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Life and Death Although, Studebaker ceased to produce cars in the 1960s we still can learn a lesson from its history.
In 1852 the five Studebaker brothers founded a blacksmith and wagon shop in South Bend, Indiana. The quality of their wagons and carriages made them one of the leading U.S. manufacturers by the 1890s. And the motor car was on the threshold to conquer the world! As early as 1929 an Austrian economist observed that 'new production functions do not typically grow out of an old business,' although, he added, 'if a new man takes hold of an old firm, they may.' He concluded that business 'innovations are always associated with the rise to leadership of new men.'
The new man
Frederick Fish, legal counsel to the corporation, pushed Studebaker into automobile production. However, the brothers strongly resisted. Their arguments: they had history on their side, they were the world's largest wagon manufacturing company. Many car manufacturers went bust after only a spell in business. From 1894 to 1899 350,000 carriages had been sold in New York City against 125 cars. Fortunately, visionary Frederick Fish prevailed and in 1902 he got the board to agree to hire an engineer to head a new automobile department. Production remained limited at first, but Studebaker finally, after much hesitation, had committed itself to the new industry. Studebaker continued to produce wagons, even though it stopped producing carriages in 1910. In the next decade the wagon industry experienced increasing consolidation caused by pressure from the automobile industry. The rise of the car industry wreaked havoc in the horse drawn pleasure vehicle trade.
The electronic and information age
In the 1970s and 1980s quite a number of companies missed the electronic or information age. For instance two Zurich-based manufacturers of calculators, Madas and Precisa. Some business leaders who made a mark on 'their' corporation: Ken Olson/DEC Steve Jobs/Apple Larry Ellis/Oracle Percy Barnevik/ABB Lee Iacocca/Chrysler Jürgen Schrempp/DaimlerChrysler Pictures, top: Cover of Critchlow's book about Studebaker, bottom: a Studebaker Champion at the U.S. car meeting Mollis 2005. Homework
1) Make sure you really do understand the above text. Write a summary in German.
2) What happened to Gretag, Studer Revox, Integra Signum, Swiss watch industry, Atari, Commodore, Compaq, DEC? 3) What can be done to avoid the fate of these companies? 4) Collect information about the above mentioned business leaders. What are their merits? 5) Do you know some more remarkable business leaders? 6) During the American Civil War one of the pious Studebaker brothers quit the factory because they supplied wagons to the Army. What's your opinion on this controversy? Business or faith? Discuss it in your group and write down the arguments. 7) You may want to read 'Kilometer Null' by Hans-Peter Bärtschi. Order it for free from Vontobel-Stiftung, Schriftenreihe, Postfach, CH-8022 Zürich | ||||||||
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