Studebaker were once one of the largest car producers in the United States, before they faded into crisis and obscurity in the 1960s. What happened? How did a company fall so far, so quickly? In this article, we’ll take a look at the company’s history, from their ancient birth to their rapid decline.

Just as Peugeot began as bicycle makers, and Lamborghini can trace its roots to tractors, Studebaker did not begin with the motor car. In fact, their history began long before it was even invented. Back in 1740, Peter Studebaker, newly arrived from Rotterdam, built a home in Maryland, and began to produce wagons the next year. The family business proved fruitful, and spread like wildfire across the Thirteen Colonies. Five of Peter’s descendants, Henry, Clement, John Mohler, Peter Everst, and Jacob Franklin, would be key to the foundation of the first major Studebaker company.

Clement and Henry were trading as metalworkers in South Bend, Indiana in 1852, making parts for wagons. This was to be the true beginnings of the company, which would flourish from its Midwestern home. Around this time, John Mohler was working in the same trade on the other side of the country, in Placerville, California, near Sacramento. The gold rush came and went, boosting business tremendously for all three of the brothers. In 1858, John would move back to Indiana, bringing with him thousands of dollars that he used to finance his brothers’ business, which by this point had begun to supply the U.S. Army. John would later buy Henry’s share in the company, as he was “tired of the business” and “wanted to farm,” according to the company’s official history. Peter was running a general store in Goshen, Indiana which also distributed wagons. An early showroom, you might say. The Civil War and Westward Expansion resulted in annual sales of $350,000, a staggering amount of money at the time. In 1868, the Studebaker Brothers Manufacturing Company was formed, with Clem as president, and Peter and John serving as secretary and treasurer, respectively. In 1875, Jacob Franklin was brought into the company, and oversaw what was described as “the largest vehicle house in the world.” Said factory produced a dizzying variety of horse-drawn carriages. Following some rough times in the mid-1880s, President Benjamin Harrison ordered a set of carriages, and despite a depression in 1893, the company kept right on going.

Come 1897, the company had a new chairman, Fred Fish, John Mohler’s son-in-law. Fish had been pushing for the development of a “horseless carriage” for several years, and the company’s engineers went to work. In 1902, as part of the larger boom in electric vehicles, Studebaker Electric began producing cars, with the first gasoline models rolling off the production line two years later.

Flash forward to February 1911, and the company was incorporated as the Studebaker Corporation. That same year, electric vehicles were discontinued. The new corporation faced a significant problem, however. The company had previously entered into a distribution agreement with E-M-F, an automobile manufacturer, in what had been hoped would be a big boost for the company. The E-M-F cars proved to be Ford Pinto levels of unreliable, earning the notorious acronym of “Every-Mornin’-Fixit,” among many others. To solve this, Studebaker Corporation launched an impressive scheme. Mechanics would visit every unsatisfied owner and replace defective parts. While this ended up costing the company $1 million, it undoubtedly went a long way to repairing their reputation. Following a massive order from the British government during World War I, and its accompanying engineering advancements, the company was making $10 million per annum by 1918.

In the 1920s, numerous leaps forward were made by the corporation. In 1926, they became the first manufacturer in the United States with a controlled outdoor proving ground for their vehicles. This was just one of the major improvements made to Studebaker’s factories in the 20s. In 1922-23, massive new buildings were added to the South Bend plant, and the brothers avoided tariffs for sale to the British Empire by utilizing a plant in Walkerville, Ontario.

The Great Depression hit hard at Studebaker. The whole company’s fortunes had been pinned on a new budget car, the Rockne, but its hoped-for success did not materialize. Debts had mounted to $6 million, and, following lay-offs, the company entered receivership. In 1933, the former president, Albert Erskine committed suicide. His legacy, however, was untainted, as that same year the company received hefty financing from Lehman Brothers, was making a profit, and 224 new dealerships were opened. In 1939, their newest car, the Champion, proved to be a big success, doubling Studebaker’s sales numbers.

During World War II, the company had 17,000 employees spread across three production plants in South Bend and Fort Wayne, Indiana, and Chicago, with the Detroit plant having closed during the depression. All three were owned by the government during the war, producing engines for the B-17 Flying Fortress, along with various other essential components. Of course, vehicle production didn’t completely cease. From 1941-1946, Studebaker produced the US6 2 1/2-Ton Truck, with many examples being sent to the Soviet Union as part of a lend-lease agreement. Such trucks are still popular as militaria in Russia today. The company also produced the personnel carrier, the M29 Weasel, which were even used in the Korean War.

