Yes, Packard designed and built numerous aircraft engines before WWII. This is one of the many reasons they were known as “The Master Motor Builder.’

In 1917 Col. Jesse Vincent designed the Liberty engine for aircraft – this was a 1649 cu. In engine with 400HP. Packard built them and because of the war effort it was licensed and also built by Marmom, Ford and Buick. From 1917 to 1919 Detroit produced 20,478 of these engines.

By 1928 Packard developed the DR-980 diesel radial engine for aircraft. It was designed by Lionel Woolson and Herman Dohrner. Before the diesel engine you could not make a ground to aircraft radio transmission because of the interference caused by spark plug wires. Diesel engines do not have spark plugs so Packard set a record in having the first two-way radio communication between the plane and ground.

In 1931 a Buhl Airsedan [[built in Marysville, MI) was fitted with the DR-980 and set a record for time aloft [[without midair re-fueling) at 84 hours and 32 minutes. Pilots that shared this honor were Walter Edwin Lees and Frederick Brossy. It took 55 years for that record to be broken by Burt Rutan and his co-pilot in the Voyager aircraft.

Some links:

http://home.earthlink.net/~ralphcooper/index.htm

http://en.wikipedia.org/wiki/Packard_DR-980