Chrysler's friendly acquisition of Packard in the early 50s

[Carmine]

I wrote this reply to an online article as sort of an "alternate history" regarding the decline of Packard Motor Company beginning in the early 50s. Someone replied yesterday and it reminded me that a few of you here might have some interesting takes as well. Please weigh in if the subject interests you.
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This article (and the one preceding it) are very interesting reads.

Charge of the Light Brigade: The Last Stand of the Packard Motor Car Company > Ate Up With Motor

Both my grandparents and my father were Chrysler employees, as I am currently. I read this article through Mopar-centric eyes, but the family history begins with my maternal grandfather building both Plymouth and Packard bodies for Briggs after he returned from WWII. (He became a Chrysler employee through acquisition.) He told me a lot of stories about Packard; including bringing home seat material that my grandmother turned into clothing. Even the rank and file it seems considered Nance’s decision to build cars at Conner “crazy”. There were areas in the plant were the cars simply couldn’t be driven because the distance between support columns was too small. Sometimes they were driven. And damaged.

Thus allow me to propose alternate histories, beginning in late 1950.

Joint Venture: Packard needs a V8 and Chrysler needs an automatic transmission. Even at the time, Chrysler promotes the Hemispherical cylinder head as the key feature separating their 180 HP 331 V8 from Cadillac’s 160 HP 331 V8. Thus they agree to sell Packard short-block assemblies with Packard adding their own conventional wedge heads. Nothing mechanical would prevent this. Chrysler retains the marketing advantage and Packard “saves face” with a twist on the basic architecture; perhaps a bore change, cam differences or multiple carbs. Chrysler continues its Fluid-Drive branding by labeling Packard’s transmission “Fluid-Matic”.

Merger and/or purchase by Chrysler: Begins as described above, but continues with a shared metal forming operations purchased from Briggs. After a transition period, Conner does nothing but stamp and ship metal to a new Packard body shop within their Grand Boulevard factory, and to Chrysler’s new Lynch Road Plymouth body shop. All of which (except a new Packard body shop) occurs anyway. Chrysler no longer has to try moving Imperial upmarket in 1955 because it has a prestige make. Packard gains a much larger dealer network and achieves economies of scale on commodities items. The inefficiencies of the Grand Boulevard plant aren’t a pressing concern because the Packard (brand) no longer needs volume.

Pros: K.T. Keller and George T. Christopher are both “manufacturing men” from GM with a conservative bent. Pre-1955 Chrysler and Pre-1953 Packard are considered producers of technically superior (if unexciting) automobiles; there probably wouldn’t be a culture clash. It’s easy to imagine many circa 1950 garages in the US where the husband drives a Packard, the wife has a Chrysler and the maid uses a Plymouth wagon. Both companies eventually move to torsion bar suspensions. Both companies are defense contractors. Both companies need all-new lines by 1958… Perhaps this prevents the ’57 Mopars from being “rushed” out the door?

Cons: Do Keller and Christopher convince each other not to invest in styling departments and ultimately wither by producing cars for a dwindling demographic of librarians and old-money snobs? That’s about the only downside I can imagine. I can’t see the government getting in the way with GM at near 50% of the market.

