Founded as Lord & Thomas in Chicago in 1873, Foote, Cone & Belding (known today as FCB) is the world’s third-oldest advertising agency. Albert Lasker, known as the “father of modern advertising”, made Chicago his base from 1898-1942. As head of the Lord & Thomas agency, Lasker devised a copywriting technique that appealed directly to the psychology of the consumer. Campaigns created for Lucky Strikes, Palmolive Soap, Pepsodent, and Kotex revolutionized the advertising industry but also significantly changed how products were marketed to women.

 

The Middlemen for floating the concept

 

In 1942, Lasker sold Lord & Thomas to its three top managers, Emerson H. Foote in New York City, Fairfax Cone in Chicago, and Don Belding in California, who renamed it Foote Cone & Belding.

Robert H. Eppler, circa 1966

Why are we discussing advertising agencies?  Deep in the Internet Checker Taxicab Archive, we have a very interesting document.  It’s a 1964 letter penned by Robert H. Eppler Vice President for Foote Cone & Belding addressed to W. O. Maxwell of International Harvester Company, the subject: The acquisition of Checker Motors Corporation.

Today known as Navistar International the company was created via the merger of McCormick Harvesting Machine Company and the Deering Harvester Company in 1902 resulting in the formation of the International Harvester Company (IH) of Chicago, Illinois. Over the next three-quarters of a century this company would evolve into a diversified manufacturer of farming & construction equipment, gas turbines, trucks, buses, and related components.

 

Introduction of the Checker to rural markets could have leveraged new markets

 

The letter and it’s research is compelling and frank.  Eppler states “What I am proposing is the IH buys Checker Motors Corporation of Kalamazoo, Michigan”.  Eppler made six compelling arguments of potential tie-ins for both manufacturers.

  1. Many parts including major sub-assemblies could be common to the Springfield line of International trucks.
  2. From a marketing viewpoint, International Harvester and Checker might work well together in the sense of fleet sales operations.
  3. Having a large share of taxicabs carrying the IH emblem could provide invaluable publicity and unusual visibility for International Harvester’s products among the general public.
  4. With International Harvester’s large rural dealer population,  this highly practical passenger car line with local parts and service might be offered to rural families for the first time.
  5. Ultimately the many common sheet metal and mechanical parts which could result from a merger or purchase could improve the volume and profits of the Springfield truck line.
  6. The core of existing Checker dealers could handle the light truck line profitability and help increase market penetration in this competitive arena particularly in urban areas where the division now must battle Chevrolet, Ford and Dodge dealerships.

In the 1960s International Harvester was in the process of expanding its truck line and its production facilities. At the time of the writing of this letter the IH truck division was building a new and modern plant in Springfield, Ohio. IH was in a healthy financial position, 1965 sales for IH truck exceeded $1 billion in revenue.

 

FCB presented synergies for the Springfield line of truck tied in with Checker

 

The Springfield line was an internal corporate name referring to the publically named S Line of medium sized trucks.  First introduced in 1955,  like the Checker it would have a long production run with light modifications to its appearance until being replaced by the 1100 line in 1969.

The six arguments are compelling, combining  two companies together that operated in two different markets: rural versus urban made a lot of sense.  Additionally the idea of rationalizing parts and sub-assemblies are concepts embraced today in the 21st century globally.

 

The merger could have combined rural IH dealers with Checker urban dealer network

 

The FCB assessment also presents the Checker versus Chrysler Corp litigation that was ongoing in 1964.  Checker claimed 45 million in damages, charging that Chrysler was in essence dumping taxi’s in the market at lower than market prices subsidized by retail automobile sales.  They also charged that Chrysler was offering trade-in values higher than market and were promoting the notion that Checker was going to soon discontinue taxicab production.  To add insult to injury, Checker charged that Chrysler had done this after they were aware of Checkers intent to purchase Chrysler components and that Checker’s expansion plans were to increase production to 24,000 units a year.  Assuming triple damages, Checker envisioned 625 million in funds to be deposited on the left side of the balance sheet.

 

This 1964 Checker ad slams the 64 Chrysler Corp Offering

 

Clearly this merger never happened. Had it happened, would it have been successful, it’s hard to say, but it is interesting to note that IH would ultimately lose its battle to the big three in the pickup truck market.  IH discontinuing the entire fullsize pickup truck line in 1975.  Additionally,  Checker would end automobile production in 1982.  Perhaps the merger of the two companies would have been comparable to the Studebaker and Packard merger of 1954 once described as being comparable to “two drunks helping each other cross the street”.

 

The last medium sized IH produced truck would mark the end of competition with Ford, Chevy and Dodge

 

The other big question is who really created this idea?  Did it originate from Robert Eppler at PCB or did it originate with Checker’s CEO Morris Markin?  A significant amount of content in the proposal is clearly from Checker promotional material.  Did Markin use Eppler as a Chicago based middleman to reach out to IH?  Realistically, for Markin it could have been a good time to cash out?

Markin may have seen the writing on the wall.  Checker would ultimately lose the litigation with Chrysler.  Chrysler would continue to expand in Checker’s only dominant market.  Checker sales had already started to decline from the highpoint of approximately 8000 units in 1962.  Reviewing Checker production metrics,  its very clear that the expansion into the retail market in 1960 had not significantly increase Checker production trends, maybe it was time to collect all the chips on the table and bow out of the automotive game of poker?

Both companies would move on into the 21st century, so in the big picture it’s hard to pin a decision from 1964 to having any impact on Checker’s or IH’s ultimate survival.  That said one must wonder what possibilities existed had the transaction actually taken place?

If you would like to see the entire PCB assessment just click on the Facebook link to join the Internet Checker Taxicab Archive and you’ll find the document in the Facebook group files tab.

https://www.facebook.com/groups/145497838799022/