Beginnings - The Studebaker Years The Avanti II - Newman and Altman The Blake Era The Kelly Years The Cafaro Avanti

The Studebaker Avanti The Avanti was originally produced by Studebaker in South bend, Indiana. Although they were not a huge company by Detroit standards, Studebaker had long been in the transportation business. They even built some of the original Conestoga covered wagons used to settle the West. The concept for the '63 Studebaker Avanti was conceived by Sherwood Egbert, the president of Studebaker, who took over the company in February of 1961. He felt that an exiting and daring line of cars would help Studebaker's struggling automotive division. What the dynamic Studebaker president wanted was a sports car or powerful 'Grand touring car that was futuristic'. Something to really catch the public's attention. He hired a famous industrial designer of the day, Raymond Loewy, who assembled a styling team in his Palm Springs home. In a week they had finished a 1/8 scale clay model. In April of '61 a full sized clay model had been completed, taking only 5 weeks. The mock up featured a smooth grille-less nose, contoured hood, fenders that flowed back to a Coke bottle shaped body, and ended in a fastback truncated rear. It speaks of cars that only now are showing the same styling themes, taking their cue from aerodynamic knowledge unknown in the early sixties. Contoured leather bucket seats, big round dials sitting in a hooded instrument panel, a leather padded roll bar, all speak of sporting elegance in the Avanti interior. The sleek body was made of fiberglass.

The Avanti V-8 produced 240 horsepower from its 289 cubic inches. This was the normal R-l engine. For a few dollars more the R-2 option could be had with a Paxton supercharger on the V-8 putting the Avanti in the same performance league as fuel injected Corvettes and the sleek Jaguar XKE sports cars. The hotter Avanti R-3 used the same engine block bored out to 304.5 cubic inches. Still hotter was the R-4 with dual superchargers. Avanti stock cars broke records at Bonneville both In '62 and '63. The Avanti enhanced it's sporting image with a set of throaty dual exhausts and the natural "rake" it had when viewed from the side, sitting nose down and tail high. The sleek body set on a solid separate frame. It was the first American four passenger car to have front disc brakes as standard equipment so it could stop as well as it could go. The doors featured "cone" locks and the fuel tank was tucked up between the back seat and trunk wall. A lot of original thinking went into the Avanti making it a unique and beautiful American car. Initial response to the Avanti was strong and preproduction orders poured in. The Avanti established numerous speed records and won the praise of the automotive community. But, while Studebaker as a company prospered, the automotive division was doing poorly. Avanti sales were hindered by production problems and orders were canceled by impatient buyers. Studebaker decided to end the production of automobiles in the United States in 1964.(Back to History Menu)

 

At the same time Altman was negotiating with Studebaker executives for the rights, parts and tooling. Eventually, Studebaker and Altman came to terms and Avanti Motor Corporation was organized with initial capital provided by Altman, Newman, their attorney, Altman's brother Arnold, and various other family and friends. All rights and equipment needed to manufacture the Avanti were bought on July 1, 1964, along with parts and equipment for Studebaker trucks. The rights reportedly cost Altman $25,000 plus the cost of an additional inventory of truck parts intended to provide the company with income while car production becam profitable.

The first Avanti II was built on July 22, 1965, and formally introduced to the public in South Bend on August 2nd.

"The new Avanti II will differ completely from any other American-built car in its method of production, and its standard equipment pricing philosophy... The new Avanti brings to the American public an American high performance, four-passenger prestige motor car with great maneuverability and exceptional quality that only hand-building can produce, and that, because of its limited production and $7,000 plus price tag, Is certainly a high prestige, very unique automobile to compete favorably with European built Ferraris, Rolls-Royces and Maseratis. We do not plan, under any circumstances, any move into mass production. This will continue to be an unusual car for an unusually discriminating buyer."

Suppliers were a real problem during the first few months. Hours were spent on the phone trying to convince suppliers that the Avanti II was a real car that was really going to make it to production. Slowly the doubts faded due to Altman's prompt payment policy on bills. Suppliers who thought they were dealing with potential deadbeats were pleasantly surprised to discover that Avanti Motor Corporation was one of the faster "pays" in the industry.

