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PACCAR Inc

HistoryLink.org Essay 4272 : Printer-Friendly Format

PACCAR Inc is an international truck manufacturing firm based in the Pacific Northwest, best known for heavy-duty trucks sold under the names Kenworth, Peterbilt, DAF, and Foden. The firm also manufactures light- and medium-duty trucks, and parts and winches, and has been known as a technology innovator from the beginning (in Seattle, 1905) as a manufacturer of steel and of log-transport equipment. PACCAR, with headquarters in Bellevue, is the legacy of William Pigott (1860-1929) and his descendants. From its earliest days as Seattle Car and Foundry, this company has contributed significantly to employment and civic life throughout the Puget Sound region. The company’s presence has been especially strong in Renton, where it remains the oldest continually operating business.

Wheels For Logs

William Pigott, founder of the family dynasty that would become PACCAR, came to Seattle in 1895. He was an experienced pig iron salesman and had already been co-owner of a steel rolling company in Colorado. He saw Seattle as a potential steel town much like Pittsburgh, and to that end in 1905 he opened Railway Steel and Supply Company.

Railway Steel and Supply Company manufactured horse- or oxen-drawn logging trucks -- sets of wheels to be placed under each end of a log -- built specifically to address the dense, hilly forests in which the Northwest logging industry operated and to transport massive logs. The firm also manufactured structural steel, finished by hand, creating "the columns and girders (that) went into many a Seattle landmark building" (Groner, 17).

Around the same time the company became the exclusive Pacific Northwest representative for Climax logging locomotives. Low-speed Climaxes were designed for operation on the uneven rail beds and steep grades typical of logging railroads. Since Railway Steel sold rails, the two businesses dovetailed.

Pigott Goes Into Pig Iron

William Pigott’s next expansion was into pig iron manufacture. Pig iron is the first stage of steel and is cast in blocks in a blast furnace. A blast furnace requires coke (a concentrated-carbon fuel manufactured from bituminous coal) to generate high heat. Pig iron can be forged, or melted and cast at a foundry. Various groups of businessmen had moved to extract iron ore deposits in the Pacific Northwest and to smelt this ore locally using coke from area coal mines. Although the price for local coke was relatively high due to the difficulty of extracting coal from the vertical deposits, which were most prevalent, the investors hoped that availability of the amount of hot-burning coke needed, plus a steady demand to smelt iron, would force prices low enough to make the venture profitable.

Pigott and his friend Judge E. M. Wilson incorporated the Seattle Steel Company on November 23, 1903. They built their facility on 55 acres of Duwamish tide flats. In time Seattle Steel became a major employer in the region. In 1917 Seattle Steel became the first steel mill in the United States to adopt an eight-hour day. Its plants operated by electricity, leading the nation in this respect.

In early 1904 Pigott foresaw yet another market waiting to be created and with Frank E. Warman opened the North Coast Dry Kiln and Truck Company. The kilns they made were sold to the lumber industry. They were used to dry shingles and lumber. Orders were immediate and plentiful, and the business boomed.

Seattle Car Manufacturing Co.

In February 1905 William Pigott established Seattle Car Manufacturing Company. Seattle Car absorbed Railway Steel and Supply. Seattle Car manufactured heavy duty railcars for transporting huge logs out of the woods using the many logging railroads that penetrated the forests of the Pacific Northwest. Seattle Car grew quickly, despite a fire on August 12, 1907, that destroyed the Duwamish facility, and despite a 1907 bank panic that resulted in a string of cancelled orders. The company built a new factory in Renton and by 1909 was filling larger orders than ever before. In 1911 the name was changed to Seattle Car and Foundry Company.

On July 1, 1917, Seattle Car and Foundry merged with its only West Coast competitor, Twohy Brothers of Portland, Oregon, owned by Judge John Twohy and James F. Twohy. Major customers like the Union Pacific Railroad and the Southern Pacific Railroad had been splitting large orders between Twohy Brothers and Seattle Car and Foundry. The merger created a new company called the Pacific Car and Foundry Company. Pacific Car and Foundry, with no competitors, held a very strong position.

Pacific Car immediately secured orders for 2,000 steel boxcars from the United States Railway Administration, the agency that took over American railroads during World War I. After the war ended, Pacific Car diversified its efforts. Train cars remained crucial to its business, but it put increasing energy into manufacturing motor car trailers and steel casings.

