April 12, 1998
RIP American Motors: 1954-87
In the early 1900's, automobile manufacturing was a growing business.
Independent automakers such as Auburn, Hudson, Nash, and Studebaker served a focused market, catering to small car drivers, not covered by the "Big Three" makers: Ford, General Motors, and Chrysler. Many of these independent automakers saw their last days during the Great Depression. After World War II, there was just a handful left.
American Motors was formed by the merger of two of these independents: Nash and Hudson. Nash President George Mason and Vice President George Romney saw the inevitable, to survive, the independents had to merge. Mason first talked to Packard who could not agree to a merger. After Mason tired of Packard's reluctance to join, he approached his second choice, Hudson. Hudson President, A.E. Barrit saw that Hudson was quickly losing money and decided that a merger would be the best course of action.
On May 1, 1954, Nash and Hudson joined, forming American Motors. (Foster 11) Mason was named chairman of the board, president, chief executive officer, and general manager. His assistant George Romney was named vice president, and Barrit became a director of the company.
For the first year of production, all of the old Hudsons were dropped, either for being dated or just not doing well in the market. The all-new Hudsons were based on existing Nash bodies with design features to keep them different. All Hudson production was also moved out of Detroit into Nash's main plant at Kenosha, Wisconsin.
In October, six months after the merger, Mason fell ill and unexpectedly died. The next day, Romney assumed all of his titles and responsibilities.
At the end of 1955, American Motors closed its West Coast plant at El Segundo, California, and moved all production to Kenosha. This move increased production, but still ended the year with a loss of $6.9 million. (Foster 18)
The 1956 model year brought out a new car, The Rambler. This was not a new name, but the car came out with no mention of Nash or Hudson. The press raved the new Rambler with its improved power, larger interior, and smoother steering. The rest of the American Motors line however, still carried the dated styles of 1952. With the loss in 1955, AMC could only retool the Rambler and give the others minor facelifts.
For most, the results of 1956 were not encouraging, with a loss of $19.7 million. Romney however, saw things differently. He noted that part of the loss, nearly $8 million was non-recurring expenses, and anticipated a reduction in expenses of $7.8 million in 1957. (Foster 25)
Late in the 1956 model year, AMC introduced their first V-8, the 327 cid, and was featured in a limited production high-performance Rambler Rebel for 1957. With the new engine and new car, Romney ended 1956 full of hope for the company. He noted that an increase of just 30,000 units would turn a profit for 1957.
A year later though, American Motors turned out a net loss of more than $10 million. The reduction in sales was due to the senior lines, but Rambler sales were up. In fact Rambler had its two best sales months ever in May and June. In 1958, head designer Ed Anderson reskinned the Rambler. He gave it flatter fenders and fender mounted quad headlights, a very popular feature in 1958. Also in 1958, the Nash and Hudson lines were dropped, leaving the dealers with the Rambler, which was earning quite a reputation on its own.
The lineup for 1958 included the six cylinder Rambler, the toned down 250 cid V-8 Rambler Rebel, the "Ambassador by Rambler", the "new" Rambler American, which was the old 100-inch wheelbase Rambler slightly restyled, and the Metropolitan, a low-investment import with little change for 58.
The 1958 model year ended in the black, the first time AMC had ever shown a full year of profit. There was a profit of just over $26 million and because of losses from the previous year, it was tax-free. Because of the recession, Americans were turning to the smaller, more economical Ramblers.
For 1959, styles remained basically the same with some added options and trim. Again, a profit was turned of over $60 million, the second year straight in the black. A slight re-skinning was done for 1960 on the Rambler and the Ambassador to keep the style fresh. AMC ended 1960 with over $48 million in profit and over $1 billion in sales, the first time ever.
Romney was quite pleased with the Rambler. It was having the fourth year in a row of sales increases, so he decided to do what most considered impossible. Romney wanted Rambler to get a spot in the "low-priced three": Chevy, Ford, and Plymouth. This would take a lot of work, but with the way things were going, he knew AMC could do it.
