First to give the Hudson line its own unique look, and using a concept later known as badge engineering, made the Metropolitan and Rambler a Nash or Hudson brand by simply changing the branding emblems. He also got the stylists to trim the body panel partially covering the front wheels, which looked old-fashioned, make it harder to change tires, and made the Nash turning circle much wider than its competition. The restyled full-sized Nash and Hudson products were not a success and were dropped by 1957, along with the Hudson brand, leaving the Rambler to carry on alone.

Hudson

Hudson came out with its “step-down” models beginning in 1948. These were solidly conservative, yet streamlined sedans, mostly equipped with a flathead 6 cylinder engine. The lower body and suspension made it an amazing handling car, something racers in NASCAR figured out pretty quickly. A modified intake manifold was created and a second carburetor added, making the “Twin-H Power” a performance leader—even with the hoary flathead 6. The Hudson’s handling was so superior, it beat all the bigger, more powerful Detroit iron from Ford, Chevrolet, Dodge, Chrysler, and others in the corners, only to be trounced in the straightaways. The superiority of Hudson’s design allowed the cars to overcome the lack of straight-line performance and won a surprising number of races.

By 1951, Hudson had to make a decision. They were not a wealthy company, and felt they needed to develop a new car. It was that or restyle the rather obsolete-looking full-sized Hudsons. The decision was to go for the new car, a compact called the Jet. When it was introduced in 1953, it landed with a thud, and was completely ignored by the car buying public. The Jet looked odd, to say the least. It was heavily chromed at the direction of the sales and marketing folks, and senior management wanted a taller roof to make it easier…yes, yes…easier for men to wear their hats while driving—the same argument that almost killed Chrysler. I mentioned odd. Here was a chromey (for higher-end models) high-roofed sedan (that made it look narrow), and it was a compact. Compact cars seemed to be the Holy Grail of automakers, and other than the Rambler, all failed in the marketplace, and usually took the brand with them. Why? In the early 1950s, prosperity and the projection of same was very important to the suburban American. Note the popular phrase “keeping up with the Joneses.” There was a lot of truth in that phrase. Basically, owning a compact car as the primary family car told one’s neighbors that they were poor. It was only slightly less damaging to one’s reputation if the compact was a second car for the wife, for example. American Motors did very well in that niche market with the Rambler and the smart little Metropolitan. The rest, the Kaiser Henry J, the Willys Aero, the Hudson Jet, and others, killed their parent companies due to the huge resources squandered by cash-strapped companies who should have known better. Small cars and the “foreign jobs” in this era of McCarthyism also shouted “Different” when most Americans wanted to be as anonymous as possible. People who drove cars like that were suspected of being un-American by their neighbors, almost as un-American as college professors driving their little MGs and wearing funny berets and tweed coats with the leather elbow pads. Most car buyers would rather buy a two or three year old American sedan or station wagon, before they would buy a new compact.

Hudson was at death’s door when George Mason stepped in and offered to buy Hudson, and thereby creating American Motors. Hudson production was immediately moved to the old Nash factory in Kenosha, Wisconsin. The Jet was killed. The traditional Hudson models were killed because the Nash factory could not accommodate the “step-down” design. So, Nash stylists did a pretty amazing job making the full-sized Hudsons at least look different than the Nashes built on the same production line. The Rambler grew slightly in size in 1954 to accommodate a four-door design for their sedans and station wagons. This facilitated an all-new design for 1956, which started off slowly, but by 1957, sales picked up, and in 1958, did quite well, considering there was a recession going on. Just like Studebaker taking their bottom-line Champion model and further de-contenting it, the American Motors folks took the 1955 Rambler body dies, made a few tweaks, and came out with a new economical and lower-priced compact sedan, which they called the American. It sold like the proverbial hotcakes. From 1955 to 1957, the Rambler and Metropolitan were “badge engineered” with Nash or Hudson emblems based on sales orders. The full-sided Hudsons, due to falling consumer confidence and the recession, was killed when it couldn’t even muster 4000 sales in 1957. The full-sized Nash’s sales weren’t much different.

Nash (redux)

Much of the Nash story was told in the Hudson paragraph above. What came out of the chaos within American Motors was the can-do attitude of AMC’s engineering and styling teams, who performed styling miracles with the kind of money that Ford or GM would call pocket change. Unfortunately, the full-sized Nash and Hudson cars, with sales somewhere below basement level, had to go, as did the brands. Rambler was the main product now, with the plucky British-built Nash Metropolitan trailing behind.

Why did the Rambler succeed where the Aero Willys, Hudson Jet, and Kaiser Henry J failed? Mainly, the Nash sales and marketing teams envisioned the Rambler and to a lesser extent the Metropolitan as being a more upscale second car, so they were trimmed out with expensive looking upholstery, thick carpets, automatic transmissions, power brakes, power steering, and many other options to make them more attractive to car buyers, and they succeeded.
American Motors rode a financial roller coaster for the rest of their days, ending only when they were acquired by Chrysler in 1989. Chrysler wanted the profitable Jeep models but had to buy the rest. Within months of the acquisition, Chrysler killed all of the AMC models, save for the surprisingly innovative Eagle models, basically AMC Hornets and Gremlins with a modern 4-wheel drive system, though even they didn’t stay around for more than a year or two.