From the moment he signed on, Hardig had been hard at work on the car itself. It was obvious from the start that alterations in the original Avanti would be required before the Avanti II could reach production. The major problem was with the engine. Since the supply of Studebaker engines was not assured, a substitute would have to be found that would provide the necessary level of performance, and yet be easily adapted to the existing body. Hardig's choice was the 327 cubic inch engine used in the Chevrolet Corvette. The first of four engineering prototypes, serial number one, was fitted with a 327 block obtained from a Chicago salvage yard. The Chevy engine was considerably lighter than the Studebaker it replaced. It was also slightly taller. To make this engine fit, it was necessary to raise the front fender line of the Avanti II about two inches. This gave the Avanti II a distinctly different stance, eliminating the aggressive rake of the Studebaker Avanti. Although now positioned as a luxury performer rather than a strict sports car, the level of performance was still roughly equivalent to the optional R2 Studebaker power plant, and considerably faster than the standard R1. In addition, the lighter Chevy block led to better weight distribution, and this had a favorable effect on handling. Hardig managed to develop an Avanti II that was quieter, faster, and better mannered than the standard Studebaker Avanti.

Inside, the Avanti II defied Detroit tradition. Since this was a custom-built car, Altman reasoned, why put an artificial limit on the upholstery and carpet selections available! The Avanti II was available in literally any combination of fabrics the customer cared to bring in. For those customers who did not wish to supply their own, the factory had some 400 selections on hand. The range of exterior finishes was equally expansive. An Avanti II could be painted in any color obtainable from the paint manufacturers. All this was possible because of the unique type of assembly method Altman and Hardig instituted. Instead of attempting to build thousands of Avanti IIs each year for the mass market, carefully hand-build a few hundred--if that--and sell them to those car buyers who wanted something unusual and were prepared to pay for it. The price would be set at whatever level was necessary to ensure profitability. To anyone familiar with a typical automobile assembly line, the unique way Avanti Ils were produced in South Bend was amazing. Each car proceeded slowly from station to station only as each specific step was satisfactorily completed. There was no conveyor belt. Unfinished bodies were mounted on dollies, which were then pushed by hand from one station to the next. Workers labored in a relaxed atmosphere utterly unknown in Detroit. On a moving assembly line, if a worker had fifteen seconds to install a bolt and it didn't get done in that time, then it just didn't get done at all. Each operation on a moving assembly line must be completed in strict sequence, and in a severely limited amount of time. During the 60's, "Monday" and "Friday" cars were notorious within the industry because those were the days of highest absenteeism and, consequently, of chronically sloppy assembly. On the Avanti II assembly line, by contrast, the goal was to get the job done properly, not simply to get the job done as well as practical in the time allotted. Each Avanti II worker was expected to take whatever time was required to do each task the way it was supposed to be done. A particular task might take 20 minutes, or it might take two hours. The time spent was not the immediate concern. Of course, a high degree of proficiency was demanded, and workers who failed to measure up were asked to look for employment elsewhere. The pace of life in South Bend was considerably more humane than that to be found in the typical Detroit factory, and Avanti II workers seemed to take unusual pride in their work. This pride was reflected in the high level of assembly and finish that came to be one of the biggest selling points of the Avanti II. In contrast Avanti Motor Corporation did not pay particularly well by Detroit standards.

Our ideas regarding quality have undergone a cultural shift since the 1960s. What would have been deemed acceptable back then, would put a manufacturer out of business today. By the standards of the time, the Avanti II was a high-quality automobile. It was the quality of materials, fit, and finish that made the Avanti II most different from its ancestor. The Studebaker Avanti was plagued with quality control problems throughout its brief life. Some of them were relatively minor, such as the chronic weather-stripping inadequacies. Some of them were more serious and more basic to the design. A good example of the latter is that of the early rear windows. They sometimes blew off at high speeds.

