Henry Studebaker was a farmer, blacksmith, and wagon-maker who lived near Gettysburg, Pennsylvania in the early 19th century. His blacksmith trade was a family occupation passed down since the days of living in the famous blade-making town of Solingen in Germany. His forebear Peter Studebecker had migrated with three brothers from Holland to Philadelphia, America in 1736 and settled in Pennsylvania. Henry's father John Studebaker had moved to Ohio in 1835 and taught his five sons to make wagons. They all went into that business as it grew to gigantic proportions with the country.
Clement and Henry Studebaker Jr. became blacksmiths and foundrymen in South Bend, Indiana in February 1852. They first made metal parts for freight wagons and later expanded into the manufacture of complete wagons. John M made wheelbarrows in Placerville, California. The site of his business is California Historic Landmark #142.
The first major expansion in Henry and Clem's South Bend business came from their being in the right place to meet the needs of the California Gold Rush which began in 1849. From his wheelbarrow enterprise at Placerville, John M had amassed $8,000. In April 1858, he quit and moved out to apply this to financing the vehicle manufacturing of H & C Studebaker which was already booming because of a big order to build wagons for the US Army. In 1857, they had also built their first carriage—"Fancy, hand-worked iron trim, the kind of courting buggy any boy and girl would be proud to be seen in". John M bought out Henry's share of the business. Henry was deeply religious and may have had qualms about building military equipment. The Studebakers were Dunkards, a religion that viewed war as evil. Longstreet's official company history simply says "Henry was tired of the business. He wanted to farm. The risks of expanding were not for him". Expansion continued from manufacture of wagons for westward migration as well as for farming and general transportation. During the height of westward migration and wagon train pioneering, half of the wagons used were Studebakers. They made about a quarter of them, and manufactured the metal fittings for other builders in Missouri for another quarter century.
The fourth brother, Peter E, was running a successful general store at Goshen which was expanded to include a wagon distribution outlet. A major leap forward came from supplying wagons for the Union Army in the Civil War (1861-65). By 1868, annual sales had reached $350,000. That year, the three older brothers formed the Studebaker Brothers Manufacturing Company—Clem (president), Peter (secretary) and John M (treasurer). By this time the factory had a spur line to the Lake Shore railroad and, with the Union Pacific Railroad finished, most wagons were now despatched by rail and steamship.
In 1875, the youngest brother, 30-year-old Jacob, was brought into the company to take charge of the carriage factory, making sulkies and five-glass landaus. Following a great fire in 1874 which destroyed two-thirds of the entire works, they had rebuilt in solid brick, covering 20 acres and were now "The largest vehicle house in the world". The best people were buying Studebaker sulkies, broughams, clarences, phaetons, runabouts, victorias and tandems. The wealthiest could buy for $20,000 a four-in-hand smart enough to carry a dozen swells in style, with red wheels, gold-plated lamps, yellow trim; and the driver cracked a 15-ft braided whip over the fashionably cropped tails of four or even six matched horses.
In the 1880s, roads started to be surfaced in tar, gravel and wooden blocks. In 1884, when times were hard, Jacob opened a carriage sales and service operation in a fine new Studebaker Building on Michigan Boulevard, Chicago. The two granite columns at the main entrance, 3 feet 8 inches in diameter and 12 feet 10 inches high, were said to be the largest polished monolithic shafts in the country. Three years later in 1887, Joseph died—the first death among the brothers.
In 1889, incoming President Harrison ordered a full set of Studebaker carriages and harnesses for the White House. As the twentieth century approached, the South Bend plant "covered nearly 100 acres with 20 big boilers, 16 dynamos, 16 large stationery engines, 1000 pulleys, 600 wood- and iron-working machines, 7 miles of belting, dozens of steam pumps and 500 arc and incandescent lamps making white light over all". The worldwide economic depression of 1893 caused a dramatic pause in sales and the plant closed down for five weeks, but industrial relations were good and the organised workforce declared faith in their employer.
In 1895, John M's son-in-law Fred Fish urged for development of 'a practical horseless carriage'. When, on Peter's death, he became chairman of the executive committee in 1897, the firm had an engineer working on a motor vehicle. At first, Studebaker opted for electric (battery-powered) over gasoline propulsion. (See main article Studebaker Electric (automobile).) But in those days there was no future for a slow car dependent on heavy, primitive batteries. While it attempted to manufacture its own electric vehicles from 1902 to 1911, the company entered into body-manufacturing and distribution agreements with two makers of gasoline powered vehicles, Garford of Elyria, Ohio, and the Everett-Metzger-Flanders (E-M-F) Company of Detroit. Beginning in 1904, Studebaker began making gasoline-engined cars.
Under the agreement with Studebaker, Garford would receive completed chassis and drivetrains from Ohio and then mate them with Studebaker-built bodies, which were sold under the Studebaker-Garford brand name at premium prices. Eventually, vehicles with Garford-built engines began to carry the Studebaker name. Garford also built cars under its own name and, by 1907, attempted to increase production at the expense of Studebaker. Once the Studebakers discovered this, John Mohler Studebaker enforced a primacy clause, forcing Garford back on to the scheduled production quotas. The decision to drop the Garford was made and the final product rolled off the assembly line by 1911, leaving Garford alone until it was acquired by John North Willys in 1913.
Studebaker's marketing agreement with the E-M-F Company was a different relationship, one John Studebaker had hoped would give Studebaker a quality product without the entanglements found in the Garford relationship, but this was not to be.