For 1961, plans were made to assemble Ramblers in Canada again. Contracts were also signed to begin assembly in Australia and Malta. These worldwide factories were beginning to contribute quite a bit to company profits.
The American got a facelift for 1961, but kept the same interior and inner body panels to save costs. The Ambassador got a very different front end, and kept the rest of the body more or less the same. Also in 1961, AMC and Industrias Kaiser Argentina signed an agreement to allow the assembly of Ramblers by IKA for Latin America.
Even though AMC finally reached third place in 1961, it was still an off year with sales dropping below the billion-dollar mark. Net profits and the employee count also dropped. Working capital did however go up by $7 million. (Foster 68)
For 1962, the Ambassador as it was known was dropped, and was put on the smaller Rambler Classic wheelbase. The two cars were basically the same, so the Classic was only offered with a six cylinder and the Ambassador had the V-8. The "Ambassador by Rambler" also became the Rambler Ambassador.
Rambler stayed in third place for 1962 even though the styling was a carryover and the rest of the market was improved. This was partly because of the new foreign operations.
In December of 1961 Ed Anderson, the man who put AMC in third place in industry sales, resigned. Anderson was tired of being in the engineering department. For years he wanted to be promoted to Vice President of Styling, but was told that if he was unhappy he should resign, so that's just what he did. Then, in February of 1962, George Romney asked for a leave of absence to run for Governor of Michigan. Roy Abernathy was then promoted to president and chief executive officer, and Richard Cross was named chairman of the board. Richard Teague was also named director of styling.
The entire Rambler line, minus the Metropolitan, was restyled for 1963. The new designs included curved side windows, smaller wheels, and different door handles. These were just a few of the new touches. The entire lineup was named Motor Trend's "Car of the Year".
The 1964 line of cars was the strongest ever, with a slight redesign of the Ambassador and a completely new American. AMC continued to make money during 1964, but was getting more competition in the compact and mid-size markets by Ford and GM. At the end of the 1964 fiscal year, sales had dropped though not much. This drop was credited to a poor mix of models, selling too many low priced cars and not enough hi priced ones.
Abernathy wanted to change AMC's image. He wanted to compete with the "Big Three", so for 1965 the cars started getting bigger, more powerful, and came with more options. In February, AMC came out with an all-new fastback, in response to the Ford Mustang, called the Marlin. It sold poorly, with just over 10,000 units. It was no competition. What people wanted was something more compact.
American Motors continued to move into the higher price ranges n 1966, by dropping the Rambler name from the Ambassador and Marlin, and adding more options, such as cruise control and even throw pillows to match the seat covers. The Classic featured minor changes, and the American got a facelift. A new V-8, the 290 cid was also brought out that year. It was put in the American to create the Rambler Rogue, a sporty compact, which was better trimmed and carried more standard equipment.
The 1966 models sold very poorly in the market. Partly because of design and partly because of something much worse, rumors. Abernathy was spending so much money, that it was becoming hard to turn a profit. This started people talking. They were talking about AMC with words like struggling, financially ailing, and strapped. The list goes on. This talk started to achieve a snowball effect on the company. By the end of the year, to the public, American Motors was a loser.
For the 1967 model year, the cars were slightly restyled with one major change being that the Classic was dropped and replaced by the Rambler Rebel. In Jan. of that year, Abernathy was forced to retire, and William Luneburg was named president and CEO, and Roy Chapin Jr. became chairman of the board.
The 1968 model year looked grim, but with a new management team, many felt more assured. A new car came out to replace the Marlin, a smaller car to compete more with the Mustang. It was called the Javelin. It was compact, sporty, and appealed to the younger crowd. A smaller version was also produced called the AMX. It was basically a shorter two seat Javelin. The Rebel, Ambassador, and American were all back again, this time the American being the only one with the Rambler nameplate. The two-door sedan was dropped from all models except the American, and the Rebel was the only convertible model available. There was little profit in 1968, but at least there was a profit.