Avanti Motors experimented with a number of ways of marketing the Avanti II. They tried dealers, but most were not motivated as the Avanti was just a sideline for them. They tried a "sales affiliate" program which allowed avanti owners to act as agents for commision. But Avanti found that most customers prefered to buy diect from the factory. They wanted to visit and talk out the details through numerous phone calls. Eventually, most dealers disappeared. By the 1970s, Avanti Motor Corporation was perhaps the only significant auto maker in the world with virtually no dealers, and very little in the way of active marketing--and still sold all the cars it could produce. Avanti Motor Corporation did do well for itself. It operated in the black every year of its existence, a feat that, in future years, would come to seem like little short of a miracle

In April, 1976, Nate Altman fell ill with a severe attack of the flu that developed into pneumonia. On April 19th, he died. Nate's brother Arnold, who had been an active participant in the company from the beginning, quickly assumed the reigns. Leo Newman was still intimately involved in company affairs, as was Gene Hardig.

More challenges were on the horizon. Hardig, was past his prime, and had become a virtual recluse. Newman was getting older, too, and died on March 20, 1980. Arnold Altman, a shy man who never possessed the vision or drive of his brother, was increasingly isolated at the helm. Under Arnold Altman, the company seemed to drift. The factory had no plans for a replacement model, or even for significant alterations in the current one. The policy of continual refinement, year after year, became one of doing the same things they had always done, giving the model only such changes as might be absolutely required in order to maintain its Government certifications and, therefore, its viability. Public acceptance continued to be good, and the seemingly ageless Loewy styling still looked astonishingly contemporary, but no company in the frenetically competitive automobile business can remain successful for long by coasting on past successes. By 1980, tired and under pressure from the Newman and Altman families to sell their holdings, Arnold Altman began listening with increasing interest to the ideas of an Avanti enthusiast named Steve Blake.

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The Blake Era

Avanti Motor Corporation was sold to Stephen H. "Steve" Blake on October, 20, 1982. Blake was a real estate developer and self-proclaimed "car nut". He became an Avanti enthusiast one day when his Maserati would not start. That incident led him on a search for something gorgeous that does not break. What he found was the Avanti II. Upon purchase of the company, Blake set about to change almost everything. The most obvious change was to the Avanti's appearance. The body was reworked with integrated resin bumpers. He also changed the way employees were managed, he engineered a race car, an anniversary edition, and a convertible. His whirlwind appearance in South Bend generated much enthusiasm in the press and auto community resulting in 1983 being the highest volume year ever. (289) But all was not well... Blake's impulsive management style, quick changes, and bad luck caused problems. The 1983 Avantis were panned by the press as having poor fit and finish and generally low production quality. The biggest blow was Blake's failure to test a new paint used on 1984 models. The formulation was intended to provide a more durable show quality finish. Instead it was a nightmare. Angry customers were returning their cars with sheets of paint literally falling of the doors. Blake repainted 270 cars. Some of them several times. Sales dropped and suddenly Blake was unable to pay his taxes or creditors.

Blake attempted to reorganize the company under chapter 11. His attempts failed and the company was seized. An auction of the assets was scheduled for March 30th, 1986. (Back to History Menu)

The Kelly Years

Michael Kelly purchased the assets of and rights to the Avanti for $722,000. Immediately he was faced with the daunting challenge of modernizing the chassis, meeting government regulations, and establishing supplier relationships. GM would have nothing to do with him having been "burned" by Avanti in the past. His solution was to base the Avanti on the Monte Carlo from General Motors and purchase the cars whole from a local dealer. 1987 Avantis were literally rebodied Monte Carlos and El Caminos. In many ways, Kelly was reminiscent of Blake. He had big plans including the development of a four door sedan, an extended coupe (LSC), and a limousine. He also was plagued with financial problems and rumors of bad business dealings. In April of 1987, Kelly announced that Avanti production was moving to Youngstown, Ohio. Kelly proclaimed that this move was needed to facilitate added models and production volumes. Kelly also managed to secure large grants from the city of Youngstown and state of Ohio totaling close to $1,000,000. Another major investor was a real estate developer named John J. "J. J." Cafaro. The Kelly Avantis sold well, but were not well accepted by the press. The first LSC Avantis were panned as having poor craftsmanship and lousy performance. Cafaro and Kelly had differing ideas on the direction of Avanti. Cafaro wanted to pursue the luxury market while Kelly wanted to return to Avanti's performance roots. Cafaro won out in the end mostly because of his financial resources. In September of 1988, Kelly sold his share of Avanti to John J. Cafaro. (Back to History Menu)

