February 17, 2009

CAR LUST: The Kaiser Henry J. Not quite as cool-looking as the Hudson Jet, but like the Jet it killed its maker. And there’s a modern-sounding twist:

In 1949 he secured a $44 million loan from the Reconstruction Finance Corporation, a government agency, on the condition that some of the loan funds would go to the development costs of a new small car. The loan agreement required that the car be introduced in the fall of 1950, that it should have room for six adult passengers, and that it sell for no more than $1,300. . . . In Hudson’s case, it brought the well-appointed, superbly engineered Jet to market at too high a price point and lost sales as a result. Kaiser couldn’t overshoot the price point or it would cause a default on the government loan, so it came at the problem from the other direction–it de-contented the car to keep the price down. The plan was to introduce the base model first, and then roll out the upscale trim levels later.

Instead, Kaiser went broke because nobody bought it. Now we’ve got efforts to do the same thing: Government loans and “guidance” to the car companies on what they should be selling. Everything old is new again! Wonder how it’ll work out this time? But check out the pics — it could have been a nice-looking car.

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