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| The People's Packard: The Packard One-Twenty and How NOT to Build a Brand |
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| Written by Aaron Severson |
| Monday, 25 August 2008 00:20 |
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The bread and butter of most modern luxury car companies is their "near-luxury" models, moderately priced (but still expensive) cars aimed at buyers who are enticed by the badge, but can't afford the company's "full" luxury cars. It's big business today, but it's not a new idea. Back in the mid-thirties, beleaguered Packard jumped into the mid-priced fray with its affordable One Twenty -- the car that saved Packard, and set the stage for its demise. BRAND BUILDINGLet's talk a little about branding. The terminology is relatively new, but the idea is not: building the image and reputation of a trade name to the point where buyers will seek it out and even pay a premium for it. Successful brands are considered the holy grail of modern business, and billions of dollars are invested every year to try to create and maintain that success.
Creating successful brands is challenging, and, contrary to the ambitious dreams of many a marketing goon, they rare emerge from a vacuum. Most brands begin with a successful product, whose aura is painstakingly extended ("leveraged") onto other products. The tricky bit is that a given brand will only stretch so far. Attach a snobbish name to too much tacky crap, and its snob appeal will begin to erode. It's a risky endeavor, but sometimes it's necessary if a business is to survive. That is precisely the dilemma faced by the Packard Motor Car Company in the early 1930s. Packard had been incorporated in 1902, but it was not until Alvan Macauley became president in 1916 that they had found their métier. The company already had a reputation for high-quality cars, but Macauley declared that the Packard would be "a gentleman's car built by gentlemen." By the end of the 1920s, Packard had established itself as the most prestigious car made in America. True, Duesenberg was more expensive, and offered greater performance, but Duesenbergs had a little too much flash, a faintly vulgar air that smelled too strongly of the arriviste. A Packard bespoke class; it said old money.  An 11th Series (1934) Packard Twelve five-passenger coupe shows off Packard's typically sober lines. The company's design director during this period was Ed Macauley, son of president and chairman Alvan Macauley, but the look of Packard's cars was set by chief stylist Werner Gubitz. It's a big car -- nearly 5,800 lb (2,625 kg) at the curb -- and it was quite expensive, as well. Its starting price in 1934 was $3,990, the equivalent of about $65,000 today. DOWNSHIFTINGBy the early 1930s, not enough of that old money was being spread around to keep Packard solvent. First, Cadillac had trumped Packard with not only a V-12 of its own, but also a spectacular V-16. Second, the effects of the Crash and the onset of the Depression had cut sharply into sales for all ultra-luxury cars. The belated reintroduction of the Packard Twin Six didn't help; in 1932 alone, Packard lost $7 million, the equivalent of $108 million in 2008. Packard was relatively small, and it could not endure such losses for long.
As this crisis unfolded, Alvan Macauley brought in new blood. Max Gilman, formerly president of Packard's New York distributor, became president of distribution in 1932, and general manager in 1934. Gilman was from Brooklyn, gruff, ruthless, and tough talking, the diametric opposite of the genteel, patrician Macauley. Gilman would serve as Macauley's right-hand man in the boldest and most aggressive move Packard had ever made.  From the front, the One-Twenty is just as imposing as were its larger brothers. This 1936 model has the new, 282 cu. in. (4.6 L) straight-eight, with 120 horsepower (90 kW), which gave impressive performance for its era -- 0-60 mph (0-97 kph) in under 17 seconds, a top speed of around 85 mph (137 kph). Unfortunately, some of that sparkling acceleration was achieved through very short gearing, and Packard didn't offer overdrive (which it could definitely have used) until 1939. Gilman and Macauley believed that if Packard were to survive, it would need to move aggressively down-market, offering a cheaper model that could sell in greater volume. Packard had already tried that with the 1932 Light Eight, with mixed results. Although it was a lovely car, the Light Eight was too expensive to sell in great volume, but not expensive enough to be profitable; to survive, Packard would need to go cheaper still. Gilman and Macauley saw a vast potential market in the middle-class sector then dominated by Buick, Hudson, and eight-cylinder Oldsmobiles and Pontiacs. If they could offer a car in the $850-$900 range, carrying the vaunted Packard name, Gilman thought they could sell 70,000 of them a year -- a healthy increase on even the company's pre-Crash volume. A NEW APPROACHBuilding such a car represented a great challenge for Packard. Its traditional products were assembled in an almost leisurely fashion, with a lot of painstaking hand labor. That 'gentlemanly' approach helped Packard maintain its reputation of quality, but it also contributed to very high prices. Profitably building a car less than half as expensive, in far greater volume, was alien to Packard's experience. To rectify that, Macauley and Gilman hired George Thomas Christopher, a General Motors veteran who had recently been vice president of manufacturing at Buick, to become Packard's new production manager. Christopher was soon joined by a host of other new engineers, drawn largely from GM, tasked with developing more economical production processes.