The Rebel, Javelin, and AMX were all carryover models, with changes in equipment and trim for 1969. The American was renamed the "Rambler". The Ambassador was redesigned as the biggest Ambassador ever, on its 122-inch wheelbase. Halfway through the model year, a limited production car was made by stuffing a 390 cid V-8 into the small Rambler. It was given performance parts, painted white with red and blue accents, given sport wheels and fat tires, and christened the SC/Rambler. It was only planned to make 500, but interest was so high that 1,512 were made. (Foster 139) Often referred to as SCs, Hurst Ramblers, or Scrambler Ramblers, this car became what could be argued as one of the most collectable cars of the 1960's. On June 30, 1969, the last Rambler ever made in America came off of the assembly line at the Kenosha plant. The Rambler name lived from 1950 to 1969, and 4,204,925 Ramblers were built in this period. (Foster 140-1)
The new decade of the 1970's brought new cars with it. The Hornet, a small car designed to compete with the compact cars of the day. It shared stampings on roof of the two and four door models and the front and rear bumpers were interchangeable. The next new car for 1970 came out on April 1, 1970, April Fool's Day. This car was the first American-built subcompact. It was dubbed the "Gremlin". The wheelbase was only 96 inches long, and it had a funny sharp sloping hatchback, called the Kammback. The Gremlin was basically a Hornet chopped off behind the rear wheels. It was marketed for the younger crowd. Another change for 1970 was the logo. Before, it had been a script of the initials, AM. The new logo was a rectangle with a stylized A, and was red white and blue. The rest of the line received little change. The Rebel and the Ambassador got new rear quarter panels. The Javelin and AMX got a new sportier hood and grill.
The biggest news for 1970 came in February when AMC purchased Kaiser Jeep for $10 million. This was quite a bit, especially on a money-losing corporation. This may have seemed like a bad move, but Roy Chapin knew it had potential, and AMC needed a truck.
In 1971, AMC came out with a new slogan, "If you had to compete with GM, Ford, and Chrysler, what would you do?" The brochures and TV ads provided the answer, actually a separate answer for each line of cars. The Hornet came out with two new models, the Sportabout, a compact station wagon and the SC/360, a high performance Hornet, based on the success of the SC/Rambler, with a 360 cid V-8, styled wheels, and side stripes. The Gremlin also had a new line, the X package. This included bucket seats, carpeting, slotted wheels, side stripes, wide tires, and a painted grill.
The biggest news of the year however, was the new Javelin. It was wider and longer than the original, but wasn't much heavier. The AMX came as a trim package on the Javelin instead of a separate car. The Rebel was replaced by the Matador, which was basically just a facelift of the 1970 Rebel. The Ambassador was a carryover with a different grill and different trim. Jeeps were fine-tuned, and their engines were replaced by AMC engines. The Jeep assembly line was streamlined and Jeeps were distributed to AMC dealers to improve the Jeep dealer body. The General Products division became its own subsidiary, AM General, which was in charge of production and sales of all military and postal vehicles. The Javelin didn't sell well, and neither did the Hornet Sedan or Matador, but the Sportabout and Gremlin both had potential.
Most of the changes in 1972 were internal. The Borg-Warner transmission was dropped and was replaced by a smoother shifting Chrysler unit. Door hardware, radios, and quality standards were all improved. All stripped down models were dropped, and most cars were given better interior trim. The Javelin got a new grill, and the Gremlin had the option of the 304 cid V-8 engine. The SC/360 Hornet was dropped, and Rallye and X packages were added to the Hornet line. AMC also came out with the "Buyer Protection Program", a warranty/guarantee to new car buyers. These improvements must have worked as sales and profits both increased in the model year.
