(EXPANDED FROM 10/23/2020)
Old Car Brochures has an unusual marketing piece from Packard. “Story of a Living Legend and the world in which it grows” showcased the automaker’s history as well as its last-ditched effort to modernize.
On the back page of the booklet is a photograph of Packard’s East Grand Boulevard plant. The caption is ironic: “With every tick of the clock the Packard Legend grows.” The booklet was printed during the 1956 model year. Within months the automaker’s Detroit operations would close for good.
A big reason why Packard failed was because CEO James Nance embarked on an overly ambitious facility expansion plan. Here’s how the brochure explains it:
“Packard announces multi-million dollar facility modernization and improvement program; moves engine, transmission and axle manufacture to industry’s most advanced automation plant. Packard returns to making its own bodies for first time since 1941.”
Rapid expansion undercuts Packard’s legendary quality
George Hamlin and Dwight Heinmuller (2002b) describe the tragic consequences of trying to do too much, too quickly. This included shifting car assembly from the East Grand Boulevard plant to a new one on Conner Avenue.
A core element of the Packard “legend” was superior quality. Yet a 1955 internal memo discussed “snowballing” product complaints such as “loose wires, loose assembly” and “non-functioning items such as radios, clocks and windshield wipers and generators” (Hamlin and Heinmuller, 2002b; p. 596).
In fairness to Nance, he was merely following industry groupthink. At the time, the Big Three was obsessed with one-story assembly plants and greater automation.
Even so, in the pivotal year of 1955 Packard might have produced more cars, avoided quality-control problems and turned a larger profit if it had stuck with its old but functional facilities. Hamlin and Heinmuller (2002a) argued that all Packard needed was a new source for bodies. The East Grand Boulevard plant was large enough to build them.
Packard CEO had not learned how to ‘retrench’
Hamlin and Heinmuller (2002a) ruefully concluded that “Nance had never really learned how to retrench.” This was a crucial skill in the roller-coaster auto industry.
“When all the money was gone, and the Packard Detroit empire lay in ruins, many would come to wish that — just this one time — James J. Nance had passed up the opportunity to move ahead, to modernize, to expand” (Hamlin and Heinmuller, 2002a; p. 581).
Also see ‘Five (arguably) unresolved mysteries of postwar independent automakers’
This view is not always shared by other historians. James Ward (1995) argued that Nance was largely the victim of events outside of his control.
I disagree. Nance vainly tried to run Packard like it was one of the Big Three. He was neither the first nor last executive of an independent automaker to try to do so. However, Packard’s death was unusually quick.
Over the years the Grand Boulevard plant has become one of Detroit’s most famous abandoned buildings (Welsh and Welsh, 2014). The ruins offer a haunting reminder of what can happen when a small automaker thinks too big.
NOTES:
This is an expanded version of a story originally posted July 6, 2014 and restructured on Nov. 23, 2020.
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Hamlin, George and Dwight Heinmuller; 2002a. “America’s New Choice in Fine Cars: The Twenty-Sixth and the Fifty-Fourth Series 1953-54.” In Kimes, Beverly Rae, ed., pp. 562-581. Packard: A History of the Motor Car and the Company. Automobile Quarterly Publications.
- ——–; 2002b. “Let the Ride Decide: The Fifty-Fifth Series 1955.” In Kimes, Beverly Rae, ed., pp. 582-601. Packard: A History of the Motor Car and the Company. Automobile Quarterly Publications.
- ——–; 2002c. “The House Falls.” In Kimes, Beverly Rae, ed., pp. 602-621. Packard: A History of the Motor Car and the Company. Automobile Quarterly Publications.; 2002.
- Ward, James A.; 1995. The Fall of the Packard Motor Car Company. Stanford University Press, Stanford, CA.
- Welsh, Theresa and David Welsh; 2014. Detroit’s Spectacular Ruin: The Packard Plant. The Seeker Books (Kindle ed.).
BROCHURES & ADVERTISING:
- oldcarbrochures.org: Packard (1956)
“Pride goeth before the fall.”
I found a 3-part article by Ralph Kalal on his website Automobile Chronicles Automotive History-Then and Now that takes a different view of Packard and Nance. Perhaps indieauto and its readership has discussed Ralph’s views yet if not, Ralph’s analysis is provocative.