The Cafaro Avanti

John J. "J. J." Cafaro, 37, purchased Kelly's 47.5% share of NAMC on September, 1, 1988, and promptly renamed the company the Avanti Automotive Corporation (AAC). Cafaro was the son of a real estate developer family in Youngstown. The Cafaros and the DeBartolos, between them (and, occasionally, in partnership), had been the prime force in shopping center development in that part of the country in the 1960s and 1970s. According to "Forbes," the family owned the seventh-largest real estate development company in the United States, worth half-a- billion dollars. Cafaro and his team were described in this fashion by "American Way" magazine: "Cafaro is a guy who, by his own admission, doesn't know a spark plug from a carburetor."

His wife, Janet, (Avanti's Chairwoman of the board) and 25-year-old Greg Lowry are the new Avanti design team. J. J. Cafaro was apparently using family money to fund his purchase of Avanti and his ambitious development plans for it. Cafaro sometimes claimed he had invested $10 million. At other times, the figure given was $15 million. Eventually, the quoted figure rose to $20 million, and, on at least one occasion, to $24 million. No one seemed to know how much the Cafaro family had really invested. Still, it was obvious that large amounts of money (by Avanti standards, at any rate) were being poured into the business. The reasons were perhaps not the obvious ones. To be sure, Cafaro was a car enthusiast, but he also professed to have larger goals in mind. Specifically, Youngstown had been devastated by the collapse of the American steel industry. Looking at the weakened local economy and the thousands of unemployed workers in the local labor pool, Cafaro was searching for some way to help:

"We looked at a steel shelving company. It fit in real well, but after you create the 100 or 200 jobs that build shelving, the ripple effect dies. I don't think that we could have brought in any other industry that would have brought the degree of attention to the community that Avanti has brought."
A central part of the Cafaro effort was to expand the Avanti dealer base. Gary Fielding, appointed vice-president for product and dealer development, increased the number of franchised outlets from 33 in 1988 to 45 by January, 1989. It was Fielding's announced intention to expand further to at least "100 damn good, solid dealers" by the early 1990s. At the same time, Fielding announced that the company would build 350 cars in 1989, 500 in 1990, and 1,000 by 1991. The existing models were the coupe ($37,982) and the convertible ($47,982), but the heart of this expansion strategy was to be a new four-door Luxury Touring Sedan (or, "LTS").

The product quality, at least, was improving. John White, the "Boston Globe" auto editor who had condemned the 1988 Special Edition so mercilessly, tested a 1989 model convertible in the spring. His opinion of the "new" Avanti had taken a 180-degree turn:

"The Avanti convertible is not flawless, but by comparison with the predecessors, Cafaro's car is pretty good. For openers, the body work is a quantum leap from what was BC--Before Cafaro. The paint work is very good, and the fit is also very good...For the money--about $51,700--you get a very distinctive car that turns heads, but with a common power train that any Chevy dealer can service. Avanti has survived long enough to go beyond contemporary; people don't know whether it's an old design, a new design--or what--anymore. And you get a car that's competent and competently built."

On August 12th, however, 170 of the total payroll of 200 employees were suddenly laid off. Two weeks later, the company was given a two-year reprieve by the National Highway Traffic Safety Administration (NHTSA) on coming Government safety standards. These involved wavers on passive restraints, i.e, air bags and/or motorized seat belts. The company pleaded "substantial economic hardship" and described its condition as "struggling." Yet, in late November, Cafaro was again waxing enthusiastic:

"I think the future of Avanti is so bright it's scary. We are sitting right now in Youngstown...with what can become the American alternative to Jaguar, Mercedes, and BMW."

