The 1956 Packard Caribbean was Packard’s post war high water mark. It was state of the art, it could compete with
Cadillac, Lincoln and Chrysler at all levels – but it arrived three years too late to save the brand.
More on Packard’s Demise
One of the things that has been a constant, even today, is that luxury brands seem to survive bad decisions, poor marketing, and a screwed up dealer network. The rationale is that the profit margin and the cache of the brand is such that someone will either swoop in and rescue the current company or it will be reconstituted in a merger.
There are only two times in our auto history that this did not happen was in the period of the the great depression of 1929-33 and the mid 1950s. One can understand the Depression, after all everyone took a huge financial hit in those years, businesses and all levels of people, from Joe worker to Fred wealthy. In the 50s, another thing happened, and that was something that is still a bit hazy. The car markets consolidated – and in that, many marginal brands either merged or disappeared.
That’s certainly understandable where a manufacturer needs volume to make a profit: Kaiser and Frazer, Willys, and even Hudson were all victims of this thinking. Manufacturing processes developed in World War Two allowed advances in production, not just on the assembly line but even more so in the supply chain. Unlike before the War, one couldn’t rely on outside suppliers for many things; bodies, transmissions, etc. This was due, for the most part, to profit margins, delivery of product, and the many many model running changes fostered by the General Motors megalith that created a demand for newer, faster, sexier, and with more and more features.
How did any of this affect Packard, and what circumstances lead the brand to disappear is both interesting and sad. Let’s take a look . . .
In the luxury field, profit per unit was usually high enough to bypass these issues. For Example, Rolls Royce and Ferrari didn’t need to build thousands of cars or change models to remain in business – in fact, they could build each car by hand and still retain profitability. But here in the states, luxury cars were, unfortunately, viewed as just a top-of-the-line offering from the manufacturer. Sure, there were smaller companies that delivered “custom” cars in very niche markets – take Cunningham, for example. But even these makers found that the big companies could push them out, even with small numbers – Corvette, basically made Cunningham redundant.
In almost the same vein, the ability of the Big Three; Chrysler, Ford, and General Motors to produce niche market cars – primarily in in the luxury brands, was the thing that started Packard down the road to oblivion. Cadillac delivered the Eldorado, Chrysler the 300, and Ford the Lincoln Continental.
This issue of delivering high-quality cars using a greater and more flexible supply chain and at lower per unit cost was the dilemma facing Packard in 1946, though not clearly. They had survived the Depression by doing two things: delivering very high-end luxury cars and a mid-price car with the image of Packard quality. When World War Two arrived, their expertise in doing so won them the Packard-Merlin aircraft engine contract and that put plenty of cash in their coffers.
Packard thought that this formula – a high end car and a solid mid-price car would sustain them. In one respect, the quality mid-price car, they were right, in the other, that low volume almost custom-built high end cars would find the same level of buyers that the pre-WW II era had delivered.
But a few things were happening after WW II. The first was that the manufacturing processes developed in World War Two allowed for the creation of large quantity of quality products that could rival those made in the old hand-made shops – and in some cases, they could surpass it. The second was that the economy generated both from the War and the period thereafter upped the demand for luxury brands and custom-built be damned.
This was the stage upon which Packard stepped in 1948. But first the period 1946-47.
The first postwar Packards arrived in October 1945. Like pre-War Packards, they were built to the same high standards held by the manufacturer since its inception in 1899. At war’s end, America just wanted new wheels, so the fact that these Packards were warmed-over 1942 models had little effect on sales. Returning from wartime materials production to automobile manufacturing resulted in only about 31,000 of these 1946 cars being sold. Since all other car makers were in the same boat, Packard was able to keep-up with their competitors.
For 1947, the Packard line was changed little, but already they began to lose ground to the other manufacturers in reacting to new trends. This issue was not a serious problem yet, but the foreshadowing of this had already surfaced in the more modern offerings from smaller companies like Studebaker and Kaiser-Frazer. Luckily, the company’s major rivals, Cadillac, Lincoln and Chrysler, were also selling rehashed 1942 models.
But the next year, 1948 was the beginning a different ballgame. It was in that year that Cadillac delivered much more sweeping styling and introduced their famous and brand-defining P-38 fighter plane type tail fins. Packard had anticipated new sheet metal would be required post war. They countered with a new look, called “pontoon styling” but it was much more conservative than GM’s offerings. It all new and it was praised and honored by a number of internationally respected design organizations, and resulted in the 1948 models selling 99,000 cars and 105,000 the following year.
