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The company's ad budget and dealer network are so limited that, as Churchill says, "our car must sell itself." He constantly preaches quality, plasters plants with signs proclaiming, QUALITY CAN'T BE REPAIRED INTO A CAR. He fears that as the U.S. living standard has gone up, the pride of the U.S. worker in doing a quality job has gone down. "Mercedes-Benz products are the highest crafted autos in the world," he says of the West German cars that S.P. distributes in the U.S. "We couldn't build the kind of product Mercedes-Benz builds." Mercedes' maker, Daimler-Benz, also has a high regard for Churchill. It has invested about $5,000,000 in S.P. preferred shares that can be converted after 1960 into some 5% of S.-P.'s common. S.P. stock has already risen so high (from a '58 low of $2.87½ to $12.50 last week) that a group of banks that last year forgave $38.2 million in corporate debt in return for convertible preferred with a par value of $16.5 million have begun to sell the shares at a profit.
SINCE taking over at S.-P., Churchill has cut executive payrolls from $1,250,000 to $350,000, even reduced his own salary from $64,000 to $60,000 a year—peanuts by Detroit standards. Like other S.P. executives in South Bend, Ind., he occupies a small office amid a clutter of gingerbready desks, cheaply painted walls. He lunches in S.-P.'s small dining room; one of his favorite dishes is hash. His home life is just as plain. A man who cannot keep from.working with his hands, he rebuilt a loo-year-old farmhouse from a tumbledown wreck, sanded his own floors, put in plumbing and electricity. On his 80 acres he raises cattle (56 beefy Herefords) and corn (yield: no bu. per acre), enjoys gardening (from Bibb lettuce to small yews) and finishing furniture in his home workshop ("It's the scabbiest workshop you've ever seen").
Churchill admits that his Lark is not the ultimate. One fault: the six-cylinder model is underpowered (he is beefing it up). He is not afraid of the Big Three's forthcoming compact cars. "They will have six-cylinder compact cars, but we have an eight," says he. S.P. will add a 1960 Lark four-door station wagon and a convertible, but confidently will make no basic changes in style. Churchill is betting that the Big Three's entries will fan public interest in U.S. smaller cars, double the market to more than 20%. And he believes that his Lark—already off to a flying start—will wing away with a fair share of it.