In August 1963, Studebaker found itself in great financial trouble. It was at the end of the company’s cash reserves, and the bankers, who actually ran Studebaker, were threatening to shut down auto production. Additionally, a factory renovation, including the engine foundry, was badly needed, but there was no money for such a venture.
The South Bend, Indiana company that had been in business since 1852 (They began by building Conestoga wagons!), had to pull a ‘rabbit out of a hat’ so to speak. As a last gasp, the company had invested millions and unveiled a new model in 1962, the stunning and radical looking Avanti, and offered the same supercharged running gear in its Larks and Hawk models to boost sales.
As a novel P.R. ‘gimmick,’ two pre-production models were loaded into a C-82 cargo plane and flown to 20 cities around the country to show off to dealers and the press. Enter Andy Granatelli, the Santa Monica (Calif.) based speed merchant who up to this time had built and sponsored cars in the Indy 500 and USAC, and had been very successful at both.
Andy had a good working relationship with Studebaker. He was involved with engine development for Studebaker, including the Paxton Superchargers, which were introduced on the supercharged Avanti models R-2 and R-3. These engines had a displacement of only 289 cubic inches!
Image Courtesy of Studebaker National Museum.
So Andy, brothers Joe and Vince, woman drivers Paula Murphy and Barbara Nieland, a crew of 20 mechanics and a dozen Studebakers of all models descended upon the famous and infamous salt lake in Bonneville, Utah.
“We set over 360 production car records in a range of new models,” said Paula Murphy. “Andy asked me if I wanted to go faster and go for a land speed record. I said ‘sure’, so they put me in a Studebaker Hawk and I went 154 mph for the flying mile,” said Paula in an interview at the time. “Then he put me in the Avanti and I went 161 mph. That was quite a thrill. Bonneville was great.”
Andy described it as: “Imagine holding a car wide open in first gear for fifty miles? Well this would be easy compared to what the Avanti had to do for 29 records!” On a Wednesday afternoon, as the sun was setting, the brothers wheeled out Paula’s old reliable Avanti for a practice session. Andy failed to get enough traction for a decent lap time on the circular 10-mile course. Then Vince spun out in a soft spot. Finally the oldest brother, Joe, went out and held it in the groove and kept on running and ended up breaking ten records that had been previously held by Mickey Thompson. Thompson had gone 155 mph in a Pontiac Catalina.
After Paula had set her women’s record in the Avanti, Andy drove an R-3 Supercharged Avanti for a Class C record of 170.8 mph for a bunch of records from 1 kilometer to 10 miles. For the next month, the automotive press talked about little else than the Stude records. But it was all for nothing, as in November the bankers declared that only existing car orders would be fulfilled, and that all future production would be done at a small plant in Canada. Avanti, Hawk and truck models would be discontinued.
Of course, the South Bend community was beyond shock. About half of the workers in town worked for either Studebaker or one of its suppliers, and no one thought it would ever go out of business.
Postmortem: Two years later, the Avanti went back into production on a small scale (in the original factory building) with a Corvette motor in the car. It was hand-built (as were the Studebaker Avantis) and could be ordered in any color with any kind of interior. Avanti Cars continued production, under various owners, until 2005.
Most laid-off employees only got a pittance as a retirement check; the pension fund was all but broke. It was this because of this incident that new laws were enacted by the Federal Government to protect employees and workers’ pension funds.