The only new car in 1973 was the Hornet hatchback. This was a fairly new concept and AMC pulled it off nicely. The Gremlin received the Levi's interior, which consisted of Levi's blue denim on the bucket seats and door panels. The Sportabout also got a new interior by fashion designer Aldo Gucci. The seats and door panels wore Gucci's trademark green and red stripes on a beige background. Javelin was a carryover again with very little change. It, however also got a stylish new interior designed by Pierre Cardin. A Trans-Am Victory Javelin was also offered to celebrate its victory in the Trans-Am racing series. Ambassador and Matador got slightly redesigned grills but not much else. Jeep pickups got new pickup boxes and tailgates, dashboards, and a new four- wheel-drive system called Quadra-Trac, a full time system. Jeep CJ and Commando also got slight upgrades. Profits were up again, and things kept looking better.
The new car for 1974 was the Matador coupe. It was nothing like any previous Matador. Like the Gremlin and Hornet, it had the X package, which included the 304 cid V-8. The styling, however, was odd. There were deeply tunneled headlights, a plain grill, a long hood, and a fastback. Some thought it looked like an updated Marlin. The other Matadors and the Ambassador received a new grill and a hood that was longer in the middle and tapered back to meet the fenders. The Gremlin got new bumpers and a new grill. The Hornet and Javelin also received very little change. The Ambassador got the same new hood as the Matador, but a better-looking grill and quad headlights. The new Cherokee, which was actually just a two-door Wagoneer, came out for the 1974 season. The Wagoneer got a new grill and was moved further upscale so it wouldn't compete directly with the Cherokee. Car sales went up in 1974, but earnings were very little, partly due to the tooling of the Matador coup and the fact that it didn't sell well.
In 1975, AMC came out with yet another totally new car, the Pacer. It was small, wide, and its design was something no one had ever seen. It had rounded styling and a lot of glass. The Pacer was originally designed to have a rotary engine, which AMC was to purchase from General Motors, but GM bailed out at the last minute. AMC then had to widen the car and shoehorn the 232 cid six cylinder into it.
The rest of the line in 1975 was carryover. The Matador sedan and station wagon got a new grill. The Hornet, Gremlin, and Matador coupe remained basically the same, with a few more options. One big change to the line was the absence of the Ambassador and Javelin. Big car sales would now be focused on the Matador, and the Javelin hadn't sold well anyway, so few missed it.
Every car for the 1976 model year was a carry-over from the year before. None came with much new besides a grill or options. Jeep, however, introduced a new model, the CJ-7. It had a ten-inch longer wheelbase than the CJ-5, which gave engineers enough room to fit an automatic transmission in it. Quadra-Trac full-time four-wheel-drive and a fiberglass hard top were also newly available for the CJ-7. Losses in 1976 totaled over $46 million, which came right after a $27.5 million loss in 1975, not a good combination.
In 1977 there were a few improvements, but again the line was basically a carryover. The Gremlin got a new front end. It also had a new Custom model which included a four-cylinder engine. The four-cylinder was long overdue, and without time to develop its own, AMC purchased the entire design from Audi in Germany. The Pacer got a wagon and the Hornet got an AMX model, which was a just a dressed up hatchback.
Jeep was doing great. The Cherokee got a four-door, which was a younger sportier Wagoneer. The Wagoneer was doing exceptional in the luxury four-wheel-drive station wagon market, being the only vehicle in that market.
William Luneburg, president of American Motors retired in May of 1970 and was replaced by Gerald C. Meyers. Ian Anderson was elected executive vice president and chief financial and administrative officer.
In November, it was announced that in Egypt, a joint venture plant would build Jeeps for the Arab market. AMC owned 49 percent of this new plant which had the capacity to build 12,000 Jeeps per year from American made parts.
All divisions of AMC operated at a profit for 1977 except for Automotive Operations, which lost $1.2 million, and that was after cars and Jeeps were listed together.
