Why did ------- go out of buisness

[Kenny C]

Packard? Why their cars had fantastic styling.

[Greg G.]

http://en.wikipedia.org/wiki/Packard

[JorgeAmely]

I was going to say "bad management decisions" and refer you to the link that Brinybay posted below. Just scroll down to the 1946-1956 section.

[Dan]

Cadillac had what the pople wanted and Packard didn't change until it was too late.

[jsowers]

Here's my personal favorite, a 1955 Packard Caribbean Convertible. Independent makes had a hard time surviving the 1950s. Hudson and Nash also fell by the wayside. It was hard to compete with the big three--GM, Ford and Chrysler. Studebaker and Packard merged and the resulting 1957 and 58 models, that were obviously gussied up Studebakers with Packard nameplates on them, were disaster. The press called them Packardbakers.

[Kenny C]

I like it in white better but that is a great looking car. My mom actualy likes it.

[bingster]

The black over black with blue stripe is my favorite Caribbean color combination.  They're usually found in white over black with red or pink stripe, though.  Those were the most popular combinations.  Aqua over aqua with a white stripe was popular, too.

The wikipedia article gives a couple reasons why Packard isn't around anymore, but there's much more to it than the reasons given in the article.  

First, as mentioned, Packard purchased Studebaker with cash, which drained a lot of cash from the coffers.  The president of Nash had come to the correct conclusion that none of the four main independents would survive long without combining, and so a plan was set in motion to combine them all.  The plan was to merge Nash and Hudson, while Packard separately merged with Studebaker.  When the dust had settled from that round, the two companies would then merge into a full, four-line car company.  Studebaker would compete in the cheapest classes with Ford, Dodge and Chevy;  Nash would compete with Pontiac, Plymouth, etc.; Hudson would compete with Mercury, Buick, and DeSoto; and of course Packard at the top would compete with Cadillac, Imperial and Lincoln.  Packard being run by gentlemen for gentlemen, took people at their word.  When Studebaker's management painted their corporate health in glowing terms, the folks at Packard believed them to be truthful.  Unfortunately, Packard was doing business with unscrupulous people who were located far from Detroit.  Also, Packard, being rather mistrustful of other companies, decided there would be no mergers.  Packard wanted the whole shooting match to be owned by Packard, and at the time, they had the money to make that happen.  To that end, they bought Studebaker, lock, stock and barrel.  When it became apparent that Packard had been saddled by a massively disorganized, mismanaged company, they weren't in a position to do much about it.  This cash outlay for a company that was losing money was the first problem.  It was a fairly minor problem, though

Second, the president of Nash, who had come up with this brilliant plan, died shortly after the first round of mergers.  His replacement wanted no part of his predecessor's grand plan, and decided that Nash and Hudson would go ahead on their own.  His decision effectively sealed the fate of all four cars.  This left Packard stuck on a dead end road, dragging Studebaker along behind it, with no hope of financial relief from Nash and Hudson.

Third, the last all-new body Packard had come out with was the ultra-modern 1951.  When it came out, it was just about the most modern car you could buy, but by 1954 it was looking a bit tired.  Remember that in the 1950s, car makers got into the habit of making major yearly changes to their styling, and Packard's differences from the 1951 car to the 1954 car were only minor trim changes. Dick Teague (who went on to design the Javelin, Gremlin and Pacer for AMC) was called in to do a major renovation of the old '51 platform, and this resulted in the beautiful '55/'56 Packard.  Beautiful though they were, they were still built on the same platform of, and shared the same dimensions with, the old '51, at a time when all the other car companies were going with longer, lower cars.  Despite it's having been once the last word in modernity, by 1956 the body looked very stiff and upright.

Fourth, in the 1940s, the Briggs Corporation (a body builder) convinced Packard that they could build Packard bodies more efficiently and cheaply than Packard could.  So Packard stopped building bodies for their cars and gave that business to Briggs, who shipped completed bodies down the street to the Packard factory, where they were mated to the chassis.  Unfortunately for Packard, Chrysler purchased Briggs in 1954, and informed Packard they were no longer interested in supplying Packard with bodies.  This forced Packard, at the worst possible moment, to spend an enormous amount of cash to tool up to build bodies again.

Fifth, in the mid-fifties, Packard was let to believe that the massive, multi-story East Grand Boulevard factory they had occupied since moving to Detroit in 1903 was too old fashioned, and that they should move to a more efficient one story factory.  By this time, Packard was desperate, so they bit.  The last of the '54 models rolled down the lines at the old factory, and workmen ripped up the lines literally while walking behind the final car off the line.  All production was then moved into a tiny one story facility purchased from Chrysler.  The Packard old-timers called it a "crackerbox."

If you combine the last two items, you can see a serious problem setting up.  A sudden move to a cramped facility between model years, coupled with a need to instantly gear up for body production at the same time, resulted in massive quality problems.  New 1955 Packards were shipped to dealers with doors that wouldn't open, trunks that wouldn't close, and it was not at all uncommon for a dealer to receive an entire shipment of cars in one color, rather than a varied selection.  These quality problems were absolutely unheard of for Packard, and the damage to the company's unparalleled reputation among the public was severe.  All the problems were quickly corrected, but the damage was done.

