The Lark provides a serious lesson for the chemical industry

March 10, 2005
The key to the long-term vitality of a chemical corporation does not lie in its business acumen, but in its ability to continue to make innovative chemicals. Editor in chief Mark Rosenzweig says executives should show more enthusiasm for this process.

The compact Lark, introduced in the 1959 model year, had dramatically boosted the sales of Studebaker Corp., the venerable South Bend, Ind., automaker, and put it in the black for the first time in years. However, once the Big Three launched their own small cars, sales of the Lark sagged.

In my mind, the Lark was a better car than its rivals. I speak from experience: My family had a 1960 Lark Regal four-door sedan (which was a source of contention, not because of its qualities, but because some of us wanted Studebaker’s sporty Hawk coupe). However, the much larger marketing muscle and dealer networks of Chevrolet, Ford and Plymouth counted for more in the marketplace. Plus, the Rambler, a pioneer in the compact car niche, remained a strong rival.

With other divisions of the corporation profitable, many on Wall Street thought Studebaker should close its automaking operations, even though the company got its start in 1852 making vehicles — horse-drawn wagons.

In stepped Sherwood Egbert as president of Studebaker. He was an outsider to the South Bend firm and to the auto industry. However, he brought enthusiasm and a genuine desire to keep making cars.

Studebaker restyled the Lark and Hawk as much as it could on a shoestring budget. Made into a hardtop and renamed Gran Turismo, the Hawk received widespread praise for its new look. Egbert also rushed to launch a dramatic all-new sports car to update Studebaker’s image and drive traffic to the showroom. The result was the breathtaking 1963 Avanti coupe, which still turns heads today.

Unfortunately, medical problems forced Egbert to step down as president in November 1963. Without a strong champion arguing the case for continued carmaking, the company’s board soon decided to close the antiquated South Bend complex. Studebaker continued to produce cars in limited numbers from its smaller, but more modern, plant in Hamilton, Ontario, for a couple of years — some say more to avoid lawsuits from dealers than because of any commitment to the automotive business.

Today, too many firms in our industry suffer from management that doesn’t show any enthusiasm for making chemicals. Some executives probably consider process technology and production to be necessary evils. If assets could be magically transformed, these honchos might take their companies out of the chemical business altogether. That explains why technical competencies and manufacturing too often don’t get adequate attention and funding.
The reason for this change in management attitude is all too apparent. Technologists no longer are in charge. Where not too long ago chemical engineering departments at colleges could proudly point to alumni who were leading major chemical firms, today business departments hold the bragging rights.

Sure, to succeed our companies need top-flight financial people. That’s what the CFO position is for. Unfortunately, boards and stockholders don’t seem to realize that top executives who understand and can champion chemical technology and production are crucial for the long-term vitality of any firm that intends to remain in the chemical market. Getting that message across won’t be a lark, but it is essential for our future.

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