AUTOS: And Then There Were None

By an overwhelming vote of their stockholders, the only two remaining independent automakers last week gave up their independence. In Detroit, Packard stockholders voted 89.9% to join forces with Studebaker; at the same time in Wilmington, Del., Studebaker stockholders voted 99% to merge with Packard. The new company (official name: Studebaker-Packard Corp.) will have a full line of low-to high-priced cars for the competitive battle ahead. Its combined assets: $251 million. But Studebaker-Packard's biggest asset is the opportunity to compete better by pooling the resources of the two old independents.

For its part, Packard will get the advantages of the slick styling that has made Studebaker a pacesetter in postwar auto trends, will also get the benefits of Studebaker's strong dealer organization around the U.S. Packard, which has long had trouble getting dealers to take on its big cars in fringe markets, will start off by doubling up with Studebaker to sell Packards in 1,000 towns too small to support a full-time Packard agency. In turn, Studebaker will profit from Packard's solid engineering and its strong financial position.

Out of a Rut. As president of the new combine, in stepped able James J. (for John) Nance, 53, the automaker who pulled Packard out of the rut two years ago. Coming to Packard from General Electric's Hotpoint division (TIME, May 19, 1952), Nance found a company suffering from old age. Packard's plants were among the mustiest and least efficient in the industry; its sales organization was without drive or direction; its executives were aging and set in their ways. The company made money, but largely because of defense production and the happy fact that 1952 was still a seller's market for automen.

Nance's first move was to jack up Packard's personnel. The company had no retirement program; Nance started one, and in the process lowered the average age of his 25 top executives from 59 to 46. He brought in cost analysts to check Packard's entire operation, turned penny savings into dollars. At one point, for example, he replaced hand upholstery work with a pair of automatic staplers. Savings: $1.45 per car, $100,000 per year.

Into the Race. This fall, Packard will replace its ancient Detroit operation with two new plants as modern as any in the industry. The brand-new V-8 engine for Packard's 1955 cars will be made at a $47 million plant in Utica, Mich., ten miles outside Detroit; the bodies, formerly made by Briggs, will now be made by Packard itself at a plant recently leased from Chrysler, thus saving a substantial amount of money that otherwise would go to subcontractors.

With Studebaker Chairman Paul G. Hoffman and Studebaker President Har old Vance as board chairman and executive committee chairman of the new corporation, Nance has a top executive team that agrees with his own economy-minded approach. Studebaker's bosses have already started the ball rolling by persuading 8,500 workers at their South Bend plant to accept a 14% wage cut (TIME, Aug. 23). Jim Nance & Co. will :need every additional economy they can find. In 1954's auto race,* the Big Three have gobbled up 94% of the market, given notice of an even faster pace in 1955.