By 1920, the company had built more than 7,000 logging cars (valued at some $10 million). The firm specialized in innovating designs that fit the particular hauling situation of the logging customer. Perhaps most importantly, Pacific Car and Foundry’s products incorporated important safety innovations: air brakes, and an open car design that reduced a worker’s risk of being crushed while loading the huge logs in an enclosed space. The company’s refrigerated boxcars facilitated safer food shipment. The company’s Universal Trailer, a two-wheeled trailer pulled by a motor truck, quickly became the industry standard.

Pacific Car had equipped the Portland shop to produce its refrigerated boxcars and to repair train cars on contract for major railroads. The Renton plant built a variety of train cars and motor trucks. Pacific Car’s high quality goods had developed a loyal customer base. Its commitment to fair labor negotiations and to taking good care of its workers meant a loyal work force.

Hard Times and A New Product

On March 31, 1924, Pacific Car and Foundry Company was purchased by the American Car and Foundry Company, which was at the time acquiring plants nationwide. James and Judge Twohy’s financial troubles and desire to get some of their cash out of the business prompted the sale. After a complicated series of negotiations and stock transfers, the sale was finalized. The reorganized company kept the same name, Pacific Car and Foundry. American Car named eight members to the 15-member board of directors.

As the country’s focus moved from railroads to motor transport, Pacific Car’s production lines shifted, too. Although it continued producing train cars it added steel bridge fabrication and motorbus construction to its specialties. Still, fiscal earnings declined each year from 1925-1929. In 1930, despite the stock market crash, earnings rose, but as the Great Depression deepened, Pacific Car and Foundry soon became one of Seattle’s most depressed businesses.

Despite employee layoffs, Pacific Car had one bright spot: Alex Finlayson, a metallurgist who had worked for the company as laboratory manager, foundry manager, and special engineer, developed a new kind of strong lightweight casting steel. The alloy was named Carcometal, and it generated sufficient income throughout the 1930s to pull the company through.

Carcometal had low carbon content and was higher in manganese, copper, and silicon. Twice as strong as basic steel, it worked well for annealed castings. It had a lot of elastic strength, and was light in weight. Pacific Car developed a line of tractor winches using Carcometal.

The Pigotts Return

In February 1934 William Pigott’s sons, William J. and Paul, and a small group of Seattle investors bought Pacific Car and Foundry back from American Car and Foundry for $50,000. American Car was relieved to be free of their holdings during so dark and difficult an economic period. The Pigott brothers, especially Paul, counted the sale as a personal family victory. Paul had worked in the business from boyhood and was never reconciled to its sale to American Car. William Pigott Sr. had died on July 19, 1929. He had chosen to forgo all shareholder meetings during the years the company he founded was owned by American Car and Foundry.

Paul Pigott was elected president of Pacific Car and Foundry, and his brother was elected vice president. Paul, like his father, felt strongly that as a person of economic privilege and ability he had a duty to provide work to as many willing Seattleites as possible. "I think I should furnish employment," he said, "to the extent that I can" (quoted in Groner, 95).

In the Renton community surrounding the plant, Pacific Car was a main hub of family life. Pigott tightened the company’s belt as was fitting considering the almost complete lack of orders, and retooled. His plan was to make the company healthy again by building a top quality workforce, repairing and updating the run-down plant, and diversifying the product line.

By the late 1930s Pacific Car had government contracts for steel fabrication for what would become the Lacey V. Murrow Lake Washington Floating Bridge (the first I-90 bridge across Lake Washington), and for the Grand Coulee Dam, Bonneville Dam, La Grande Dam, and Ross Dam. This in turn catalyzed new orders from private clients like Boeing, which was building plants in Renton and in Seattle. The Motor Coach Division assembled buses and trackless trolleys for the City of Seattle.

War Years

As the country geared up for World War II, Pacific Car and Foundry’s fortunes improved. In 1940, company sales were up by nearly 50 percent. Logging equipment, steel for airplanes, airports, bridges, the Navy, highways, and refrigerated boxcars emerged from the Renton factory and helped build America’s infrastructure to support the war effort. Pacific Car also sub-contracted for Boeing, building aluminum wingspans for B-17 bombers.

Beginning in spring 1942 the company also built Sherman M4-A1 tanks for the U.S. Army. Its first effort received high praise from the Army. Pacific Car was able to cast almost all the parts for the tanks at its own foundry. A modified version of Carcometal was used to make cast armor for the tanks. The government constructed a new, modern foundry in Renton so that Pacific Car could increase its output. A transformer substation powered the electric steel furnace.

Ships and Kenworth Trucks

In 1942, Paul and William Pigott started Everett Pacific Shipbuilding and Dry Dock Company. Pacific Car and Foundry bought the business in 1944. The ships and other marine products were built at a Navy facility in Port Gardner Bay in Everett. In 1946, it became a division of Pacific Car.