Toward the end of 1949 three things began to impact Packard. First, output by all manufacturers was at full-swing, capable of satisfying the demand for new cars. Second, the Big Three all had new and much more modern styling. General Motors’ new hardtop coupes were way ahead of the curve and the fashion hit of the season. Last Packard’s weakness began to show in engineering advances and stodgy styling. Though the slab-sided 1948-1950 cars were labeled with new, “Twenty-Third Series” nomenclature, by 1950 they were considered archaic in styling. More importantly, Packard had known of the need for a more modern powerplant in 1946. However, they proceeded at a snails pace to develop it,fussing and debating over minor details that did not enhance the design. They also argued over how to integrate the engine into current tooling, and even proposed to offer the ancient I-8 as an alternative to buyers!
By 1951, not having an answer for the modern overhead valve V-8 engines coming on stream, buyers,even the former conservative club who were Packard’s base, began viewing Packard as an old-fashioned. Management still thought that quality was more significant than performance or modern looks continued to neglect the need for change or to press for the new motor.
In 1951, Packard came out with a completely new car, but still featuring the huge, heavy straight eight L-head engine from 1930. The ’51 model had all new sheet metal and trim, a new frame, updated interior styling, and even added the handsome “Mayfair” hardtop coupe. One of the saving graces was that Packard touted their “Ultramatic”, automatic transmission which had been standard on the Custom Eights of 1949 and available on all 1950 Packards. The new sheet metal and an emphasis on their transmission technology did result an increase in sales, up 115 percent over 1950. This should have sent the message to Packard management what they needed to do from then on. But tooling costs, profits from lower sales volumes just would not allow the massive changes needed. Despite a smart re-tweaking of the 1951 design in 1953 and 1954, Packards remained virtually unchanged in the eyes of the potential buyer.
But dropping sales figures did not send a clear signal until 1954. Though Packard went from the 16th largest producer in 1951 (76,000+ cars) it achieved the 14th rank and by sold 81,000+ cars for 1953. Sounds good, except they were passing already failed brands and falling behind in market percent as compared to other luxury brands. Worse, after WW II, Packard had planned for major growth and built a plant that was designed to produce 250,000 – 300,00 cars annually. Recovering the cost of that plant build and paying for the 1951 restyle tooling was sapping what ever cash reserves they had. At least 100,000 cars was projected for 1954 – and their hop for saving the Company.
But the worst intervened. A general market downturn hit after the end of the Korean War. When the numbers were in, Packard’s 1954 sales were only 27,593 units, not enough to be profitable. This was compounded by the costs for the new body shell, and the new V-8 engine tooling (finally) to be released in 1956.
But facing buyer apathy, Packard rushed to offer a new a body shell and finally OHV V-8 power and very advanced torsion bar front suspension for 1955. Colors went from bland two tones to splashy three-tone colors, new crisp front fascias and fashionable hooded headlights, wrap-around windshields, a hint of tail fins. Finally a lower-priced Clipper line was offered to compete with DeSoto, Mercury, and Oldsmobile. The rush also affected product quality, and Packard slowed the assembly to handle the issue, stalling the badly need car deliveries to their dealerships.
The cars were now current in styling and engineering – and the change brought immediate benefits, the new Packards drew rave reviews and 1955 Model sales climbed to 55,000 cars, but for Packard to recover, the that number needed to be 50% more. Packard was now over-extended in cash flow.
In the background was a strange plan by the Board to force the Company to deliver an economy or smaller car to raise volume. Bowing to that, management pushed through a plan to buy Studebaker. (Packard thought they would have access to Mercedes Benz engineering, something Studebaker touted, but had had no contact to use that service).
That purchase plan was so rushed and badly managed that in essence, they ended up merging. At the last minute Packard realized that they would not be able to quickly produce a smaller Studebaker car using old Packard Clipper designs and would not be able to produce Studebaker vehicles at their Detroit plant. They would be stuck making those cars in South Bend, not solving the plant capacity or other supply chain issues. And Studebaker was even more over-extended than Packard and South Bend actually pulled the barely solvent Packard toward its grave.
Another recession impacted all luxury brands in 1956 and Packard’s wonderful new cars were not leaving the showrooms. Sales dropped to 28,835 cars effectively finishing the new Studebaker-Packard Company. In an agonizing and embarrassing finale, the Curtiss-Wright Corporation acquired Studebaker-Packard as a tax write-off. They quickly decided to consolidate the car lines and manufacturing at Studebaker’s South Bend, Indiana facilities.
For the next two years, the Packard became a badge-engineered car, built on the Studebaker platform. Though a solid automobile, this new Packard appealed to neither their former luxury buyers nor to traditional Studebaker purchasers. And adapting the Studebaker chassis to a rushed redesign to try to appear as a different car came off as slap-dash. Judged against the 1957-58 Chryslers, Cadillacs and Lincolns, it looked cheap and ill-conceived. Buyers sad “No”, resulting in 7,500 vehicles sold in the last two years. After 1958, the name Packard disappeared from the US automotive market.