By mid-1934, Christopher had determined that there was no way to produce the new car on the same lines as the "senior" Packards without hopelessly compromising both. Packard instead invested in an extensive, multi-million-dollar revamp of its production facilities, setting up a cost-controlled assembly line for the new model. It was expensive, but it gave Packard the most modern factory in the business. The senior cars continued to be produced in the time-honored fashion, in what Packard staff carefully dubbed the "Main Plant."  Packard chief stylist Werner Gubitz did an effective job of scaling down the styling cues of the "senior" Packards (which had been updated for 1935) for the One-Twenty. It was a stylish car by the standards of the mid-1930s; it was perhaps a little too formal for some tastes, but that was in keeping with Packard's upper-crust image. Sadly, Packard styling would not keep pace with the times, and in the 1940s, its traditional design vocabulary meshed awkwardly with a half-hearted attempt at streamlining. To sell the new car, Macauley and Gilman hired Bill Packer from Chevrolet to become Manager of Sales. Packer was far more aggressive than most Packard salesmen had ever dreamed of being, and he had to educate the sales force in unfamiliar techniques like selling on time; the traditional Packard customer paid cash. Packer also took a distinct attitude towards advertising, with months of teaser ads that didn't even show the car (a technique Nissan's Infiniti division attempted, with very mixed results, for its 1990 Q45). THE ONE-TWENTYThe new small Packard -- dubbed One Twenty, based on its 120-inch (3,048mm) wheelbase -- was introduced to the public in January 1935, although it didn't reach full production until April of that year. It was a good deal smaller and half a ton lighter than the senior cars, powered by a new, 257 cu. in. (4.2 L) straight-eight engine. With 110 gross horsepower (82 kW), it had excellent performance for the time. The One Twenty was more mechanically sophisticated than the senior cars, as well, with a new independent front suspension and hydraulic brakes. More importantly, its materials and build quality showed little sign of Christopher's extensive cost cutting. The One Twenty was a well-trimmed car, with a solidity and attention to detail worthy of the Packard name.
 The One Twenty's stubby proportions make it look smaller than it really is. At a bit over 197 inches (5,010 mm) on a 120-inch (3,048 mm) wheelbase, it's bigger than a modern Toyota Camry, and weighs some 3,800 pounds (1,724 kg). The One Twenty ended up more expensive than originally planned, starting at $980, rather than $850. It was still cheap enough to undercut all but the cheapest Buicks, and it was more than $200 cheaper than LaSalle, its nearest direct competitor. The attractive price and the power of the Packard name were a potent combination. Despite its late introduction, Packard sold 24,995 copies in 1935, bringing total sales to nearly four times those of 1934. The 1936 model, which had a bigger, 282 cu. in. (4.6 L) engine with 120 horsepower (90 kW), sold even better, 55,042 units. The One Twenty was an expensive gambit, costing some $6.2 million, including the plant modernization, but it paid off, allowing Packard to post a $7 million profit for 1936. The number of dealerships had doubled in that time, and the company jumped from 17th place to 9th place in industry sales. PACKARD SIXAround the time the '36 models were going on sale in late 1935, Macauley and Gilman decided that if an upper-middle-class Packard were good, a middle-class model would be even better. The result was the 1937 Packard Six, which was essentially a shortened One Twenty, with its wheelbase trimmed from 120 inches (3,048 mm) to 115 (2,921 mm), powered by a 237 cu. in. (3.9 L) six with 100 horsepower (75 kW). Prices for the Six started at $795, which was well down into Oldsmobile and Nash territory.
Predictably, the Six sold even better than the One Twenty: some 65,400 units in its first year. It almost certainly stole some buyers from its bigger brother, but it resulted in record sales for Packard. The following year's recession knocked total Packard sales back down to 55,718, but that was still enough to make it Packard's third-best year ever. The Packard old guard had not been pleased with the One Twenty, and they were even less enamored of the Six. Nevertheless, it represented the wave of the future. In August 1936, Max Gilman announced that Packard was investing another $5.1 million in expanding its new production capabilities. In April 1939, Gilman's success was rewarded with a promotion to company president, although Macauley remained chairman of the board until March 1948. George Christopher replaced Gilman as president in 1942.  The One Twenty was available in eight body styles, the cheapest of which was this two-seat business coupe. (A business coupe was a two-door model with no rear seating and a large trunk, nominally intended for salesmen who needed to carry samples.) The business coupe cost $990 in 1936. The sport coupe, which cost $40 more, substituted a rumble seat, adding occasional seating for two more passengers. Note the canvas insert in the roof -- it would be a few more years before Packard adopted all-steel bodies like GM's "Turret Tops." DILUTION AND DECLINEUnfortunately, the success of the Six and the One Twenty would eventually give Packard a harsh lesson in the problems of expanding a brand too far beyond its original boundaries. The initial models sold like mad because they gave thousands of middle-class buyers a chance to brag that they drove a Packard, a privilege that previously had been limited to an elite few. Once the novelty had worn off, Packard had to compete on the same terms as everybody else. Packard's quality and performance helped, of course; the One-Twenty would probably have sold fairly well even without its badge cachet, because it was an excellent value for the money. By the forties, however, it was on its way to becoming just another middle-class independent.