Studebaker had prepared well for the economic boom that followed World War II. In 1947, Studebaker launched an all-new car, as opposed to the revisions of 1942 models which had dominated the first flourishings of the postwar car market. The Studebaker Champion and Commander models, marketed under the slogan “first by far with a postwar car,” helped pioneer the much-beloved design cues of the late 1940s and 1950s, featuring bullet-nose front ends, gun-sight hood ornaments, and wraparound rear windows. Thanks to designers like Raymond Loewy and Brooks Stevens, Studebaker cars featured designs at both ends of the postwar spectrum. From the clean and serene Starliner and Starlight, to the European-looking and highly-polished President Speedster, the company helped define style in an industry that was searching desperately for a new look to call its own.

Cracks in Studebaker’s skillfully-laid foundations began to appear in the early 1950s. In 1953, Ford and GM were engaged in a massive price war, with Ford also massively increasing production that year. They had recruited ten statistics experts from the air force, who became known as the Whiz Kids, who oversaw logistics and organization with elan. Combine this with new, cautious management at South Bend, and the path to ruin was beginning to be walked. It wasn’t just stiff competition that was proving troublesome for the corporation: labor costs were on the up and quality control issues were rearing their ugly heads. Experts warned Studebaker that they could only drift for 10 more years. The following year, the company began to make a loss, so a takeover of Packard, who were in a better position, was sought.

Unfortunately, Packard were not made aware of just quite how bad the situation at Studebaker was. The Eisenhower administration stepped in to aid the ailing corporation, suggesting that the company seek a partnership with aircraft manufacturer Curtiss-Wright, bringing in the company’s president, Roy T. Hurley, in an attempt to save itself. Hurley sold the old Detroit Packard plant, and returned a new plant on the city’s Conner Avenue to Chrysler, who had leased it to the company. Studebaker’s employment policies were made stricter, and the corporation became the U.S. importer for Mercedes-Benz.  Too strapped for cash to create new models, Studebaker-Packard opted to retool the now-aging Hawk body. Bolting fins onto the old car’s fenders, something of a vanity project of Hurley’s, proved to be polarizing and remains so to this day.

Come 1959, there were no new Studebaker cars rolling out to showrooms across the country. In the early 1960s, the company made several last ditch efforts to correct its path. The Packard name was dropped, and Studebaker began to diversify into a bafflingly varied selection of fields. In 1963, Studebaker found themselves owning the airline Trans International, the tractor builder Gravely, the space and missile technology company CTL, and refrigerator manufacturers Schaefer. The cars of this era were actually pretty solid, however. Of particular note is the Avanti, which rolled out for the 1962 model year, an Italian-influenced grand tourer that was years ahead of its time.

A 1962 strike at the South Bend plant, as well as widespread consumer fear of purchasing a car from a dying company, had essentially spelled the end for the company. In December 1963, the venerable South Bend plant was shut down, with the Hamilton, Ontario plant remaining the only active Studebaker plant until 1966. Here, the company put out the Cruiser line, powered by Chevy engines. The company withdrew from the automobile business altogether on St Patrick’s Day, 1966. The company sought a partnership with Nissan, attempting to rebadge their cars for U.S. sale, but their offer was declined, due to then-attorney Richard Nixon asking Gordon Grundy, President of Studebaker Canada, to contact Toyota as well. Toyota were insulted at being the second-choice, and once Nissan found out about the other negotiations they too refused the offer.

The dealerships either closed, switch allegiances, or became Mercedes-Benz dealers, while the General Products Division of Studebaker was acquired by Kaiser Industries, later bought out by AMC.  The rest of Studebaker was purchased by Wagner Electric, and was merged with the Worthington Corporation into Studebaker-Worthington, which was eventually swallowed by McGraw-Edison. The proving ground, which changed hands twice following Studebaker’s withdrawal from the car market, is still active as the Navistar Proving Grounds, and 5000 trees, arranged to spell Studebaker when seen from above, still stand in South Bend, the last two remnants of a once innovative industry powerhouse.