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Board index » All Posts (Steve203)




Re: Value of cancelled government contracts in the fifties
#21
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Steve203
The answer to that question is very complex.

Easy question first. Did the loss of the contracts speed Packard's demise? Yes. Without looking in my archives for the exact numbers, defense contracts accounted for half, or less, of Packard's sales revenue, but 90% of it's profit. Kaiser's DOD contracts were so profitable, while the auto operation was making losses, that major Kaiser stockholders were pushing for the auto operation to be discontinued and the company concentrate on defense contracts exclusively.

DOD policy in the early 50s was to always have a "second source" for everything. GE could build plenty of J-47s, but Studebaker and Packard both received J-47 contracts in case something happened to the GE plant. Because neither Studebaker or Packard built jet engines in their normal course of business, the Air Force provided all the equipment, at great taxpayer expense, to duplicate the facilities that GE already had in place.

Because the DOD contracts were all cost plus a guaranteed profit, there were scandalous levels of waste and abuse billed to the government. In "Master Motor Builders", an incident is described where one of the Packard engineers on the Navy mine sweeper engine program wrote a letter to his higher ups at C-W after the takeover of the Utica operation, laying out the horrendously wasteful way that Packard was producing those engines, and the exorbitant amount of corporate overhead being billed to the engine program, all of which DOD paid for, plus paying Packard a guaranteed profit. The waste and abuse Kaiser perpetrated on it's C-119 contract was so far out of line it resulted in a Congressional investigation.

The cease fire in Korea in June 53 sharply reduced the amount of material the DOD needed. The Packard and Studebaker J-47 contracts were cut after the cease fire. Kaiser's C-119 and C-123 contracts were cancelled in June.

Eisenhower's SecDef from 53 to 57, Charlie Wilson, was a General Motors executive. There have been plenty of charges that Wilson went out of his way to hand business to GM, and take it away from GM's competitors. How much of that accusation is fact, and how much is sour grapes from the other automakers, I would not try to confirm.

So, yes DOD contracts were very lucrative and, had they continued at the levels of 52-early 53 may have extended Packard's life, but the contracts were effectively thinly veiled corporate welfare at taxpayer expense.

Posted on: 2016/7/17 13:56
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Re: Re-imagining Detroit's Packard plant for international exhibition
#22
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There have not been any new pix of the cleanup at the Admin building posted on Arte Express's Facebook page in months.

Palazuelo lost a big backer, and $80M in funding, in January. He says he will fund continuing work himself, but, after all the activity last year in rubble cleanup and asbestos removal, nothing much appears to be happening now.

Has anyone been by the plant lately? Any signs of activity?

Steve

Posted on: 2016/7/8 0:16
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Plant update
#23
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Building 92 has been looking particularly sad for some time, actually looking like a couple bombs had been dropped on it. The satellite view on Google Maps has been showing continuing collapse. Found a more recent ground level view from the cemetery.

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Posted on: 2016/3/12 17:40
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Re: Packard plant update
#24
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Palazuelo intends to move the headquarters of his own company into the admin building, and possibly a Packard museum.

Other sections could be used for light industry. Retired fighter Thomas Hearns reportedly has expressed interest in locating a gym there. Palazuelo says he would like to put condos in some of the buildings, but it's such a sketchy neighborhood, with no nearby amenities, people question that idea.

Posted on: 2016/1/28 21:02
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Packard plant update
#25
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Steve203
One of Palazuelo's backers has bailed out, and taken their $80M in funding for the renovation with them.

Palazuelo is continuing with asbestos removal in the Admin building using his own money. He says cleanup with be done in about 3 1/2 months and renovation of the Admin building will be complete early next year.

Details at the link.

http://www.crainsdetroit.com/article/20160124/NEWS/160129920/packard-plants-owner-says-project-moving-forward-despite-loss-of-80?utm_campaign=socialflow&utm_source=facebook&utm_medium=social

Posted on: 2016/1/25 17:01
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Plant update
#26
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Steve203
Cleanup continues in Admin building.

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Posted on: 2016/1/14 15:28
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Re: Packard V-8
#27
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Steve203
Quote:

Owen_Dyneto wrote:
A V8 as early as '53 or even '52 would have been helpful but I very much doubt it would have changed the ultimate outcome, just too many negative economic and market forces both internal to Packard and external for them to overcome.


Agreed. Packard was too far behind the curve, in too many ways that were expensive to catch up. Trying to correct the obsolete engine, and obsolete production facilities, and lack of a body plant, at the same time, required more capital than Packard could muster, and Studebaker didn't help with any of those issues.

Steve

Posted on: 2015/12/10 15:42
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Re: Packard V-8
#28
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Steve203
Quote:

58L8134 wrote:
Hi

Very late in development to the ballgame, too late in the marketplace to be competitive. Among the good reasons to read Robert J. Neal's last book Packard 1951-1954 are the detailed actions on V8 development from board of director minutes, year by year. Its well worth the time to read and be amazed by the decisions of the board.

Steve


Well, it wasn't *that* late to the ball game. Buick was still using a straight eight until 53 and Pontiac did not have an OHV V8 until 55.

What was inexcusable was the Packard engine and trans were put into production when half baked.

Steve

Posted on: 2015/12/10 15:36
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Plant update
#29
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Arte Express posted on their FB page than environmental abatement has started on building 13, the admin building.

Looking at the latest satellite pix on Google, by the time they get 13 renovated, there may not be much else left of the complex. Look at the building in the background of this pic.

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Posted on: 2015/12/1 17:39
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Possible tenent for part of the plant
#30
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Steve203
Detroit's Packard Plant could get Tommy 'The Hitman' Hearns boxing gym

http://www.mlive.com/business/detroit/index.ssf/2015/11/detroits_packard_plant_could_g.html

Article at the link has some recent pix of the wrap placed over the bridge over E Grand.

Posted on: 2015/11/23 17:07
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