Post Script: Chrysler Corporation achieves a measure of status that reflects positively on the entire company and never gets distracted by trying to create a separate Imperial division that goes nowhere. Packard hums along for another decade at Grand Boulevard almost semi-autonomously with their Predictor re-touched by Virgil Exner. Chrysler Defense reaps the rewards of Packard’s defense contracts throughout the 50s and 60s. Much like the actual Imperial, the Packard continues with separate B-0-F while the rest of the company moves to unitized construction in 1960. In the mid-60s, Packard division moves to a modern one-story plant in the Detroit suburbs and the quality difference (due to the tooling and workforce) becomes even more apparent vs. Cadillac’s built at the ancient Clark Street plant. By 1966, Chrysler realizes the profit potential of near-luxury cars like the T-bird and Rivera and introduces a high-style Chrysler coupe known as the Cordoba on the B-body platform (never having felt the pressure of not producing “junior edition” Chrysler models.) The success of the Cadillac Eldorado and Lincoln Mark III spur the Packard division to produce its first unitized body car in 1969… A coupe built on the new C-body platform, known as the Packard d’oro. It’s hard to see the 80s being much different as traditional luxury/prestige cars all take a beating. The generation gap means that any American car (luxury or not) has been perceived as a symbol of the “establishment” since the boomer generation was in college overheating their Fiats or pop-riveting the structural rust on their Hondas. Thus Chrysler is feeling the same hurt in would have felt circa 1980, even if their full-framed Senior Packard 400s are still selling in modest numbers in retirement communities and to funeral parlors. Lee Iacocca still must come to the rescue, but this time he has a legitimate Town Car/Brougham competitor being built at Packard’s Utica plant (Packard proving ground work having moved up to Chelsea, MI in the late 50s; the land became the site of the new plant.) In 1991, Lee Iacocca decides to retire from the auto business and takes on a more active role in the diabetes research charity he founded. (A cure is found by 2007.) However, this time he feels confident handing the role of CEO to Jerry York, who processes both financial and engineering degrees. He’s just the right personality to both encourage and rein-in the team of Robert Lutz, Tom Gale and Francois Castang. In 2002, a mid-level GM executive named Bob Eaton is unceremoniously fired from their Opel division for funneling corporate money into the construction of an ugly stucco McMansion in Naples, FL.

 

[Carmine]

Reply by Aaron Severson (Author):

With regard to the move to Conner Avenue, I don’t think it was either crazy or a blunder. It was certainly a miscalculation — obviously, both Nance and the finance people who proposed it in the first place underestimated how much trouble it was going to be — but the potential reward was dramatically cutting overhead and reducing the break-even level to a sustainable figure. That’s not a trivial thing, so I can see why Nance was willing to do it.

As for merging with Chrysler, I think what’s easy to forget with regard to alternate-history merger speculation is that another or different merger wouldn’t have avoided a basic philosophical question with regard to Packard’s future: what sort of brand Packard should be and what it should offer. The general presumption of a lot of these things is that Packard would have been the ultra-luxury brand for whatever company or conglomerate ended up with it. However, Packard had realized almost 20 years earlier that trying to be solely an ultra-luxury brand was not sustainable anymore. One may certainly criticize (as I do) Christopher’s apparent determination to make Packard into Buick, but the point remains that Packard could not have survived as solely an upper-crust brand. Even if they had sustained more of their former old-money pedigree into the ’50s (which they really didn’t), the market just wasn’t there; the commercial failure of the Continental Mark II and Cadillac Eldorado Brougham makes that clear enough.

If you threw Chrysler into the mix, the question would have gotten even messier. One of Chrysler’s bigger problems during the period in question was that its Chrysler, DeSoto, and Dodge brands were like cats who all want to sit on the one choice spot in the sunbeam, which ultimately killed DeSoto. If Packard were a separate division, its leadership would likely have gotten frustrated (and tired of getting yelled at by dealers) at not having a cheaper, higher-volume model to sell, so you would probably have ended up with a Packard Clipper competing directly with the Chrysler Windsor, Dodge Custom Royal, and DeSoto Firesweep. If Packard were in the place of the historical Imperial, you might still have had the same thing (with Chrysler hoping the Packard name would lure away some DeSoto and Dodge buyers) or else have Packard fall into the same third-rank niche Imperial ended up in, for most of the same reasons.

So, in the scenario you’re envisioning, I mostly see the unanswered questions vis-à-vis Packard’s brand identity leading the merged entity to make a lot of the same historical mistakes, albeit under different names…

(my reply to the above)

*Nance and the finance people who proposed it in the first place underestimated how much trouble it was going to be — but the potential reward was dramatically cutting overhead and reducing the break-even level to a sustainable figure.*

How well things work on paper vs. practice is the eternal argument, isn’t it? Of course there was a great potential for reward; people at that level (usually) don’t make crazy decisions in the truest sense of the word. But with 20/20 hindsight, Nance bet on the wrong horse. I think if I’d been there to argue, much of it would have been based on the costs/delays of moving fixtures/equipment for a vehicle that was largely unchanged since ’51. The time to move would have been when they built an all-new car, building pilots (and making mistakes) on vehicles that never see the customer while the last year of production winds down on Grand Boulevard.

