Big 3 automakers fight Studebaker's fateby John Paul (jpaul@wsbt.com)
Thousands were out of work when Studebaker's South Bend plant closed in December of 1963. Now Detroit's Big Three face many of the same challenges, and fear they'll face the same fate. SOUTH BEND — In December 1963, Studebaker's South Bend plant shut its doors leaving thousands out of work. The U.S. government swung into action. Multimedia Related Content
Now Detroit's Big Three face many of the same challenges as Studebaker. A $34 billion bailout may determine whether the company will meet Studebaker's fate. In order to avoid this from happening — empty buildings and thousands out of work — the CEOs from Chrysler and GM say billions in aid is their key to survival. A decision from Congress will leave either automakers or taxpayers seeing red. "The 50s and 60s were not kind to Studebaker," said Andrew Beckman, an archivist at the Studebaker Museum. More than 40 years have passed since the last Studebaker vehicle rolled off the assembly line in South Bend. Almost 7,000 people lost their jobs in December 1963. The government responded with aid in the form of training programs. "The game stays the same but it's the players that change," Beckman said. Now it's Studebaker's primary rivals seeking aid of their own — $34 billion worth. "They too, like the Big Three automakers of today, were faced with high labor costs, higher overhead and this combined with declining sales did not do much for Studebaker's bottom line," Beckman explained. Fast forward 45 years. GM and Chrysler's CEOs tell Congress they'll run out of money by year's end. They are fearful their employees and their suppliers will be out of a job. "It's going to be a global impact," Beckman added. "We've got 3,300 employees that are in St. Joseph County that have jobs directly related to work that is being done for the automotive industry," said Phil Damico of the St. Joseph County Chamber of Commerce. Studebaker's share was only four percent of the market back then. Yet, outside suppliers still counted on the company. "Studebaker purchased brakes from Bendix, there were many outside suppliers, there were many industries in South Bend that relied on Studebaker for a lion's share of their business," Beckman explained. As Congress decides, the economic impact is unpredictable. "From a confidence standpoint, you certainly don't want any more unrest or uneasiness, as it relates to unemployment," Damico said. Will one of Detroit's Big Three go the way of South Bend's Studebaker? Only time will tell. Most PopularMore Good Stuff |
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