American Motors Corporation

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Logo 1954-1969

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Logo 1970-1987

American Motors Corporation (AMC) was an American automobile company formed on January 14, 1954 by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company. At the time, it was the largest corporate merger in U.S. history, valued at US$198 million ($1.44 billion in 2006 dollars). Declining sales and a fiercely competitive auto market in the United States forced AMC to seek a partner in the late 1970s, which led to a tie-up with France's Renault in 1979. The arrangement lasted until March 2, 1987, when American Motors was purchased by the Chrysler Corporation, which discontinued the use of AMC and Renault brand names in the United States. The Jeep line was continued, as well as some of the models under the Eagle marque.

Formation

In January 1954, Nash-Kelvinator Corporation acquired the Hudson Motor Car Company (in what was called a merger) to form American Motors. When the merger was completed in the spring of 1954, Hudson's CEO, A.E. Barit was retained as a consultant and given a seat on the Board of Directors in the new company, and Nash's George W. Mason was made President and CEO of the new concern.

Mason, the architect of the merger, believed that the only chance of survival for America's remaining independent automakers was for them to join forces in one large, multibrand auto giant, able to challenge the "Big Three" - General Motors, Ford, and Chrysler - as an equal. Mason also entered into informal discussions with James J. Nance of Packard to outline his strategic vision. Nance saw value in the concept, and interim plans were made for AMC to buy Packard Ultramatic automatic transmissions and Packard V8 engines for certain AMC products.

Packard did acquire Studebaker as planned, in 1954, and the resulting Studebaker-Packard Corporation (S-P) cooperated with AMC by making the new 308 cubic inch (5.1 L) Packard V8 engine and Packard's Ultramatic automatic transmission available to AMC, for its Nash Ambassador and Hudson Hornet models. However, Mason's death in 1954 placed George W. Romney at the helm of AMC and one of Romney's first official statements a week after Mason's death, as reported in October 25, 1954 edition of Time Magazine, was to announce that there would be no merger talks with Studebaker-Packard "at this time or in the foreseeable future." This announcement was most likely made in response to S-P President James Nance's refusal to consider any merger proposal in which he could not be in the top command position. This is considered to have been a matter of personalities, as Mason and Nance had formerly been competitors as heads of the Kelvinator and Hotpoint appliance companies, respectively. Romney agreed with Mason's commitment to buy S-P products; however, the understanding between Mason and Nance had been that S-P would endeavor to purchase parts from American Motors in return. S-P never lived up to its end of the gentleman's agreement. Consequently, Romney felt the Packard engines and transmissions were too expensive, and ordered AMC engineers to begin development of the company's own V8 engine. For better or worse, both would have to go it alone in the ever more competitive automobile market.

By 1964, Studebaker production in the United States had ended (its Canadian operations closed in 1966) leaving only the Big Three, as well as the much smaller AMC and Kaiser Jeep remaining in the North American auto business.

Product development in the 1950s

Nash Metropolitan.

American Motors combined the Nash and the Hudson product lines under a common manufacturing strategy, while retaining both Nash and Hudson established dealer networks, beginning in 1955. The fast-selling Rambler model was sold under both the Nash and Hudson labels in 1955 and 1956, eventually becoming a marque in its own right, and the mainstay of the company. These badge-engineered Ramblers, along with similar Metropolitans, were identical, aside from hubcaps, nameplates, and a few other minor trim details. The pre-existing full-size Nash product line was continued and the Nash Statesman and Ambassador were heavily restyled to become the "new" Hudson Wasp and Hudson Hornet. The two cars, while sharing a common body shell, were quite distinct, perhaps even more than they should have been. They were at least as different from one another as Chevrolet and Pontiac, and in some ways more so. Hudsons and Nashes each used their own engines as they had previously: the Hudson Hornet continued to offer the famous 308 in³ (5 L) six that had been America's stock car racing champion a short time before, while the Wasp now used the engine of the former Hudson Jet. The Nash Ambassador and Statesman continued with their well-known overhead valve and L-head sixes, respectively. Hudson and Nash cars had different front suspensions, and the only sheet metal panels that interchanged between the two were the trunk lids. Even the rear window glass did not interchange. Dash panels, and even the braking systems were different. As noted earlier, the same Packard (and later American Motors) designed V8 engines were available in both Hudson Hornet and Wasp, and their Nash counterparts. Hudson aficionados disliked the soft handling and ride of the derisively nicknamed "Hash" models, but the cars did offer an improved ride and much better driver and passenger visibility, not to mention greater fuel economy due to the lighter weight of the Nash unitized body.