Thank you for the heads up, Bill. Here is the link to the website. I’ve only done a quick look around and don’t always agree with Ralph but his analysis is more detailed than a whole lot of other auto history I come across.
The article that caught my eye on the above link was Pat Foster’s debunking of the myth that the Packard 120 and 115/110 destroyed the company and Packard would have been better off carrying them as a separate marque.
Having just finished the 3 part story on How Leno got it wrong, and the two other linked articles by Foster it makes some enlightening arguments. Lots of overall financial number but thin on production number breakdowns. The breakdowns should also look at comparable Buicks and Oldsmobiles as most of Packards numbers were in those markets and not up against Cadillac.
Interesting how Packard was so debt adverse. Was this because their viewpoint was this was the reason they were able to outlast the Depression?
I do disagree with Foster’s complete disregard for the Senior Series. Packard has a massive amount of brand equity based upon their traditional top end. Foster is correct that the top end could not on its own sustain the company, but my belief is that it did not need to completely walk away from that segment either. Maybe find a more Rolls Royce solution of exclusive limited quantities but done efficiently, possibly using outside body builders. To my thinking, part of Packard’s problem is that they lost their pre-WWII brand equity quickly in the 1950s.
Foster really hits the mark with how Packard refused to do product development in the 1950s. Yes, the decision to incur no debt is an explanation but the world was rapidly changing and Packard was being left behind. Lacking a V8 and a quality automatic for the upper market segments was not being competitive. Packard was not going to have the ability to spend development dollars like GM and Ford but they still needed to keep viable.
Found this giving some thoughts on the bathtub design. Interesting point is that Christopher was intent on getting more life out of the pre-war tooling that had yet to be fully amortized. https://packardinfo.com/xoops/html/modules/newbb/viewtopic.php?topic_id=22837&forum=2
The Rolls Royce comparison is apt, so allow me to hop on my hobbyhorse. By the 30s RR was big in aviation engines and only increased through WWII. This was their bread and butter and could easily support the automotive side. Packard dabbled in aero engines since WWI and in fact license built RRs Merlin engine in WWII. Sadly they didn’t do any building on this. They could easily have had their OHV V0 by 1950 and with a solid aerospace division the company could survive the auto’s ups and downs. As you point out most of Packard’s production was in the mid price sector competing against the likes of Buick and Olds. And Mercury, DeSoto, Chrysler, Nash, and Hudson. Packard may have mn advantage here using the senior series as a halo car. So what if the mid price Packards cheapen the traditional Packard brand? Cadillac was sucking the oxygen out of what was left of the luxury car market WWII ended. Since in theory the seniors were losing money crank the luxury and technology up a notch or three and the price a notch or four. You may lose more money per car (see Mk II and El Dorado Barittz) but you won’t make a lot so the money loss may be less in total. However you still have the basic truth. The mid price car was the independent’s bread and butter and that was a brutally competative market.
Packard always traded off the Brand Equity that came from the Senior Series. That is what made the original 120 so desireable.
A modern V12 for what could have been a post war Senior Series would have made them notably different from the lesser models. It also would have offered something that Cadillac did not.
Not sure how much military work was going to be available for Packard. There is a prior discussion on Indie Auto about how the US Government severely reduced the quantity of suppliers for cost savings and did more concentration with the financially strongest.
Something that really only Cadillac understand in the 50s was that the premium car needed to be different in its design/sheetmetal that is was clearly distinguishable for the lesser lines. It took way more than adding a couple of trim pieces to make that difference. Packard had a real problem with this as their lower and so-called seniors were effectively the same bodies.
Packard had issues even when handed great opportunities. Look at what it took for Packard to accept the Darrin just pre-war. Or, as discussed elsewhere on Indie Auto, dealers not being allowed to get Carribeans when they had the ready buyers.
Good point. Each of the Big 3 had their looks back then, and even ifm you didh’t know the make, you could easily tell the company. However to me back in the 50s Imperial looked like a bloated Chrysler and not until 1956 did Lincoln manage to differentiate itself from Mercury. Packard did try with different grilles and later different taillights but you really needed a cheat sheet to tell the difference. While we’re on the subject, look at the bathtub station wagons. It kept the prewar wooden door look but instead of applique they replaced the exterior sheet metal with wood presumably at great expense. At some real cost savings they could be first with an all steel wagon. The ads just write themselves.