In 1945 Pacific Car purchased the Kenworth Motor Truck Corporation. Kenworth had been producing trucks in Seattle since its incorporation in 1923. Like Pacific Car, Kenworth’s corporate culture stressed high quality and innovative design features. During World War II Kenworth produced airplane assemblies and subassemblies for the United States military, as well as trucks. As the war drew to a close Kenworth’s engineers shifted their attention to commercial trucks for the postwar market.

After World War II ended Pacific Car continued to receive numerous government defense contracts. They were part of the federal government’s Mobilization Planning Program, which meant that it promised to devote 100 percent of its facilities to military production in the event of a national emergency. The company was a prime contractor during the Korean conflict, producing T-97 and T-108 tanks. Pacific Car chose to subcontract many of the necessary parts, boosting smaller businesses throughout the state.

On the Road

By late 1953, as Alex Groner summarizes it, the firm's activities were as follows:

"In addition to the work on military contracts [Pacific Car] was the leading builder of refrigerated and insulated railroad cars; it manufactured tractor winches, arches, and cranes, and fabricated bulldozer equipment, rigging for wire rope, and steel light poles; it produced forgings, castings, weldments, steel fabrications, and machined items on a commercial job order basis; it operated a machine repair and construction facility; and its Structural Steel Division was engaged in steel fabrication and erection of everything from small retail stores to bridges, hangars, dams, complete factories, and a five-story addition to a department store" (Groner, 149).
Kenworth, which opened a Canadian division in 1956, was Pacific Car’s largest, fastest growing concern.

In 1958, Pacific Car acquired the Dart Truck Company of Kansas City, Missouri, and the Peterbilt Motors Company, of Oakland, California. Dart built primarily heavy off-highway dump trucks and specialty vehicles. Peterbilt had been a major competitor with Kenworth, producing many kinds of trucks and buses. From June 24, 1958 until late 1960 Peterbilt operated as Pacific Car’s wholly owned subsidiary. It was then dissolved and made a division of Pacific Car.

In the autumn of 1960 Paul Pigott was diagnosed with a brain tumor. He died on January 23, 1961. Charles Pigott, Paul's son, was appointed to Pacific Car’s board of directors. Robert O’Brien, formerly the executive vice-president, became president. O’Brien had been with the company since 1943 and Paul Pigott had groomed him for the presidency. In June 1965 Charles Pigott succeeded him as president of Pacific Car.

Building With Steel

Pacific Car’s structural steel division made the steel used to build Seattle’s Space Needle in 1961, and to build the 50-story Seattle-First National Bank headquarters (dedicated in 1969).

The firm provided 5,668 steel panels, weighing 58,000 tons, which formed a major part of the bearing walls for New York City's World Trade Center twin towers. The World Trade Center, like the Sea-First building, bore the building’s load on the exterior walls rather than on an interior structural skeleton. The steel panels were shipped by rail from Seattle to New York City on more than 1,600 railcars. Pacific Car was the largest contractor of the 13 steel fabricators that provided steel for the World Trade Center towers.

On January 25, 1972, Pacific Car and Foundry Company changed its name to PACCAR Inc. In 1973, PACCAR closed its structural steel business.

Keep On Truckin'

PACCAR’s customized trucks, built both by Peterbilt and Kenworth, continued to generate increasing sales throughout the 1970s despite a serious slowdown during the 1974-1975 national recession. PACCAR continued to gain momentum as a global concern.

In 1973, PACCAR purchased the Wagner Mining Equipment Company, which built underground mining vehicles. In 1975, it bought the International Car Company of Kenton, Ohio, a caboose manufacturer. In 1980 they acquired Fodens Limited, a British company and one of the oldest truck producers in the world.

In 1972 PACCAR formed PACCAR International, which promoted company exports. In August 1978, PACCAR received an order from the People's Republic of China worth $3 million for 22 Kenworth trucks. This came four months before diplomatic ties were established between China and the United States.

PACCAR kept its plants outfitted with modern equipment and stayed at the forefront of new technology. As computer systems to monitor inventory and assist managers came into being, PACCAR was quick to install them. In 1980, the firm began construction of a Technical Center in Skagit County. The center was designed as a truck research and testing facility. The facility includes an environmental dynamometer, a ride simulator, a failure analysis laboratory, and high-speed computers for analyzing the durability of truck parts.

In 1980 the federal government passed the Motor Carrier Act deregulating the trucking industry. PACCAR’s trucks came with the best warranty in the industry, and many trucking firms refurbishing their fleets with more efficient vehicles turned to PACCAR. In 1984 PACCAR posted record sales: $2.25 billion, $125 million of which were profits.