1958 Rambler sedan

For the 1958 model year, the Nash and Hudson brands were dropped in favor of the popular Rambler name, which now became a marque in its own right. The slow-selling, British-built Nash Metropolitan subcompact became its own standalone brand and continued on for a few more years, sharing showroom space with Rambler, finally being dropped after 1962. The prototype 1958 Nash Ambassador / Hudson Hornet, built on a stretched Rambler platform, was renamed at the last minute to "Ambassador by Rambler". To round out the model line, American Motors did something totally unheard of and never successfully duplicated to this day - they reintroduced the old 1955, 100 inch (2440 mm) wheelbase Nash Rambler as the new Rambler American with only a few modifications. This gave Rambler a compact lineup with 100 inch (American), 108 inch or 2743 mm (Rambler Six and Rebel V8), as well as rhe 117 inch or 2972 mm (Ambassador) wheelbase vehicles.

Under the leadership of George W. Romney, Rambler automobiles were among the best-known products among consumers. This was because Romney's vision focused solely on the compact car, a fuel-efficient vehicle twenty years before there was a real need for them. Thus, while the "Big Three" were introducing ever larger cars AMC undertook a "dinosaur fighter" strategy. Romney became one of the first-high profile media savvy business executives. Moreover, AMC established two core strategic factors: (1) the use of shared components in AMC products and (2) a resistance to follow the restyling race of the Big Three. AMC could focus on cost controls and provide consumers a better value. Rambler became a synonym for solid economy cars.

Changing focus in the 1960s

1969 American Motors AMX

In an effort to stay competitive, American Motors produced a wide range of products during the 1960s. In the early part of the decade, sales were strong. In 1961, Ramblers ranked in third place among domestic automobile sales. Romney's strategic focus was very successful during the early 1960s as reflected in the firm's healthy profits year after year. The company became completely debt-free. However, in 1962, Romney resigned to run for Governor of Michigan. His replacement was Roy Abernethy, AMC's successful sales executive.

Abernethy believed that AMC's reputation of building reliable economical cars could be translated into a new strategy that could follow AMC buyers as they traded up into larger, more expense vehicles. The first cars bearing his signature were the 1965 models. These were a longer Ambassador series and new convertibles for the larger models. During mid-year a fastback, called the Marlin, was added. Rather than competing directly with Ford's new pony-car, AMC's "family-sized" car emphasized personal-luxury. Abernethy also called for the de-emphasis of the Rambler brand. The 1966 Marlin and Ambassador lost their Rambler nameplates, and were badged as "American Motors" products. The new models shared fewer parts among each other and were more expensive to build. The continuing quest to match the "Big Three" with annual styling changes required large expenditures. A new line of redesigned cars in the full and mid-sized markets was launched in the fall of 1966. The cars won acclaim for their fluid styling, but Abernathy's ideas did not work as they only confused the firm's core customers. Sales of the new Rebel and Ambassador models dropped after their introduction. There were quality control problems, as well as persistent rumors of the company's demise because of its precarious cash flow.

Abernethy was ousted from AMC and damage control fell to the new CEO, Roy D. Chapin Jr. (son of Hudson Motors founder Roy D. Chapin). He quickly instituted changes to AMC's offerings and tried to regain market share. Chapin's first decision was to cut the price of the Rambler to within $200 of the basic Volkswagen Beetle. Innovative marketing ideas included making air conditioning standard on all 1968 Ambassador models (available as a delete option). This made AMC the first U.S. automaker to make air conditioning standard equipment on its cars, beating out all other makes; including luxury makes Lincoln, Imperial, and Cadillac. The company also introduced exciting entries for the decade's muscle car boom, most notably the AMX; while the Javelin served as the company's entrant into the sporty "pony car" market created by the Ford Mustang. Additional operating cash was derived in 1968 through the sale of Kelvinator Appliance, once one of the firm's core operating units.