As "Forbes" noted in a 1989 feature story, Cafaro made it "sound so easy one wonders why there aren't dozens of thriving specialty automakers." In the latter months of 1989, the company announced a comprehensive marketing and advertising strategy designed to produce solid growth for the brand in future years. The Avanti's projected national advertising campaign would be the first of such scale since the days of Studebaker, and would feature placements in upscale magazines such as "Town and Country," "Architectural Digest," and "Automobile." National advertising and promotional materials would feature Avantis at the Butler Museum in Youngstown, which the company modestly proclaimed as being "America's foremost American art museum." Cafaro also announced plans to sponsor the Fifth Annual Palm Springs Vintage Grand Prix in November.

The first four-door Luxury Touring Sedan was built in August, 1989. It used a simplified fiberglass casting process that was designed to reduce the labor content in the car. Involving a one-piece body mold, the company claimed that the man hours required to build an Avanti dropped from around 1,000 to 750. Actually, the sedan featured two processes that were new to the Avanti: carbon fiber composites and Kevlar. Carbon fiber composites were used for the roof, roof pillars, and door beams (which were formerly of steel). These composites also replaced the traditional Avanti roll bar. Kevlar was used for the floor pan, bumpers, and other high- stress components. The Luxury Touring Sedan was based on the Chevrolet Caprice, and in so doing underscored a major ongoing problem for the company, i.e, the lack of its own chassis.

The 1987-89 cars had been based on the El Camino and Monte Carlo platforms, and the system of using "borrowed" mechanicals had apparently worked well, but the Monte Carlo was taken out of production after the 1988 model run. In the end, the decision to use Chevrolet mechanicals made the company as vulnerable with respect to available componentry as it had been with Studebaker componentry-- which was why the switch to the Chevy chassis had been made in the first place. Now with the Monte Carlo out of production, the company was forced to switch to the larger Caprice. But, the Caprice was in its final year in 1990, too, and was scheduled to be superseded by another, completely re-engineered Caprice for the 1991 model year. So, the Avanti would have to be re-engineered yet again. It became a daunting problem for the company. In response, Cafaro determined (as had Blake before him) that the solution was for Avanti to assume the added burden and expense of developing its own chassis. In July, 1989, Callaway Advanced Technology, in Old Lyme, Connecticut, was hired for a reported $500,000 to handle the design and engineering. The plan was for the coupe and convertible to undergo similar redesigns for 1991. The 1991 models would have the Callaway engineered chassis, and, according to the company, would also have a front end redesign. This redesign would involve "a greater slope" to the hood, as well as front fender flaring to accommodate wider, performance tires. In July, 1989, the company also announced plans to build power boats. Meanwhile, the 1990 production schedule was supposed to have included three models: the convertible, the coupe, and the Luxury Touring Sedan. Nearly all sources claim that only sedans were actually built in 1990, although photographs of convertibles under construction have been published. It is not known how many, if any, convertibles were actually built and sold as 1990 models. In October, a visitor to the Avanti factory reported seeing a grand total of 26 cars. This included 10 Luxury Touring Sedans in various stages of construction, 13 convertibles and three coupes-- the latter all 1989 models--plus the remains of four Chevrolet Caprices.

Although many Avanti enthusiasts were outraged by the sedan, Tom Kellogg-one of the original designers--took a more positive view:

"When I saw the car, I was surprised by how nice it looked. I think it's one of the best-looking four-doors to come out of Detroit. Frankly, if I had the bucks, I think I would have gotten one."