The E-M-F gasoline-powered cars proved disastrously unreliable, causing wags to say that E-M-F stood for Every Morning Fix-it, Easy Mark's Favorite and the like.. Compounding the problems was the infighting between E-M-F's principal partners, Everett, Flanders and Metzger. Eventually, two partners left, leaving the bombastic Metzger to run the operation. After taking over E-M-F's facilities, to remedy the customer dissatisfaction, Studebaker paid mechanics to visit each disgruntled owner and replace defective parts in their vehicles at a total cost of US$1 million. The worst problem was rear-axle failure. Hendry comments that the frenzied testing resulted in Studebaker's aim to design 'for life'—and the consequent emergence of "a series of really rugged cars. . . the famous Big and Special Sixes".. From that time, Studebaker's own marque was put on new automobiles produced at the former E-M-F facilities as an assurance that the vehicles were well built.
John M Studebaker had always viewed the automobile as complementary to the horse-drawn wagon, pointing out that the expense of maintaining a car might be beyond the resources of a small farmer. As a result, the manufacture of horse-drawn vehicles was not wholly ceased until Erskine ordered removal of the last wagon gear in 1919. To the cars, Studebaker added a truck line, which later replaced the horse-drawn wagons. Buses, fire engines and even small rail locomotives were produced using the same powerful six-cylinder engines.
In 1925, the corporation's most successful distributor and dealer Paul G Hoffman came to South Bend as vice-president in charge of sales. In 1926, Studebaker became the first automobile manufacturer in the United States to open a controlled outdoor proving ground on which, in 1937, would be planted 5,000 pine trees in a pattern that spelled "STUDEBAKER" when viewed from the air, Also in 1926, the last of the Detroit plant was moved to South Bend under the control of Harold S Vance, vice-president in charge of production and engineering. That year, a new small car, the Erskine Six was launched in Paris, resulting in 26,000 sales abroad and many more in America. By 1929, the sales list had been expanded to 50 models and business was so good that 90 per cent of earnings were being paid out as dividends to shareholders in a highly competitive environment. However, the end of that year ushered in the great depression which saw many layoffs and massive national unemployment for several years. From the 1920s to the 1960s, the South Bend company originated many style and engineering milestones, including the Light Four, Light Six, Special Six, Big Six models, the record-breaking Commander and President, followed by the 1939 Champion. During World War II, Studebaker produced the Studebaker US6 truck in great quantity and the unique M29 Weasel cargo and personnel carrier. After cessation of hostilities, Studebaker returned to building automobiles that appealed to average Americans.
Ballooning labor costs (the company had never had an official United Auto Workers (UAW) strike and Studebaker workers and retirees were among the highest paid in the industry), quality control issues, and the new car sales war between Ford and General Motors in the early 1950s wreaked havoc on Studebaker's balance sheet. Professional financial managers stressed short-term earnings rather than long-term vision. There was enough momentum to keep going for another ten years, but stiff competition and price-cutting by the Big Three doomed the enterprise. There was also a labor strike at the South Bend plant in 1962.
With an abundance of tax credits in hand from years of financial losses, at the insistence of the company's banks and some members of the board of directors, Studebaker-Packard began diversifying away from automobiles in the late 1950s. While this was good for the corporate bottom line, it virtually guaranteed there would be little spending on Studebaker's automobiles.
The automobiles that came after the diversification process began, including the ingeniously-designed compact Lark (1959) and even the Avanti sports car (1963), were based on old chassis and engine designs. The Lark, in particular, was based on existing parts to the degree that it even utilized the central body section of the company's 1953-58 cars, but was a clever enough design to be quite popular in its first year, selling over 150,000 units and delivering an unexpected $28 million profit to the automaker.
The last car off the line was a turquoise Lark cruiser on March 16, 1966. Studebaker announced the shutdown of its last car factory on March 4. It was terrible news for the 700 workers who had formed a true family at the company, known for its employee parties and day trips. It was a huge blow to the city, too. Studebaker was Hamilton's tenth largest employer at the time.
Automotive production was consolidated at the company's last remaining production facility in Hamilton, Ontario, Canada, where Studebaker produced cars until March, 1966 under the leadership of Gordon Grundy. Grundy tried very hard to turn a profit on his operation, and he succeeded to some degree. However, the company's directors felt that the small profits were not enough to justify continued investment. After rejecting Grundy's request for funds to tool up for 1967 models, Studebaker left the automobile business on March 16, 1966 after a turquoise and white Cruiser sedan rolled out the door. In reality, the move to Canada was a method by which production could be slowly wound down and remaining dealer franchise obligations honored.
Many of Studebaker's dealers either closed, took on other automakers' product lines, or converted to Mercedes-Benz dealerships following the closure of the Canadian plant.
Studebaker's proving grounds were acquired by its former supplier, Bendix Corporation, which later donated the grounds for use as a park to the St. Joseph County, Indiana, parks department. As a condition of the donation, the new park was named Bendix Woods. The grove of 5,000 trees planted in 1937 that spelled out the Studebaker company name still stands and has proven to be a popular topic on such satellite photography sites as Google Earth Today, the former proving ground is owned by Robert Bosch GmbH and it continues to be active some 80 years after it was built. Its General Products Division, which handled defense contracts, was acquired by Kaiser Industries and continues to this day as AM General.
After 1966, Studebaker continued to exist as a closed investment group, with income derived from its numerous diversified units including STP, Gravely Tractor, Onan Electric Generators, and Clarke Floor Machine. Studebaker was acquired by Wagner Electric in 1967. Subsequently, Studebaker was then merged with the Worthington Corporation to form Studebaker-Worthington. The Studebaker name disappeared from the American business scene in 1979, when McGraw-Edison acquired Studebaker-Worthington. McGraw-Edison was itself purchased in 1985 by Cooper Industries, which sold off its auto-parts divisions to Federal-Mogul some years later.