*a basic philosophical question with regard to Packard’s future: what sort of brand Packard should be and what it should offer. The general presumption of a lot of these things is that Packard would have been the ultra-luxury brand … Packard could not have survived as solely an upper-crust brand. Even if they had sustained more of their former old-money pedigree into the ’50s (which they really didn’t), the market just wasn’t there…*

I don’t argue this point one bit. If you want to see where the ultra-luxury Duesenberg/Packard money went in the modern era, you need look no further than the cottage-industry of exotic and Euro cars that existed in the 50s-present. That isn’t a market that can be conquered by any mass-market brand, because by definition they are not mass-market. We don’t see beige 4-cyl. Mercedes taxis in the USA. The place for Packard would have been right there with Cadillac/Lincoln with an occasional foray into something like an Eldorado Brougham, Mark II or Ghia Limo. Those are image makers, even if money losers. The profits have to come from people who could be content with a Buick, but either want to show off a little OR simply purchase the car because THEY love the style (the latter is never given consideration by the “inconspicuous consumers”, but I digress). Volume can come from black cars and other professionals. That’s where I would have positioned Packard, pretty much doing what the Imperial did, but with an identity/history to draw upon as well as a dealer network more accustomed to Packard customer expectations. I probably should have stated that Packard franchises in metro areas would be exclusive, but available to pair with Chrysler dealers in rural areas (with separate showrooms/service counters).

*If you threw Chrysler into the mix, the question would have gotten even messier. One of Chrysler’s bigger problems during the period in question was that its Chrysler, DeSoto, and Dodge brands were like cats who all want to sit on the one choice spot in the sunbeam, which ultimately killed DeSoto.*

Again, no disagreement. In 1950, I would have slowly begun killing both Dodge cars and Desoto lines while my (metro) dealers transitioned to Packard (exclusive, top level), Chrysler (exclusive, upper-middle with multiple size models when the market fragmented in the 60s) Plymouth/Dodge Trucks (volume brand, muscle cars in the 60s. Remember that Dodge Trucks also extended well above 1-ton in this era). In rural areas, I would have paired C/P/D and allowed Packard showrooms on the same property. Of course I’m saying this through the lens of time. To know how the market would shake out 60 years later (and be able to convince others) would make you a genius.

*If Packard were a separate division, its leadership would likely have gotten frustrated (and tired of getting yelled at by dealers) at not having a cheaper, higher-volume model to sell, so you would probably have ended up with a Packard Clipper competing directly with the Chrysler Windsor, Dodge Custom Royal, and DeSoto Firesweep.*

One thing that I don’t think would require genius-level intelligence would have been recognizing, even in 1965, that Chrysler’s “no junior editions” philosophy was stupid. Perhaps that realization would have prevented some of the ridiculous model-overlap. You could try that argument with Imperial, since no US luxury make was doing less-than-full-size cars (I hesitate to call an Eldo/Mark “small”). But Chrysler? How is a manual brake/steering, blackwall Newport NOT a junior edition, but a ’65 T-bird/Riv is? Dumb, dumb, dumb. I suppose my hope is that bringing Packard into the tent forces the marketing department to realize Chrysler is a near-luxury/specialty brand. If Chrysler had invested in distinct, shorter-overhang sheet metal for the ’65 300, using the Hemi as planned in ’66, you’d have a perfect T-bird/Riv killer. Instead they took it downmarket for short term volume and squandered a great brand.

But back to the original argument… Remember there would have been a transition period, lasting from about 1951 to 1960 (when a new car would be required) where Packard would have functioned much more autonomously. Their own factory, their own engineers, distinct bodies. I draw the parallel of Jeep/Truck engineering being entirely separate from Chrysler at CTC until 2008. My hope would be that during the period of 1951-1962 Chrysler (brand) stops trying to move up and downmarket at the same time (Imperial separation, Newport intro, end of letter series 300) because Packard’s presence forces them to focus on the upper-middle market. Of course I say hope… I’m sure you have to overcome a lot of short term thinking, but I believe a Packard acquisition makes this easier, much like buying Jeep kept Dodge focused on on-road trucks, rather than an off-road capable SUV. The purchase of AMC/Jeep is the only merger I can think of in the modern era that was well-done, and part of that was staying distinct for such a long period… basically until everything was redesigned a few times.

