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My copy of "Master Motor Builders" arrived today. I'll read the entire book in due time. Tonight I skipped ahead to the discusson of postwar engine development.

Yes Packard proposed a "cheaper" version of the mine sweeper engines, with the special non-magnetic materials replaced with cheaper metals. The result for the 1700 was a price reduction of $1,200, on a $46,000 engine.

There were no takers.

Marsden Ware, who had been Chief Engineer, Development Design, under Packard stayed on with Curtiss-Wright as Special Products Chief Engineer.

In December 56, Ware sent an 11 page memo up the chain regarding the diesels.

The thrust of the memo was that, while the advantages of some of the engine's design features, and their good record with the Navy would allow some price premium, Packard's pricing had been wildly off the mark. He stated that, in March 56, the price of a 600hp, 1700 was $44,000, of which $24,000 was materials and labor, and $20,000 was overhead and profit. In comparison, comparable engines from Cat and Cummins could be had for roughly what Packard was charging for overhead alone.

He said there was potential to reduce production cost by design changes, but not nearly enough to close the gap.

He laid the problem on the fact that Packard had outsourced most of the machining and subassembly work. In his example of the 12 cylinder model, of the roughly $24,000 of material and labor, only $3,480 was work actually done by Packard, while $20,480 went to outside vendors. I would expect the vendor billings covered the vendor's overhead and profit, so there was probably a good $9,000 per engine going out the window above what Packard's cost would have been if the work was done in house.

This sounds a lot like the body building deal with Briggs. Packard takes the short term easy out by farming out the work, rather than investing in the company, which would have been more profitable in the long run. I also wonder if Ware had ever expressed these same concerns to Packard management. Management certainly did not act on them.