Re: New "What Ifs?"

Posted by Steve203 On 2014/6/14 8:34:38

Nance's goal was 200K/yr. They never came close. The market was strong, but Packard was weak.

Their prices were high, partly because of the low production rate to amortize deveopment and tooling costs over, and because of an obsolete, inefficient plant.

Their products were obsolescent. They clung to the flathead straight eight when the market was demanding OHV V8s.

At the end of WWII, they had the time and money to address the obsolete plant and product issues, but they didn't.

By the time they addressed the product issues with the 55-56 series, their resources had been frittered away. They still had inefficient production facilities, and the shortage of capital resulted in inaequate development of the features of the 55 models. The combination of poor build quality due to the production facilities and breakdowns of the underdeveloped components destroyed the product's reputation.

Then there was the added drain from Studebaker. Nance had rushed into the merger because his financial people were telling him Packard was "on a path to bankruptcy", but the merger accelerated that same path.

The point of these "what if" threads was to see if there was any way that Nance could have kept Packard going a bit longer if he had made a couple moves differently.

-what if he had bought the Kaiser Willow Run plant, a modern, fully equiped, auto body and assembly plant, in the six week window between Kaiser's loss of it's Air Force contract, which precipitated Kaiser's abandonment of Willow Run, and the plant's purchase by Hydramatic.

-what if he had waited until Studebaker went bankrupt and cherry picked a few assets, consoldiated Studebaker production with Packard at Willow Run, and abandoned Studie's liabilities in South Bend.

The bottom line is, he couldn't have bought Willow Run, because he didn't have the $30M to do so. Without an efficient plant, buying Studebaker assets in liquidation to pump up production volume and the dealer network would not have helped.

It's fun to speculate, but, by the time Jim Nance came on the scene in 52, it was too late. I put the 55-56 Packards in a league with the Cord 810 and the Avanti, brilliantly conceived, but terminally flawed by the company's underlying weakness.