In 1978, the Hornet became a new car. It got a facelift and was moved up market a bit. With new options, a new look, new suspension, and a luxury image, the powers at AMC decided to change one more thing, the name. The Hornet was renamed the Concord for 1978 to give it a more luxurious sound. The Hornet name had also lost most of the respect it once had by then. The Matador coupe and sedan returned again, with very little change. The Pacer got a V-8 option to help pull the excess weight of it. To fit the bigger engine under the hood, it had to be raised. Along with the new hood, the Pacer also got a new, "Mercedes style" grill. The gremlin had very little change in 1978. One addition was the GT package, which was introduced mid-year. It included fiberglass flares and graphics. This wasn't what it needed though. The Gremlin, along with the other cars at AMC needed a new look. This unfortunately would never happen. There was also a new AMX in 1978, based on the Concord, that was flashier than before and most didn't care for it. Jeep sales did very well. So well, in fact, that there were problems at the factory with quality control, which was lost in the rush to build more Jeeps. Executives, again, were replaced in 1978. W. Paul Tippet was named president, and Wilson Sick Jr. became group vice president of finance and administration. James L. Tolley was named vice president of public relations.
The Gremlin was no more in 1979, but there was a new car, the Spirit, which came in a liftback and a sedan. Both were a Gremlin with a restyled roof, grill, and back panel. The sedan was basically a longer Gremlin with redesigned side windows and grill. The Pacer and Concord were back with minor changes and there was a new AMX, based on the Spirit liftback. The entire Matador line was gone, but few missed it, especially the coupe. Senior Jeeps got a new front end and the Cherokee line got several dress-up models. The CJ also got a Silver Anniversary to celebrate its 25th year of production. The Concord also got a Silver Anniversary edition, to celebrate 25 years of AMC. Both were painted silver with special seat trip and badges.
Renault, a French car company bought into AMC in early 1979. The two manufacturers signed an agreement for AMC to sell Renault cars in their American and Canadian dealerships. In 1979, Jeep sales edged out car sales for the fiscal year, by just a handful. When the fiscal year ended, AMC had made a profit, in fact it was the second best in the companies history.
The Jeep line in 1980 needed better fuel economy, so part-time four-wheel-drive was made standard and Quadra-Trac was optional. The GM 2.5 liter four-cylinder, which was purchased in 1979 was also made standard equipment, along with a four-speed transmission. Emphasis was placed on the six-cylinder for the Cherokee, and both models were given a Laredo package to lure buyers into the showroom.
A new four-wheel-drive car, which was really just a four-wheel-drive Concord, was introduced in 1980. It was called the Eagle. The Eagle came in a two or four-door sedan or a station wagon. It had a full-time four-wheel-drive system which sensed when one wheel was loosing traction and directed more power to that axle. This was suitable for light-duty off-road driving, but nothing that would need a low range gear. The Concord got some slight styling changes, but the Spirit and Pacer were left the same as emphasis was placed on the new Eagle.
The Eagle did wonderfully, and the other cars did OK, but AMC suffered a tremendous loss. This was partly because of the recession/inflation that was taking place. AMC wasn't the only company that suffered losses in 1980. Even the Big Three reported losses.
In 1981, Jeeps continued to improve on fuel economy, and a new pickup, based on the CJ, was introduced. The Scrambler gave AMC an introduction in the compact pickup market. It didn't come in a two-wheel-drive version, but still sold well. Cherokee sales suffered as they were high margin/high volume vehicles.
The Pacer and AMX were dropped, but two new Eagles were introduced, the SX/4 and the Kammback. The SX/4 was basically a four-wheel-drive Spirit liftback, and the Kammback was a four-wheel-drive Spirit sedan. A new four-wheel- drive system was introduced in 1981, called Select-Drive. It allowed the driver to disconnect full time four-wheel-drive and just run in two-wheel-drive to increase gas mileage.
In 1982, Renault owned 46 percent of American Motors, and Renault executive Jose J. Dedeurwaerder became president of AMC. All cars in the 1982 line were carryovers, but with higher gas mileage, the Buyer Protection Plan, Ziebart Factory Rust Protection, and a 100 percent galvanized steel body, AMC cars were a great value.