The war was good for Packard, and lucrative military contracts made it the only independent automaker to emerge without debt after the war ended. Packard sales in the immediate postwar period were great, reaching an all-time high in 1949, but that was in a seller's market -- customers deprived of new cars for almost four years were snapping up everything they could get. When the frenzy ended, Packard started to flounder. Its elite cars were long gone -- the V-12 had vanished in 1939 -- and the senior models were almost indistinguishable from the junior series. Without the patrician models to bolster its image, Packard was just another small, mid-price automaker.  The distinctive hexagon emblem on the hubcaps had been a Packard trademark since 1905, the red hexagon since 1913. The One-Twenty was the first Packard with hydraulic brakes and independent front suspension. The latter was called "Safe-T-fleX," and it used one lateral link and one leading link per side, with Delco lever-action shock absorbers that doubled as upper control arms. Front suspension was by coil springs, although the rear continued to use parallel leaf springs. Senior Packards did not receive independent front suspension or hydraulic brakes until 1937. George Christopher, who had succeeded Gilman as president in April 1942, announced bold plans to increase production to 200,000 units a year (almost double Packard's highest volume to date), but it would never happen. By the end of 1949, Christopher had been forced into retirement. His eventual replacement, James Nance, took steps to distinguish the senior cars, introduce new styling, and bring Packard's technology into line with its rivals, but it was too little, too late. Taking over Studebaker in October 1954 only brought more losses. After two final, ignominious years as a badge-engineered Studebaker, the venerable brand was retired. OBJECT LESSONSThe One Twenty stands as an interesting object lesson on the pros and cons of brand expansion. If Packard hadn't introduced the junior cars, the company wouldn't have survived the 1930s. Packard's chief rivals, Cadillac and Lincoln, followed a similar course with their Series Sixty and Zephyr, which did neither any harm (although Cadillac's down-market ambitions did eventually consume LaSalle, its "near-luxury" companion make). Furthermore, the One Twenty hardly brought dishonor to its badge, since it was a desirable, high-quality product.
 In 1940, the Six was renamed One-Ten, while the senior models became the One-Sixty and One-Eighty. The One-Ten still used the 245 cid (4.0 L) six, with 100 horsepower (75 kW). What may have undone Packard was that the One Twenty was a little too good. Other than size and price, it gave away little in comparison to the senior cars. As the company focused on the "junior" makes, the senior series languished. In short, rather than expanding the brand, Macauley, Gilman, and Christopher had only succeeded in redefining it. That in itself was no small feat, but it landed Packard in the midst of one of the most brutally competitive segments of the market, where they were ill equipped to compete. Packard is long gone now, but the managers of BMW, Mercedes, and Audi would do well to study its lessons. All three German "premium" brands have been invading the mid-price D-segment for several years. In Europe, in particular, sales of mid-size family sedans have slumped as buyers opt for the cachet of a minimally equipped, four-cylinder 3-series or A4 than a well-equipped but more plebeian Ford or Opel. Meanwhile, models like the 1-series, A3, and A-class have gone after even the C-segment, compact market. These aggressive moves have done wonders for the German elite's sales volume and profits, but how long can they maintain their snob appeal when every other family runabout on the road wears a roundel or a three-pointed star? If government regulations on average fuel economy and CO2 emissions make their big luxury sedans obsolete, the Germans may face the same harsh awakening that Packard did six decades ago. Henry Ford once said that you can't build a reputation on what you're going to do. By the same token, you can't ride forever on the coat tails of the things you've already done. In the automobile business, at least, brands are ultimately defined by their products, not their aspirations, and if those products start to fall short, no amount of marketing spin will save you. # # #
NOTES ON SOURCESOur sources for this article included James Arthur Ward, The Fall of the Packard Motor Car Company
 (Stanford, CA: Standford University Press, 1995); the Auto Editors of Consumer Guide, Encyclopedia of American Cars: Over 65 Years of Automotive History, (Lincolnwood, IL: Publications, International, 1996); Arch Brown, "1937 Packard 6: A Packard for $795," Special Interest Autos #67, January-February 1982; John F. Katz, "One-Twenty: Packard's Maligned Savior," Special Interest Autos #140, March-April 1994; Michael Lamm, "1932 Packard Light 8," Special Interest Autos #22, May-June 1974; and Michael G. H. Scott, "Style and Substance: 1935 Packard Eight," Special Interest Autos #166 (July-August 1998), all of which are are reprinted in Terry Ehrich, ed., The Hemmings Motor News Book of Packards (Hemmings Motor News Collector-Car Books) (Bennington, VT: Hemmings Motor News 2001); and Burt Weaver, "DriveReport: 1941 Packard 6," Special Interest Autos #11, June-July 1972 (Vol. 3, No. 3), pp. 44-49.Our inflation estimates were based on the United States Bureau of Labor Statistics Inflation Calculator, http://data.bls.gov/cgi-bin/cpicalc.pl.
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Another great article! I miss Packard :(