Kaiser-Frazier

Kaiser Motor Company emerged from the ashes of the Graham Paige company, acquired by Joseph Frazier for pennies on the dollar, during WWII. He knew the immediate postwar period would be a sellers market, and he wanted in. Not having the kind of capital needed for a venture like this, he teamed up with Henry J. Kaiser, famed shipbuilder, to build a new line of cars. With a small team, Kaiser and Frazier designed and manufactured two completely new lines of automobiles: Kaiser and Frazier. The Kaiser was a medium-priced family car, while the Frazier went up a few rungs into Buick and lower-range Packard country. They were able to get to market as quickly as they did by purchasing as many parts off the shelf as possible, including engine, transmission, axle, and so on.

The only manufacturer to come out with an all-new car before Kaiser-Frazier was Studebaker.

K-F had a huge run up until around 1950 when the initial buyers market filled the sales channels with enough product that the market switched to a buyers market. By 1951, things were pretty dire, and 1952 was even worse. There were so many leftover 1952 cars that Kaiser re-serialized many of these cars, so they could sell them as 1953 models.

By now, Joseph Frazier had lost interest, tired of the constant battling with Henry Kaiser, sold his interest in the company and left for other opportunities.

The Kaiser line was in trouble. The bodies hadn’t been changed in quite awhile. They didn’t have a V-8 engine, though in 1954, they added a supercharger to the ancient flathead “6.”

Their biggest mistake, however, was buying into the same argument that the other Independents did — building a new compact car. This car, ultimately named the Henry J, was a cute, almost elfin design with fairly large tailfins. Like the Independents all learned for themselves, they couldn’t give away the Henry J. They even did a special version for Sears, called the Allstate. It sold even worse than the Henry J, in spite of the marketing power of Sears, Roebuck, and Co.

In 1954, K-F acquired Willys, mainly to use the sales volume of their Jeep products to help their bottom line. Following the 1955 season, Kaiser abandoned the passenger car market, selling the tooling for the Kaiser sedan, and the Aero Willys to a group of investors in Brazil. The 1955-designed Kaiser remained in production in Brazil, with few changes, other than changing the speedometer to metric, until the early 1960s.

Willys

The Willys-Overland Company of Toledo, Ohio had been a passenger car maker for many, many years. They had their financial ups and downs during the Depression of the 1930s, but were able to weather the storm. While they didn’t exactly win the contract to produce the new Jeeps for the War Dept., they did win the design contract, so while they build a goodly amount, Ford built many more, but Willys did get a few bucks for each Jeep that was made by other companies. After the war, they still owned the original patents and copyrights. They created civilian versions of the Jeep, with pickup trucks and all-steel station wagons, but they still wanted to get back into the passenger car business, so in 1952, they introduced the Aero Willys, a compact, upscale sedan, nicely styled, powered with an innovative “F-head” 6 cylinder engine. Sadly, another “thud” in the marketplace. Willys-Overland only survived by being acquired by Kaiser in 1955, and soon after ended production of the Aero Willys. The Aero did live on in Brazil, however. A consortium of investors bought the Kaiser and Willys passenger car tooling and began producing them “down south.” The Kaiser lasted until the early 1960s, but the Aero, thanks to several smart facelifts, including one done by famed American industrial designer Brooks Stevens, lasted until the 1970s.

Kaiser, of course, continued with Jeep production, which was quite profitable. They sold the Jeep tooling and name to American Motors in the late 1960s or early 1970s, and the Kaiser name faded away.

So…..

There were many factors that caused the demise of the independents.

  1. Compact Cars: Squandering resources on compact cars when there was clearly no market for them. This is pretty much what killed Kaiser, Hudson, and Willys, though Willys was able to continue as a relatively healthy competitor with their tough little four-wheel drive trucks and Jeeps. The rest of the independent manufacturers had no resources left after their adventures with compact cars to refresh their bread and butter models. The Nash Rambler survived because it was marketed as an upscale second car, well-equipped with accessories.
  2. Marketing and Sales interference: The Hudson Jet was a classic example. The battles between Marketing, Sales, and Senior Management created one of the oddest looking ducks of the 1950s, and there were plenty of odd looking ducks around in that era. This was another huge factor in the death of Studebaker. During those critical years from 1955-1958, the Sales and Marketing folks banged the big drum for more chrome, bigger fins, etc. For some models, it looked like the chrome was put on with a trowel.
  3. Economies of scale: The independents obviously produced far fewer cars than the “big three.” Sales volume means huge savings. I read somewhere that the Studebaker Champion was in a model class equivalent to a basic Ford or Chevrolet sedan, but due to the internal costs (the unit price of 100,000 bolts is a lot more than the unit price for 10,000,000 bolts), it had to sell at the price of a Pontiac or Oldsmobile, or they had to shave their profit margins by offering their cars at a lower price. Every time a volume auto manufacturer like GM, Ford, or Chrysler can take another $10 out of their manufacturing costs (labor and materials combined), when amortized over, say, 4 million cars, this is a cost savings of $40,000,000! Due to their lower production, manufacturing costs for the independents were significantly higher than those of the “big three,” often making the independent’s products uncompetitive. When I worked in the electronics industry, a part of every working day was devoted to cost reduction, and we sometimes did some crazy things to lower our costs by just a few pennies per device, because it all adds up. Again, if you can save ten cents in a product that has production volume of 50,000,000 units, you have just saved $5 million dollars with that 10 cent cost reduction!
  4. The Ford vs. Chevy price and sales wars of the early-mid 50s: Ford and Chevy were locked in a battle to be #1 at any cost. They sold cars at below cost, they forced cars on their dealers that were not ordered (threatening to take away their lucrative franchise if they complained too much). Many cars were wholesaled to used car dealers, because the dealers simply needed to get those cars off their lot, as another couple of transporters would be there soon, with 25 more cars they had to sell. The prices were often so low that it would be foolish to look at one of the higher-priced independents.