Businesses could learn from Packard

In a celebration of automotive ingenuity tied to engineering integrity, came in the form of a tribute to The Packard Motor Car Company during a weekend gala in February. Packard's commitment to engineering integrity brought it unparalleled corporate success from 1899 to 1956. The Packard Museum attracts a national audience for this event, including Bostonian Charlie Wallace, who has four Packards.
In wandering through the museum with visitors such as Wallace, it is easy to get caught up in the Packard engineering prowess. According to Wallace, Packard's aircraft and marine engines helped win two world wars. For example, Packard made the engines for the PT 109, piloted by former President John F. Kennedy.
When the British needed help in producing thousands more of the Rolls Royce Merlin aircraft engines needed to fly the P51 Mustang, and the British Lancaster and Hurricane Bombers in World War II, Packard, a competitor of Rolls Royce, came to their rescue.
According to Robert Signom II, local attorney, avid Packard collector and founder of the Packard Museum, Rolls had initially approached Ford engineers. They said "the production quota can't be met, it can't be done." Packard engineers said, "We can do it, but it requires engineering changes."
Packard made 1,600 engineering changes, Signom said, with production lines rolling out the first engine in 90 days. Packard produced more than 55,000 of the "Packard" Merlin engines between 1941 and the end of the war; Rolls made only about 10,000.
Packard achieved a product development challenge that many of today's companies, with the help of computers, still couldn't meet. "We couldn't hold the approval meetings in 90 days," is a remark frequently heard when companies are introduced to lean product development, something that Packard was practicing in the 1940s.
But Packard forgot its vision of always building up to quality and never down to price, said Signom.
When the company lost its leader of more than 40 years, Alvan Macauley — a former Daytonian and patent attorney for John H. Patterson — Packard hired an accounting firm to tell it what to do. Without car guys in the lead, Packard followed a disastrous recommendation to parcel off the company. The bean-counters thought the company would be worth more if sold off or liquidated. What can we learn from the story of The Packard Motor Car Company?
Headlines rage about whether or not to stay in business and apply engineering integrity to develop products or to follow Wall Street recommendations and break companies into pieces to maximize the stock price.
A number of Wall Street analysts, for example, have pushed for a breakup of Hewlett Packard. In Business Week, they argued that "HP's pieces, from the dynamic printer division to the lagging computer businesses, would be worth far more apart."
Worth more on paper, that is. But we have to ask, "Do we form businesses to provide products for human need in the long haul, or do we form businesses to provide paper profits in the short term?"
Some executives are now asking that same question from jail. Human weakness can push the boundaries of ethics and law too far in the quest for short-term profits.
It's fun to walk the halls of America's Packard Museum with devotees like Wallace. It transports you to the romance of the Art Deco period. But it would be even more fun to visit a robust Packard Motor Car production line still turning out those exotic vehicles, illustrative of America's engineering ingenuity combined with integrity.
Let's hope American companies will remember the Packard story and remain true to what made America great — engineering integrity applied to make society and the world a better place.