The Ralph Kalal articles are interesting, but he ignores the 1910s and 1920s, which were crucial decades in Packard’s history, and are important to understanding the company’s mindset.
Prior to 1930, the main struggle in the luxury market was not between Cadillac and Packard. It was between Packard and Pierce-Arrow. Packard trumped the latter with the introduction of the Twin Six in 1915, which was the first volume-production V-12. Packard’s V-12 was viewed as a tour de force, and moved the company ahead of Pierce-Arrow in image, which clung to its outmoded sixes for far too long.
But Packard also moved down market with the Single Six, which was introduced in 1921. It wasn’t immediately successful, but a quick facelift and the introduction of a longer wheelbase version (along with an economic recovery that began in late 1921) quickly boosted sales. Pierce-Arrow tried to meet this challenge, but never really did. By 1929, it was forced to sell out to Studebaker, as it lacked the funds to develop the desperately new models. (The sale to Studebaker gave it the resources to do so, and the resulting Pierce-Arrows initially boosted the company’s sales to record levels. But then Studebaker went into receivership, and had to sell Pierce-Arrow to raise some quick cash. On its own again, the company could not survive.)
Packard sales were quite impressive prior to 1930 for a luxury marque, and a large part of those sales were generated by the less expensive models, which competed in what we would today call the “near luxury” market.
Packard had thus pursued a dual strategy before 1935 – it relied on lower price cars to generate the sales that paid the bills (and kept the dealer body robust), but simultaneously produced true luxury cars that bolstered its reputation, and thus sold quite a few Single Sixes.
It seems as though Packard had briefly abandoned this approach by 1930, when it sold only luxury models. With introduction of the 120, Packard was only reverting to the strategy it had pursued during the 1920s. That was probably why Macauley didn’t immediately phase out the senior models, even if they did lose money. He realized that the prestige and image of the senior models sold those junior Packards – much as the Twin Six and then the Single Eight sold plenty of Single Sixes in the 1920s.
Also note that Packard dominated the upper reaches of the market even in the late 1930s. Packard’s V-12, for example, outsold the Cadillac V-12 and V-16 combined. Packard was the most popular choice for wealthy customers who wanted a custom body. Abruptly walking away from this market, as Kalal suggests, would not necessarily have been a wise choice – unless there something immediately available to fill that void.
Another factor to consider is that, during the 1920s, there was DOWNWARD pressure on auto prices. Henry Ford I kept cutting prices on the Model T, and other manufacturers were adopting mass production techniques, both of which put downward pressure on prices. Customers were not cross-shopping Ford Model Ts with Packard Single Sixes, but Ford’s price cuts were triggering price cuts in market segments higher up the food chain, so that dynamic was bound to affect Packard and other luxury car manufacturers. A business strategy that was based on building expensive cars without regard to cost, and then tacking an extra amount to the final price to ensure a profit, wasn’t going to succeed for long in that type of market – even without the onset of a severe economic contraction. Note that Pierce-Arrow and McFarlan were in trouble even before the Great Crash of 1929.
Postwar, Packard tried to follow the strategy it had pursued in the 1920s and between 1935-42. The problem was that the cars simply were not competitive with the class-leading offerings from Buick, Cadillac and Oldsmobile. By 1951, Packard was yesterday’s news – a company relying on past glories to peddle what was a perfectly acceptable, but nothing special, product. Meanwhile, Oldsmobile and Cadillac had advanced, world-class drivetrains, and all three GM marques had Harley Earl styling, which fit perfectly with the optimistic postwar mood. The buyers would not be the old-money people who had bought Packards, but the younger, more energetic class of self-made professionals who had won World War II, and who wanted hardtops, high-compression V-8s and flashy styling.
Unfortunately, Nance did not have enough time and money to turn this around, and he botched key decisions (moving all production to the Conner Avenue plant).
Great discussion! When I come up for air (may not be until early next week) I’ll dig up some background information that could add to some of the themes presented here.
One thing I noticed in Kalal’s analysis is he makes a compelling argument the fall of the Packard brand started long before Nance. So Nance’s efforts were not going to turn around a brand image that management had squandered years prior yet in Part 3 he says the problem Nance faced in the 50’s could only be solved by time. Kind of a 180 yet he made a persuasive argument that Nance didn’t stand a chance.