*So, in the scenario you’re envisioning, I mostly see the unanswered questions vis-à-vis Packard’s brand identity leading the merged entity to make a lot of the same historical mistakes, albeit under different names…*

Don’t forget that I solved Packard’s V8 and Chrysler’s automatic trans issue. I think that buys Packard some time and adds some sales to Chrysler. I didn’t suggest Packard turn itself into a niche company, but having some scale with Chrysler allows them to build a few niche models. I also the think the market place was more forgiving in that era… Pontiac and Oldsmobile both climbed out of their doldrums in that era, I believe Packard could have done the same with the right product mix and marketing.

At any rate, the whole thing is speculation done with the benefit of hindsight. The automotive equivalent of Fantasy Football I suppose, but a much better mental exercise

 

[BIGBARNEYCARS]

I wrote this reply to an online article as sort of an "alternate history" regarding the decline of Packard Motor Company beginning in the early 50s. Someone replied yesterday and it reminded me that a few of you here might have some interesting takes as well. Please weigh in if the subject interests you.
-------------

This article (and the one preceding it) are very interesting reads.

Charge of the Light Brigade: The Last Stand of the Packard Motor Car Company > Ate Up With Motor

Both my grandparents and my father were Chrysler employees, as I am currently. I read this article through Mopar-centric eyes, but the family history begins with my maternal grandfather building both Plymouth and Packard bodies for Briggs after he returned from WWII. (He became a Chrysler employee through acquisition.) He told me a lot of stories about Packard; including bringing home seat material that my grandmother turned into clothing. Even the rank and file it seems considered Nance’s decision to build cars at Conner “crazy”. There were areas in the plant were the cars simply couldn’t be driven because the distance between support columns was too small. Sometimes they were driven. And damaged.

Thus allow me to propose alternate histories, beginning in late 1950.

Joint Venture: Packard needs a V8 and Chrysler needs an automatic transmission. Even at the time, Chrysler promotes the Hemispherical cylinder head as the key feature separating their 180 HP 331 V8 from Cadillac’s 160 HP 331 V8. Thus they agree to sell Packard short-block assemblies with Packard adding their own conventional wedge heads. Nothing mechanical would prevent this. Chrysler retains the marketing advantage and Packard “saves face” with a twist on the basic architecture; perhaps a bore change, cam differences or multiple carbs. Chrysler continues its Fluid-Drive branding by labeling Packard’s transmission “Fluid-Matic”.

Merger and/or purchase by Chrysler: Begins as described above, but continues with a shared metal forming operations purchased from Briggs. After a transition period, Conner does nothing but stamp and ship metal to a new Packard body shop within their Grand Boulevard factory, and to Chrysler’s new Lynch Road Plymouth body shop. All of which (except a new Packard body shop) occurs anyway. Chrysler no longer has to try moving Imperial upmarket in 1955 because it has a prestige make. Packard gains a much larger dealer network and achieves economies of scale on commodities items. The inefficiencies of the Grand Boulevard plant aren’t a pressing concern because the Packard (brand) no longer needs volume.

Pros: K.T. Keller and George T. Christopher are both “manufacturing men” from GM with a conservative bent. Pre-1955 Chrysler and Pre-1953 Packard are considered producers of technically superior (if unexciting) automobiles; there probably wouldn’t be a culture clash. It’s easy to imagine many circa 1950 garages in the US where the husband drives a Packard, the wife has a Chrysler and the maid uses a Plymouth wagon. Both companies eventually move to torsion bar suspensions. Both companies are defense contractors. Both companies need all-new lines by 1958… Perhaps this prevents the ’57 Mopars from being “rushed” out the door?

Cons: Do Keller and Christopher convince each other not to invest in styling departments and ultimately wither by producing cars for a dwindling demographic of librarians and old-money snobs? That’s about the only downside I can imagine. I can’t see the government getting in the way with GM at near 50% of the market.