But wait, there's more!  Sixth: By 1956, Packard's executives knew they couldn't trot out the tired old '51 yet again in 1957.  Money was needed to completely revamp the Packard car (and the Studebaker, because it's line was aging, too), so Packard went to the banks it had dealt with since first coming to Detroit in order to secure loans to finance new models (this is how all new models are brought out).  The banks turned Packard down flat.  Had they loaned Packard the money it needed, the story for both cars might have been very different.  The Detroit banks couldn't have killed Packard more surely than if they had used a gun.

Seventh, Packard was faced with a terrible decision.  Without the financial backing of it's old banking allies, and with next to no money of their own remaining, the company had only one option for carrying on:  Abandon the tiny factory in Detroit and move all production to South Bend, Indiana (the home of Studebaker), where Studebakers would be remodeled and re-badged as Packards.  When the public first caught sight of the "new" 1957 "Packard," they were horrified.  They stayed away in droves, as the saying goes.  The 1958 "Packard" was more of the same, and sold in even lower numbers.  They were cute cars, and Dick Teague worked feverishly to maximize every inch of length from the tiny Studebakers, but they just weren't Packards by any stretch of the imagination.

----------------------

A few comments as a prologue:

It's interesting to note that Packard emerged from WWII with the largest cash reserve of any American car company.  Packard had all the money in the world--more than GM, more than Ford, more than Chrysler. What's really interesting about this is that Packard was nowhere near as large as the big three, though it was the biggest independent.  But bad decisions by Packard executives and by outsiders caused the draining of all of that cash.

Also, any two or three of the problems above could have been weathered by any company, especially one as healthy as Packard.  Unfortunately, as you can see, there were far more than two or three problems, and they all fell upon the company within the course of just three years.  No company could have survived such a perfect storm.

The 1958 models would be the last cars from the company to ever bear the Packard name.  The company soldiered on producing Studebakers until 1967, at which point it fell back on it's old defense contracting businesses.  The company was sold, merged, diluted, etc., numerous times from the 1970s to today.

And what happened to all the Packard dealers?  Some stayed with the company, selling Studebakers, while others switched to other car companies.  Many of them though, turned to selling Mercedes Benz cars.  Why Mercedes?  Because in the mid-1950s, to raise a bit of cash, Packard had entered into an exclusive agreement with Daimler-Benz to be their sole North American outlet.  Most of the old Mercedes dealers in the US and Canada were once Packard dealers.

This is probably way more information than you probably thought you were going to get, but the story is a long, complicated and fascinating one.  

[AE_Collector]

I enjoyed the read Bingster. Always enjoy reading about cars...

Terry

[Dennis Markham]

I too enjoyed your "article" Bingster. Here I live smack-dab in the middle of of all of this automobile history and I did not know that story.  Perhaps had they had benefit of the tax-payer supported bail-out that GM & Chrysler recently had they might have survived.  But it sounds like their upper level management would need to be replaced.  Otherwise it would just prolong the inevitable, or perhaps even with new management the result would have been the same.

[Come in Nighthawk]

KEWL! 

As a little "epilogue," can you LUK "who" today owns the names (rights to the names) Hudson, Nash, Packard, and Studebaker?

As an example of why inquiring minds want to know, someone I used to work with chimed in around the water cooler one day that they had heard someone (one of those low-cost "start-up" airlines LIKE JetBlue IIRC) wanted to resurrect the name............ PanAM!  Our resident know-it-all said it couldn't be done as some holding company somewhere still owned the rights to the name!!!   

[bingster]

I just realized I confused "prologue" with "epilogue." 

The name and rights to the "Packard" name, etc. are currently owned by a man named Roy Gullickson, who tried to resurrect the car.  He even went so far as to have a working prototype twelve cylinder car built.  But such a thing is nearly impossible in this day and age, so he's actively trying to sell the name, the prototype, and everything else.  The last I heard (which was about a year ago), he was asking for one million dollars.

The Studebaker name is owned by the Avanti Motor Co., which is a bit like the tail wagging the dog.  Avanti, of course, was a Studebaker model, and rights to just that one model were sold after Studebaker stopped production.  Limited production of the Avanti continues even today.  In the 1980s Avanti bought the rights to the Studebaker name, too, and now they have grand plans for a full resurrection. We'll see how that goes.
http://www.studebakermotorcompany.com/overview.phtml

The Nash and Hudson names are owned by Chrysler.  AMC never sold the names, so they transferred to Chrysler when they bought AMC in the 1980s.

Dennis, you live right next door to a major part of Packard history!  Have you ever gone over there to check it out?

[Dennis Markham]

Every time I drive by the old Packard property I think to myself...I have to get some photos to send to Bingster.  I'll get some before the snow flies.  I have not investigated more closely than that.  I know they have gatherings of old Packards from time to time.  I'll keep my eyes open and look a bit deeper into what's still there.  The old water tower is still there but most of the property is now a subdivision.