Packard, “Ask the Man Who Owns One”
Packard, “Ask the Man Who Owns One”
The Automobile business in the US in the early 20th Century was not unlike the computer industry near the end of this last century. The path was clear, sharp young men with money in their pockets, add in a little mechanical aptitude and there you have it. Rather than building Apple’s in their garages, these guys were building automobiles. Sounds simple enough build some sort of frame, install a power plant and brakes. Only, where do you get a carburetor?
Hardware is hardware, the existing technology of bicycles and carriages merged into automobile parts. It was difficult, but not impossible, to obtain parts in a week or two. But as the automobile business began to rise, it became more a question of running a good business, over building the best cars. Ford – sold on low cost, Duesenberg, on crazy money, expensive.
There were literally dozens of inventors; their world was changing as much as the Internet has changed ours. Farm children born in rural America in 1875, would most likely die on the farm, by 1920; this was no longer the case. These Americans lived in small towns or in the surrounding rural farms. “No phone, no light, no motorcar, not single luxury. Like Robinson Crusoe, they’re as primitive as can be.” The introduction of mechanical power to farm work sparked the imagination of little boys, who grew up to build the automotive industry.
In the small town of Warren, Ohio the Packard Brothers began in1900 producing cars. James Ward Packard was a mechanical engineer who believed he could build a better car than what was available. The brother’s partner, a man named George Weiss, was a stockholder in the Winton car company of Lakewood, Ohio. Weiss was hedging his bet; the smart money knew that someone was going to get a handle on this automobile thing.
Until 1903, the early Packards were equipped with a single cylinder engine,
The flywheel must weigh 200lbs. on the end of the crankshaft. An updraft carburetor into the cylinder and do you see that door spring, over there on the left? That’s the throttle return spring, a 2 speed transmission with chain drive. Sitting at the tiller you’re almost three feet in the air. You didn’t get into this car; you climb up on it. The Packard brothers were considered innovators in the industry. Packard pioneered the steering wheel, air conditioning and the first production V-12 engine.
Without our modern technology or computers, you must learn to be clever. Do you see that coiled copper line? The coils act as a fuel regulator, while also preventing vapor lock. A double leaf spring suspension, same as found on a farm wagon, but check out the plumbing fixture exhaust system.
Twenty years later, a Packard 4 cylinder engine, still with primer cups on each cylinder, but the exhaust system is recognizable as a modern manifold. Complete with magneto ignition, soon to be replaced by a distributor. This was a modern automobile…well, almost.
The left hand shifting never caught on, but this 1925 model did have a steel floor pan. Packards had a reputation for quality; their models ran neck and neck with Cadillac and Cord. The company took on investors and reorganized, relocating to Detroit with James Packard as President of the new Packard Motor Car Company. In a modern factory of 3,500,000 square feet, they began production of high end automobiles. This was a very successful automobile company, by 1912; the company had service facilities in 104 cities across America and in sixty-one foreign countries.
All was as it should be; gross revenue for the company was $21,889,000 for 1928. The stock market crash the following year, was the first major crisis the company had faced. It’s hard to imagine why, but the company faced with an economic emergency, decided to build even more lavish and ultra-expensive cars. Packard would survive the Great Depression, while many others closed their doors, but Packard was wounded.
Packard was an independent manufacturer, operating a single assembly line. The company standardized parts trying to stay competitive, but struggled in the market versus a Ford Motor Company or General Motors and fast rising Chrysler. Packard died from its relatively small size and from bad management. At one time, Packard was the 75th largest corporation in the United States. For more than thirty years, Packard had built their reputation selling high-end luxury cars. In 1935, the company did a complete about face and began building the Model 120; the first Packard priced under $1,000.
Production numbers tripled and then doubled, with the accompanying problem of selling more, but earning less. The Packard reputation was eroding; the 120’s were more modern in design than the luxury Packard models. If the customer can get most the Packard features in a 120, why spend big money? Nearly fifty years later, Cadillac produced the Cimarron model to compete with foreign competition.
The traditional Cadillac buyer didn’t want a small Cadillac, they wanted big Cadillac’s. The Packard 120 sold well, but alienated the traditional Packard buyers.
WW2 rescued the company financially, early in 1940 and 41 Packard built the Model 110, many used as taxi cabs. Packard built Merlin aircraft engines under license as well as engines for PT boats. Packard was 18th in the number of war time contracts.
When the war ended the company was cash rich and product poor, management had run the company as if the war would never end. The company had lost, misplaced or damaged much of its automotive tooling. Post-war Packard models lost their distinction between high and low priced models. Once again, Packard management had guessed wrong, this time concentrating on low cost models, when the post-war market wanted luxury.
In 1948, Packard sold 92,000 cars. In 1949, 116,000 cars but by 1950 Cadillac sales would surpass Packard, the death spiral had begun. When the going gets tough, sometimes management freezes. In fighting and disputes muddled an already troubled company, money pressure hamstrung production and innovation. Model sales in 1950 were down by half. Sales rebounded in 1951 to over 100,000 cars.
The days of the independent automakers were numbered. By 1955, Packard had planned to merge with Studebaker; management could have opted for a merger with Nash and Hudson to form American Motors. The merger with Studebaker was a marriage of convenience, Packard had cash money and Studebaker needed it.
The end came in 1959 when the Packard name was withdrawn from the market place. Packard built great cars, but made the wrong management decisions at critical times, building expensive cars when the market wanted inexpensive cars and inexpensive when the market wanted luxury. It is a lesson in automobiles, but also a lesson in business, if you cannot define your market, you will lose it.