In 1943, Packard leased a government-owned manufacturing plant located on the outskirts of Toledo, Ohio. The plant was previously operated by the defunct Aviation Corporation. Packard used the leased plant to manufacture parts for the Rolls-Royce Merlin engine, and referred to it as its Toledo Division. In the early-summer of 1944, the Army Air Force Material Command contracted with Packard to carry out "advanced aircraft engine development" on both the Merlin and gas-turbine engines. To oversee the new project, Packard hired Allison Engine Company's Robert M. Williams as their chief design engineer at the Toledo facility in July of that year. In early 1945 the Power Plant Lab at Wright Field asked Packard to take on a research project to develop an expendable jet engine of 4,000 pounds thrust weighing no more than 1,000 pounds. Design work for the engine designated as the Packard XJ41 began in May 1945.
After studying existing turbojet engines it was decided to design an engine which would be a significant advancement over conventional turbo-jet engines, have a low manufacturing cost, minimum use of strategic materials and be a light-weight design.
The Packard XJ41 met those requirements with a combination of a mixed flow compressor, a light weight annular combustion chamber and hollow turbine blades for both rotor and stator. The engine's most outstanding design characteristic was the use of an air inlet that operated at supersonic speed that produced more thrust per pound of weight than designs using low velocity inlet air. The XJ41 weighed 1,100 pounds and produced 4,000 pounds of thrust, where the GE J33 weighed 1,820 pounds at the same thrust. The engine was completed and operating on a test stand on January 8, 1946.
Serial numbers V-500001 to V-500007 were allocated indicating that at least seven engines were built. Development continued on the engine over three years, with Packard assiging model numbers PT-103 and PT-104 to military engine designations XJ41 serial number V-500001 and XJ41 serial number V-500003. A design study for an engine suitable for high acceleration, such as a catapult launched take-off, was assigned model number PT-106 in February 1947. Between September 1947 and July 1948 an XJ41 engine attached to a North American B-25J Mitchell bomber was flight-tested several times.
Development of the XJ41 stopped when Packard engineers came up with a radical redesign that differed so much that military model XJ49 was assigned. All work on the earlier design was terminated and funding was transferred to the new design.