Post Script: Chrysler Corporation achieves a measure of status that reflects positively on the entire company and never gets distracted by trying to create a separate Imperial division that goes nowhere. Packard hums along for another decade at Grand Boulevard almost semi-autonomously with their Predictor re-touched by Virgil Exner. Chrysler Defense reaps the rewards of Packard’s defense contracts throughout the 50s and 60s. Much like the actual Imperial, the Packard continues with separate B-0-F while the rest of the company moves to unitized construction in 1960. In the mid-60s, Packard division moves to a modern one-story plant in the Detroit suburbs and the quality difference (due to the tooling and workforce) becomes even more apparent vs. Cadillac’s built at the ancient Clark Street plant. By 1966, Chrysler realizes the profit potential of near-luxury cars like the T-bird and Rivera and introduces a high-style Chrysler coupe known as the Cordoba on the B-body platform (never having felt the pressure of not producing “junior edition” Chrysler models.) The success of the Cadillac Eldorado and Lincoln Mark III spur the Packard division to produce its first unitized body car in 1969… A coupe built on the new C-body platform, known as the Packard d’oro. It’s hard to see the 80s being much different as traditional luxury/prestige cars all take a beating. The generation gap means that any American car (luxury or not) has been perceived as a symbol of the “establishment” since the boomer generation was in college overheating their Fiats or pop-riveting the structural rust on their Hondas. Thus Chrysler is feeling the same hurt in would have felt circa 1980, even if their full-framed Senior Packard 400s are still selling in modest numbers in retirement communities and to funeral parlors. Lee Iacocca still must come to the rescue, but this time he has a legitimate Town Car/Brougham competitor being built at Packard’s Utica plant (Packard proving ground work having moved up to Chelsea, MI in the late 50s; the land became the site of the new plant.) In 1991, Lee Iacocca decides to retire from the auto business and takes on a more active role in the diabetes research charity he founded. (A cure is found by 2007.) However, this time he feels confident handing the role of CEO to Jerry York, who processes both financial and engineering degrees. He’s just the right personality to both encourage and rein-in the team of Robert Lutz, Tom Gale and Francois Castang. In 2002, a mid-level GM executive named Bob Eaton is unceremoniously fired from their Opel division for funneling corporate money into the construction of an ugly stucco McMansion in Naples, FL.

Carmine,That firing of Mr. Eaton for the reason stated above should have been the alarm bell of the gentleman's character long before he found his way into the position of receiving the golden parachute he did when he signed to papers with the Nazi's. Friends of mine at the Proving Grounds and in Auburn Hills watched their annual bonuses evaporate that year when the 11 B in the slush fund got transferred in less then 24 hours to the MB corporation. That deal even hurt me only because it hurt many of my friends. I'm surprised even to this day that arrangements weren't made to have him join Jimmy Hoffa, Jer

 

[Carmine]

Carmine,That firing of Mr. Eaton for the reason stated above should have been the alarm bell of the gentleman's character long before he found his way into the position of receiving the golden parachute he did when he signed to papers with the Nazi's. Friends of mine at the Proving Grounds and in Auburn Hills watched their annual bonuses evaporate that year when the 11 B in the slush fund got transferred in less then 24 hours to the MB corporation. That deal even hurt me only because it hurt many of my friends. I'm surprised even to this day that arrangements weren't made to have him join Jimmy Hoffa, Jer

Just let me point out that Eaton was never fired from GM, for financial malfeasence or any other reason. My statement was an "alternate history" based only upon the idea that he was a weasel, and without a golden-parachute pension and other rewards for selling out Chrysler, he might not have achieved his dream home in Naples, FL (the latter happened in real life).

You may recall in other mentions of Eaton, I have him slipping off the dock, into the gulf and being eaton by aligators. This is more a "fantasy" than alternate history.

 

[BIGBARNEYCARS]

Just let me point out that Eaton was never fired from GM, for financial malfeasence or any other reason. My statement was an "alternate history" based only upon the idea that he was a weasel, and without a golden-parachute pension and other rewards for selling out Chrysler, he might not have achieved his dream home in Naples, FL (the latter happened in real life).

You may recall in other mentions of Eaton, I have him slipping off the dock, into the gulf and being eaton by aligators. This is more a "fantasy" than alternate history.

I understand Carmine. I have to believe some how his reputation would have proceeded him on his move to the Pentastar in the sky? At least we agree that at some point in the future serpent will be judged