PACCAR sold the Dart Truck Company in 1984. In 1988 the firm closed its oldest business, Pacific Car and Foundry. The factory in Renton had operated for 80 years, but by the late 1980s there was insufficient call for rail cars or heavy military vehicles. In 1989, PACCAR sold Wagner Mining Equipment Company. These sales were consistent with the company’s history of forecasting and responding to industry trends in order to remain profitable.

In 1987 and 1988, respectively, PACCAR acquired Al’s Auto Supply and Grand Auto Incorporated. The auto parts business is not as volatile during times of recession as are PACCAR’s other concerns. Entry into this market gave the company greater ability to weather periods of national economic downturn.

PACCAR’s Winch Division, which had virtually saved the company during the Great Depression, continued to grow as PACCAR acquired other winch companies. By 1994 the Winch Division was the world’s largest manufacturer of industrial winches.

A Sophisticated, Multi-faceted Firm

During the 1990s PACCAR focused on communication and management systems for its truck dealers and owner/operators. PACCAR’s Dealer Management Consulting offered consultation services for "dealership management and operations, financial and insurance planning, human resources, and computer systems management" (Groner, 247). The firm's Driver Board and Dealer Councils allowed Kenworth and Peterbilt drivers and dealers to share feedback with PACCAR. PACCAR’s response was improved design features and the yield was greater product quality. Improving computer technology also helped in this pursuit.

In 1992, PACCAR’s Parts Division opened a new headquarters building in Renton. The building occupied part of the company’s historic Pacific Car and Foundry site.

The 1990s were also an important growth period for PACCAR Financial Corporation, which offered in-house financing for Kenworth and Peterbilt at excellent rates, and for PACCAR’s Leasing Corporation, which became one of the 10 largest full-service leasing companies in North America. By 1995 PACCAR International marketed trucks in more than 40 countries, and was one of the largest exporters of capital goods in North America.

During the early 1990s PACCAR voluntarily performed environmental cleanup on its old Pacific Car and Foundry site in Renton. The Environmental Protection Agency had identified the location as a superfund site, primarily because of its proximity to the Cedar River (about 1,700 feet from the site). PACCAR’s preemptive cleanup paved the way for its construction of a new Kenworth truck factory on the site. This factory opened on June 4, 1993.

Charles Pigott retired in 1997. His son Mark assumed PACCAR’s presidency.

PACCAR’s pursuit of quality over nearly a century of operations has made it a business leader in the Pacific Northwest and a major industry player throughout the world. Its corporate ethic cannot be divorced from that of founder William Pigott and his son Paul, grandson Charles, and great-grandson Mark. "We want to be able to look people right in the eye and say we did it squarely, ethically, and to the best of our ability, and these are the results. That’s exciting. They don’t teach you that in business school" (Mark Pigott, quoted in Groner, 260).

Sources:
Alex Groner, PACCAR: The Pursuit of Quality, Second Edition (Woodinville, WA: Documentary Book Publishing, 1996); Doug Siefkes, Kenworth: The First 75 Years (Seattle: Documentary Book Publishing, 1998); Kenworth website (www.kenworth.com/7100_ken.asp); Tony Dondero, "Renton Chamber to Honor PACCAR," King County Journal (www.kingcountyjournal.com/sited/story/html/58294); PACCAR website accessed January 21, 2004 (www.paccar.com/history.asp).
Note: This file was corrected on February 4, 2005.


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This essay made possible by:
PACCAR Inc


PACCAR's Kenworth T2000
Courtesy PACCAR Inc


Seattle Car Manufacturing Co. workers pose with a logging truck, ca. 1910
Courtesy PACCAR Inc


William Pigott (1860-1929), ca. 1920
Courtesy PACCAR Inc


Rolling mill, Pacific Coast Steel Co., Youngstown (West Seattle), 1914
Photo by Asahel Curtis, Courtesy MOHAI (Neg. No. 28819)


Pacific Coast Steel Co. open hearth furnace, Youngstown (West Seattle), 1914
Courtesy Bethlehem Steel, Co.


Pacific Car and Foundry Co. manufactured 926 M-4 Sherman Tanks for the U.S. Army during World War II, 1942
Courtesy PACCAR Inc


Paul Pigott (1900-1961), ca. 1950
Courtesy Stanford University


First Lady Eleanor Roosevelt (1884-1962) and Paul Pigott (1900-1961) at World War II bond rally, Renton, ca. 1944
Courtesy PACCAR Inc


PACCAR's Kenworth T800
Courtesy PACCAR Inc


 
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