For 1983, AMC was selling the Renault LeCar, Fuego, and the new Alliance as AMC/Renault's. They were also tooling their own 2.5 liter four-cylinder, that would be entirely designed and built by AMC. The Alliance had front-wheel-drive, fuel injection, and power-assisted front disc brakes, standard. The Spirit sedan and liftback were dropped, and the D/L and GT were offered as separate models. Concord two-doors were also dropped. The Eagle line lost the Kammback and the two-door sedan. The rest was carryover. All of AMC's subsidiary companies were sold, and AMC was on it's own to make money.
The first all-new Jeep since 1963 came out for the 1984 model year. It was called the Cherokee. The new Cherokee was smaller, lighter, and given a new suspension system, Quadra-Link, which was solid but still gave a smooth ride. The CJ-5 was dropped, but hadn't sold well because the CJ-7 was similar but handled better. The Eagle SX/4, the Spirit, and the Concord were also dropped. The Eagle sedan and wagon, along with the rest of the Jeeps were all carryover. The Alliance was back along with a hatchback version called the Encore. In August of 1984, Dick Teague, the man who designed the revolutionary Hornet, Gremlin, Concord, and Eagle, along with the not so great, Matador coupe, Marlin, and Pacer, announced his retirement from AMC. China and AMC made a deal where the two would jointly build Jeeps for the Chinese, and later the Asian, market. The company, Beijing Jeep, would build the new Cherokee from kits, and also a Chinese version of the CJ. For the first time since 1979, AMC turned a profit, just barely, but it provided hope for the future.
The Cherokee got an optional shift-on-the-fly four-wheel-drive system and a 2.1 liter Renault-built turbo-diesel. The Eagle was also given the shift- on-the-fly option and a new hood and grill.
Renault sales started to sink, as did Eagle sales. Rumors started to circulate about Renault wanting to sell its share of AMC. They had lost over a billion dollars. There were labor disputes in Kenosha and at the Toledo Jeep plant, where Jeeps were being sabotaged. Things weren't going good. In 1985, AMC lost even more money.
The Alliance and Encore got a new grill in 1986, and the Eagle was hardly changed. Jeep brought out a new pickup, based on the Cherokee, called the Comanche. It was offered in either two or four-wheel-drive. CJ-7 production ended early in 1986, so the Brampton plant could be retooled for it's replacement, the Wrangler. Wrangler was basically a CJ with square headlights, a more carlike interior, better suspension, and a sturdier roll cage. Halfway through 1986, Dedeurwaerder was replaced as president by Joseph Cappy. Car sales were terrible, but losses weren't as bad as they could have been. Also halfway through 1986, AMC started manufacturing Chrysler automobiles in the Kenosha plant. This was strange, but it was a way for the company to make money.
The Eagle was back in 1987, with no mention of AMC. The Comanche and Cherokee got the new 4.0 liter in-line six-cylinder, which was based on the old AMC six. It was also decided that most Renault products would be built in Europe, as they couldn't afford to retool for production in America.
In March of 1987, the news broke. Chrysler Corp. was going to buy AMC. This was strange though. AMC was sure to make a profit in 1987, and Renault was bailing out. Chrysler bought AMC for $1.1 billion, and agreed to buy Renault parts for five years for use in the new Premier.
In its final year of existence, car sales were not good. There were less than 25,000 Alliances sold, 4,564 Eagles, and only 192 Premiers. AMC/Jeep and Renault total wholesale numbers for 1987 were mixed in with Chrysler figures though.(Foster 291)
By fall, AMC was renamed the Jeep/Eagle Division of Chrysler Corp. The Eagle station Wagon continued production for the 1988 model year, with more standard equipment, to help get rid of existing stock. The Renault Medallion was renamed the Eagle Medallion, and the same was done with the Premier. The Jeep pickups, which had been in first shown in 1963 were dropped. Production for the Eagle ended on Dec. 14, 1987. This was the last car made by the last independent.
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