Gas for Packard

When James J. Nance quit the presidency of Hotpoint Co. (appliances) to take over Packard Motor Car Co. eleven months ago, his old employers gave him a notable vote of confidence. Hotpoint's parent company, General Electric, bought 25,000 shares of Packard for its retirement fund. This week Jim Nance, 52, proved that the confidence was well deserved. Packard's first-quarter profit of $10 million before taxes was better than in any other three-month period in the company's history. On sales of $123 million, Packard netted $3,510,062, almost triple the figure for a year ago.

To boost the profits, Nance has turned Packard upside down. When he took over, Packard had several things to its credit: a solid cash position, a restyled car, and one of the best engineering divisions in the auto industry. But dealers were overloaded with cars, sales were slow, and the payroll was heavy with deadwood.

Nance's first move was to start a retirement plan which would 1) attract good executives to Packard, and 2) enable the old ones who couldn't keep up with the Nance pace to be pensioned off. In the plan's first month of operation, 400 supervisory employees were put out to pasture. Nance set about filling the vacancies with younger men from Packard's own ranks, from other auto companies or Hotpoint, and set them all to work cutting production costs. Then he toured the U.S. giving dealers pep talks and listening to their complaints. He weeded out 200 weak dealerships and added 400 new ones (present total: 1,685). One of Packard's troubles, Nance found, was that dealers didn't know just what market they were after. Nance set them straight: while continuing to sell some medium-priced cars, the long-range goal was to re-establish Packard as the No. 1 quality car in the U.S. In line with this goal, Nance stepped up output of his costliest models from 3 1/2% of production to 15%, is aiming for 35%. This week he showed off his newest luxury line of eight-passenger sedans. Price: $7,095.

To help the dealers sell all the cars he could make, he boosted the ad budget from $5,000,000 to $8,000,000, set his 1953 production goal at 120,000 cars, v. 62,988 last year. This week Nance reported he was right on schedule, with 30,378 units produced in the first quarter.

But Nance had a word of warning-for other automakers as well as Packard.

Said he: "The auto industry is currently producing at a rate of 7,000,000 units a year while the latest registration figures show that dealers are selling at a rate of 5 1/2 million units . . . The auto industry must get back into the business of selling.'' Some makes, said Nance, are already backing up in dealers' showrooms, but not Packard. Three months ago, Packard inventories averaged eleven cars per dealer, now they are down to six. Says Jim Nance: "We've got a long way to go, but we've made some real progress."

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