The top 10 reasons why Packard died

Although Packard was losing sales annually in the early 1950s, it was still a strong company. Many feel if the automaker had shelved its ambitions to fill every segment of the market and instead concentrated on being a low-volume luxury producer of roughly 80,000 units a year—which it could have easily done—it would have been profitable and strong in spite of being a one-marque pony.

Don’t forget that Volkswagen, Mercedes, and—by the mid-1960s—Toyota and Datsun were single-marque producers in the U.S. But Packard President James Nance was fixated on merging with Nash, Hudson, and Studebaker to become the fourth “full line” auto manufacturer. In this scenario Packard would become the premium brand, with Hudson covering the Chrysler/Buick segment, Nash below that, and Studebaker handling the bread-and-butter Chevy/Ford/Plymouth market. Once Packard merged with Stude and American Motors President George Romney refused to consider a merger with Packard, it was the beginning of the end.

Here are the top 10 reasons why Packard died:

Moving its plant

Nance was an animated, driven man who looked at modernization as a key for both manufacturing and selling better products from his days running the appliance maker Hotpoint. The Packard plant on East Grand in Detroit was an old two-story facility. Modern assembly plants were on a single story, and so Nance sought such a plant.

Finding the Connor Avenue Chrysler plant available, he purchased it to assemble the heavily updated Packard for 1955. The fact that it had one-fifth the floor space of the Grand Avenue plant was of only minor concern. Single-story manufacturing was more efficient and modern. When production started at the Connor plant, the line was so crammed it was hard for workers to perform certain tasks, leading to shoddy building, and fixes were necessary at the dealer level. Packard, known for its high quality, was now seen as third rate by the public, and it cost Packard heavily from a warranty standpoint. The new 1955 Packards, advertised heavily with positive reception and deposits, were delayed, and once manufacturing got up to speed it never met the minimum daily production seen at Grand Avenue.

The never-was all-new 1955 Packard

Packard had an extensive program being developed for 1955 that included ingenious component sharing for a range of both Studebakers and Packards. Contemporary and stylish, they would have propelled the new company. But money was never available for the development necessary for these all-new cars slated first for 1955, then for a 1956 release. After the disastrous 1954 sales year, Packard was never seriously in a position to deliver on its extensive future planning.

Studebaker misled Packard before merging

 With due diligence necessary in any merger, Studebaker either misled or calculated incorrectly when assigning profits. Stude determined it would take 120,000 cars to break even. In 1950 and ’51, Studebaker produced more than 300,000 cars each year. But Studebaker’s manufacturing facilities were old, assembly was slow, and union troubles meant continual worker stoppages and strikes. After the merger, Packard accountants analyzed Studebaker’s figures and realized it would take almost 300,000 vehicles annually for Studebaker to break even, which it never came close to fulfilling after 1951. Studebaker drained millions of dollars from Packard right from the start, and it never stopped.

Late V-8

By 1950, Packard saw it would need an overhead V-8 to be competitive, but development and testing took years. Its straight-eight engine, an anachronism from the 1930s, would have to be good enough until the new V-8 finally arrived in 1955. By comparison, Cadillac and Oldsmobile got V-8s in 1949, and even money-strapped Studebaker offered one by 1951. Four years later, it was too-little, too-late for Packard.

Losing Briggs Body

Packard was known for making the finest automobile bodies in America, but to save costs it decided to farm out its body development to Briggs Manufacturing in the 1940s. In 1952, Chrysler bought out Briggs, agreeing to continue providing bodies to Packard through 1954, when Packard’s contract ended. Midway through finishing the heavily revamped 1955 models and moving manufacturing to the Conner facility, the chore and money drain to get back into the body stamping business cost time and money, and there were numerous body-fit problems once those first 1955s came off of the assembly line.

Dealers bailing and waiting for discounts

Packard’s dealers were a smart lot. They had a habit of keeping their inventories very low, waiting for the yearly factory discounts to kick in, when they could get plenty of Packards at reduced prices. In addition, both Chrysler and Ford waged campaigns to steal Packard dealerships, leaving Packard with an ever-dwindling and more-isolated dealer network. It was another built-in hurdle that Packard could never fix.

Gravy defense contracts evaporated

“Engine” Charlie Wilson was president of General Motors for years before being called upon to take over military manufacturing for the Eisenhower administration. Naturally, he favored GM, so the numerous military contracts that helped Packard make up its manufacturing losses started moving across town and into General Motors’ hands. Even Eisenhower saw the problem and advised Wilson to show Packard some love, but those contracts never reached the level they had been previously during Truman’s presidency. It became another unexpected development that cost Packard heavily.

Crosstown rival

Packard’s nearest competitor was Cadillac, which after WWII was a styling and engineering juggernaut. Dramatic styling, use of chrome, elegant interiors, and the ability to freshen up every year—if not advancing a completely new car every two-three years—was hard for smaller Packard to match. The new line of Packards and Studebakers planned first for 1955 (and then 1956) would have yanked the company back into the high-style parade, but it was too busy trying to stop the bleeding to divert precious funds toward development.

New shall soon be old

Packard’s all-new 1951 “high pockets” design was considered a styling milestone when it was introduced, but the high beltline meant a thick body mass, which quickly became old—especially parked next to a finned and sleek Coupe de Ville. The revamped 1955 Packards were a step in the right direction, but there was only so much the styling department could do with carry-over stampings from 1951. To the public, Packard looked like a stodgy, old man’s car.

No credit, no company

After James Nance left Packard, he became the vice president of marketing at Ford—we’re not kidding. That didn’t last long, and he moved back to Ohio and became president of a large bank, advising his peers that being on the giving end of loaning money was far superior to the borrowing end that he’d been accustomed to during his time in Detroit. Boy, was he right. Packard could always rely on credit lines to get through rough times, but as the company bled money following the Studebaker merger, banks grew scared of the direction Packard was headed. One by one, they pulled their credit lines. When the last bank said “no” in 1956, Packard consolidated its product line and assembly into Studebaker, and except for the unwanted “Packardbakers” in 1957 and ’58, it was finished manufacturing cars.