On This Day, March 18, 1933, the American automotive company Studebaker Corporation filed for bankruptcy protection amidst the economic calamity of the Great Depression. The once iconic and innovative carmaker had fallen victim to plunging sales and unsustainable debt.
Founded in 1852, Studebaker was one of the earliest manufacturers of automobiles and wagons in the United States. It pioneered many firsts in the automotive industry, from the first electrics to the first gasoline-powered cars built in a factory setting.
However, Studebaker struggled to keep pace with the Big Three automakers – Ford, General Motors and Chrysler – during the 1920s. When the Great Depression struck, consumer demand for new vehicles plummeted, forcing Studebaker into receivership.
The company’s manufacturing plants shut down temporarily, resulting in over 7,000 layoffs. After restructuring under the bankruptcy court’s supervision, Studebaker re-emerged in 1935 as the Studebaker Corporation of America and returned to producing cars.
For a few more decades, Studebaker managed to carve out a niche in the medium-priced vehicle segment by banking on its reputation for quality engineering and styling. But it could never regain the prominence it once held in America’s auto industry heyday.
Studebaker’s 1933 bankruptcy marked the beginning of its long decline on the road to eventually ceasing all production of automobiles in 1966. However, its pioneering role is forever etched in the early history of American automobile manufacturing.
