Interesting Textbook Case Study on Hudson

akcoop

I came across a textbook case study that was evaluating the Hudson Motor Company. It was under a section on quality. I copied the portion on Hudson out and put it on a simple web page here:



http://209.234.75.36/share/casestudy/hudsoncasestudy.htm



If you would like to read some of the other case studys here is the whole publication:



http://courseweb.stthomas.edu/fmzimmerman/books/T2TURNbaz17.pdf



There are case studies on Ford, Buick, American Motors, Nash, Cadillac, Kaizer-Fraser, etc..

Unknown

Now that was a good read. Thanks for posting that. Maybe the CEO's of GM and Ford should pick up a copy.



Just as I always suspected, the Jet was a major factor in Hudson's demise.

Geoff

An interesting read, but there are some VERY arguable points therein, particularly on the technical side, which I could take apart! As far as the Jet goes, it wasn't the car's fault, as such. There is nothing inherently inferior about the construction or design of the Jet, it was just that they didn't do their market research - it was too early for a compact, too late for another side-valve six, and it was too high priced, as it was too well-built! And it had an "unfortunate" appearance from certain angles.

Geoff.

Aaron D. IL

Yes and I would definately argue what he says about Hudson quality. In most decades they were better than most all of the competition in their price class and even competitive with more expensive cars. Out of cars of the early '50's they'll do battle with modern traffic better than most every other make. If Hudson ever produced a product of poor quality it was the 1st series Essex super 6's. but overall an interesting and thought-provoking article. Does anyone else agree that until Chapin re-assumed control of the company the Exec's were absentee landlords most of the time???? How about thoughts on micro-manging the company's affairs in the '50's ?

SamJ

Two significant issues are not mentioned in this case study. Firstly, after the war the "big three," but particularily Ford and GM, had an all-out war to develop their national dealer networks, offering all kinds of incentives for dealers to change horses and expand. Hudson had a very spotty dealer network, with some successful big dealers, but lots of small-town "garage" dealers who only sold a couple of cars per year. Some areas of the country had no Hudson penetration at all. Naturally, if you were a strong dealer, there was huge incentive to cross over if you could sell say, 300 Chevrolets per year vs. maybe 25-50 Hudsons.



Secondly, advertising became national, expensive, and now included television. The cost of advertising had to be amortized over the total fleet sale...pennies per car for Ford and Chevy, hundreds per car for Hudson, Nash, Packard and Studebaker, if they were to stay competetive. You see this now with GM and Ford complaining about amortizing the cost of worker heath care over their production...they claim $150+ per vehicle more than Toyota and Honda. The big three sold over 2,000,000 light trucks and SUV's in 2006. That's about a $300 million difference in this category alone. In the early '50's, Hudson was facing the same amortization issues with advertising, product development, factory improvement, etc....smaller dollar amounts than today, but on a much larger percentage of cash flow scale. :cool:

Unknown

And how many auto makers went under during the Hudson years ? Many did so I figure Hudson must have been doing something right. Look at Tucker and what he BIG auto makers like GM did to stop that ? Must have been a constant fight to keep selling even just a few cars with all the competion. How many auto makers say from 1910 thru the 1930s or 40s that are no longer with us ?

Unknown

So far, everyone has made a valid point. We all know that Hudson was and is a fine automobile. So, it seems that fault lies with Hudson management's inability to properly respond to the market and changes within the industry at the time. As far as the author's perceptions about quality, we know better.

[Deleted User]

Dave53-7C wrote:

Just as I always suspected, the Jet was a major factor in Hudson's demise.

Yes, we all know you always suspected that...

[Deleted User]

I haven't read the entire paper, but I did read the Hudson - AMC stuff and the bibliography because I wanted to know where he got his information. He didn't put much 'real' research into this book. Most of the Hudson information was gleaned from Langworth, Arch Brown, Automobile Quarterly.... you know - Picture Books. No interviews of former executives or workers.

As harsh as the author was with Chapin Jr's role at AMC, he fails to mention that without Chapin's purchase of Kaiser Jeep, AMC would have failed long before Chrysler's buy out of AMC in 1987. For that matter, what position would Chysler be in today without their profitable Jeep division?

[Deleted User]

All I can say is, with gross profit percentages that low, there was no way they would ever last. No wonder they went under! Seems like the amount of sales was the only thing holding their head above water, and when that was declining, there were no profits to be had. Musta had some real lousy accountants! Or people who thought they knew better than the accountants (more likely! lol)!

53jetman

The real problem was Mr. A. Edward Barrett - he ruled with an iron hand during the 1936 thru 54 period, and hardly ever had the correct perception of what the real problems were - he was a stenographer. What else can I say!



Jerry

53jetman

Unknown

53jetman wrote:

The real problem was Mr. A. Edward Barrett - he ruled with an iron hand during the 1936 thru 54 period, and hardly ever had the correct perception of what the real problems were - he was a stenographer. What else can I say!



Jerry

53jetman

Well, everyone has to start somewhere. Since the Hudson Motorcar Company wasn't a monarchy, he wasn't born into the role of president.

Unknown

royer wrote:

Yes, we all know you always suspected that...

I'm so glad that you all know that.

[Deleted User]

Hudson could have done everything right in the 51-54 timeframe they could have released a V8 put more chrome on the cars and sold them cheaper but it would have just staved off the inevitable for a few more years. The big three were playing for keeps. When Ford and GM began the price wars in the 52-late 53 time frame the world of independent manufacturers changed forever. I have the complete set of merger docs between Nash and Hudson. In them Hudson states that labor strife and the continuing material shortages really hurt their bottom line. The lack of an expanding dealer network and the lack of financial clout to offer purchase programs that competed with the big 3 killed Hudson.

Yes AE Barit was an idiot he ran the company like a bean counter the fact he was easy to bamboozle allowed the Stepdown to be produced he wanted a more normal looking car. The Jet if produced as conceived by the design staff would have been a nice car. While Frank Spring was in Italy spec'ing the body styling for the Italia Barit, the body engineers and a Hudson dealer(who's name escapes me now. He was the biggest produced those awful cars with fins) changed the design to look more like a Ford. Barit believed a man should wear a hat driving. This type of idiot should be kept as far away from the design studio as possible.

In the end the writing was on the wall the big three stamped out the competition....sigh

[Deleted User]

51hornetA wrote:

Yes AE Barit was an idiot he ran the company like a bean counter the fact he was easy to bamboozle allowed the Stepdown to be produced he wanted a more normal looking car.

He must have been the stupidest bean counter alive! Any accountant with any degree of sense could have told them long before that they had to cut costs and improve manufacturing efficiency. You don't run gross profit numbers like that and expect to last long. Revenues may tell you where you stand in relation to other car makers, but "gross profit" tells you how long you will last. I wouldn't blame the bean counters unless they hid the numbers, which I doubt, and ultimately its a failure of the Board of Directors.

Jay "a bean-counter"