"Road & Track" magazine, in a review of the "1990" convertible (which may have been a prototype), took a more jaundiced view of the general Avanti styling changes:

"The modern Avanti's shape looks somewhat blurred next to an original; excessive roundness takes the latest version perilously close to plastic-toy status. This could be blamed on the plastic bumpers, but changes wrought to produce the bodies in larger molds don't help, either. New is good; old is better. "

By March, 1990, with dealers screaming for four-door models, plant employment was back up to the 200 mark. On the 23rd, Cafaro personally conducted a plant tour for dozens of leading local businessmen and government officials. On that occasion, Cafaro announced further plans to expand and talking about the possibility of hiring an additional 130 workers. In May, however, with sales of the sedan stalling, the layoffs commenced again. By December, only about 20 people were still on the payroll, and only 10 cars had been built since the layoffs restarted. The Callaway chassis was supposed to have been available in March, 1990. By June, 1990, the company's estimate of the launch of the Callaway chassis had been pushed back to January, 1991--and only on a special order basis, at that. The company was likewise downplaying the future role of the classic Avanti coupe. By the late-summer of 1990, as sales of the sedan languished and the company's finances deteriorated, the Callaway chassis was indefinitely shelved. According to published accounts, Cafaro welshed on bills submitted by Callaway. Cafaro was quoted as saying, "I put myself into an engineering hole; now, I'm trying to dig out." Gary Fielding, who quit in March, 1991, blamed the company's troubles on the decision to halt coupe and convertible production in order to focus energies and resources on the sedan. When that occurred, according to Fielding, "the cash registers stopped ringing." Why the company's fortunes had been bet on this new, untried model in the first place was something of a mystery. Barry Toepke, who directed AAC's outside public relations and advertising efforts, recalled that the story he had heard "was that some of the Cafaro's friends said, hey, if there was a four-door version we'd buy it--that was their market research." The steady stream of complaints by disgruntled dealers and customers regarding warranty claims that began with the Blake regime, continued. Complained one authorized repair shop in 1989:

"Under the Altmans, prompt payment for warranty repairs was effected. This is not the rule [today]. As I review the past, the Avanti buyer was KING. Currently, Avanti owners question whether they have a valid warranty."

The company attempted a reorganization in 1991, and a few "1991" convertibles were reportedly delivered. What these consisted of is difficult to establish. They may have been leftover 1989-90 models, or cars built from existing parts. Perhaps six or seven convertibles were known to have been in some stage of production when the company switched its attention to the sedan program in the latter months of 1989. These 1991 convertibles used the same Caprice mechanicals as the sedan, and the same composite Kevlar manufacturing process. Priced at $65,964, they were reportedly being built on a "custom order" basis only. Worse, eight lawsuits or judgments had been filed against the company since October. One creditor, with a $64,500 judgment in hand, found it still couldn't collect because all of the company's assets were already encumbered. The litigants eventually included the company's advertising and public relations agencies.

It was rumored that Cafaro was interested in selling, and a group of South Bend investors was reportedly interested in buying, but the outstanding claims against the company made any sale difficult--if not impossible--to effect. The company's troubles were made all the worse by Government passive restraint standards. The waver granted in 1989 was due to expire with the 1992 models, so any Avanti effort at that time would have required additional expenditures for the complex engineering and manufacturing alterations necessary to accommodate either air bags or motorized shoulder harnesses. If Cafaro decided to develop a unique Avanti chassis, the ugly specter of Government certification came into view. And, as if that were not enough, the nation's economic picture looked decidedly bleak. The bruising recession of 1990 had continued into 1991 (and would do so into 1992, as well). Unlike in past recessions, where people with money seemed to be relatively less effected, luxury car sales across the board were hit hard by this one. Established makers were suffering mightily--U.S. Rolls-Royce sales, for example, collapsed from 1,200 units per year to fewer than 400--and there seemed to be little room for wannabes. As if to confirm that the Cafaro family had given up on the Avanti, J. J. Cafaro bought a mansion in the Washington D.C. suburbs in August of 1991. In following months, with the plant still idle, it was announced that a public health center would be moving into to the Avanti showroom in Youngstown. Then, in August of 1992, a fire in the Avanti factory seemed to rule out any possibility of resuming even limited production.

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