The Rambler brand was completely dropped after the 1969 model year in the U.S. and Canada, although it continued to be used in several overseas markets as either a model or brand name, with the last use in Mexico in 1983. From 1970, "AMC" was the brand used for all American Motors passenger cars; and all vehicles from that date bore the AMC name and the new corporate logo. However, the names "American Motors" and "AMC" were used interchangeably in corporate literature well into the 1980s. The branding issue was further complicated when the company's all-wheel drive passenger cars were initially marketed as the "American Eagle".

Chapin also expanded American Motors product line in 1970, through the purchase of the Kaiser-Jeep Corporation (formerly Willys-Overland) from Kaiser Industries. This added the iconic Jeep brand of light trucks and SUVs, as well as Kaiser-Jeep's lucrative government contracts - notably the M151 MUTT line of military Jeeps and the DJ-Series postal Jeeps. AMC also expanded its international network. The military and special products business was reconstituted as American Motors General Products Division, later reorganized as AM General.

1970s developments

1970 Javelin SST

The 1970s started on a high note. In 1970, all passenger cars were consolidated under one distinct brand identity. It also marked the debut of the AMC Hornet range of compact cars.

American Motors was an innovator in using the same platform for a variety of models, Thus, the new Hornet platform was used to create the first American-built subcompact - the AMC Gremlin. It was introduced on April 1, 1970. The Hornet went on to become American Motors' best-selling passenger car since the Rambler Classic, with more than 860,000 units sold before the end of production in 1977. The Gremlin wasn't far behind, with more than 670,000 sold from 1970-78.

The successful product launches of the Hornet and Gremlin convinced AMC to continue with new product developments. The new mid-sized AMC Matador arrived for 1971 as a replacement for the Rebel. AMC played on the lack of recognition of the name by using the advertising line "What's a Matador?" Starting in 1974, the Matador evolved into two distinct vehicles - conventionally boxy sedans and station wagons, and a radically styled two-door called the Matador Coupe. After 1975, the Matador sedan and wagon took the place of the discontinued Ambassador as AMC's flagship model. Nash and AMC made the Ambassador from 1927 to 1974, the longest used model name of any AMC product.

1977 Matador Barcelona

Matador Coupe sales never lived up to expectations and its unique design meant it shared few components other than the suspension, drive train, some trim, and interior parts with the sedans. Most of the tooling for the sedans and wagons dated back to the 1967 Rambler Rebel and had long been paid for. Nevertheless, by 1978, sales of large-sized cars fell with the rising gasoline prices, and all Matador models were discontinued.

The AMC Pacer, introduced in 1975, was an innovative gamble and another well-intentioned entry into the market AMC seemed to know best. The development of the Pacer prior to its 1975 introduction coincided with two developments in U.S. Federal passenger auto laws. The first, the reduction in allowed passenger auto engine emissions would have been met by the use of the Wankel type engine whose exterior compactness allowed for extensive engine bay emission control equipment. The second, increases in U.S. passenger auto safety laws was met by the designed-in safety features such as internal door beams. However, these safety features, the wide exterior and the extensive window glass caused the Pacer to be very heavy for its exterior length.

1975 AMC Pacer.

Billed as "the first wide small car", the Pacer was an attempt to build a subcompact car with the comfort of a full-sized one. To this end, the car was as wide as a typical Cadillac of the day, yet no longer than the Gremlin. This provided the same front seat space as a luxury car within the length of a typical compact. The Pacer was also unconventional with its bulbous, wrap around window glass, accounting for 35% of the car's surface area, thus eliminating blind spots. Among other unique features, the passenger door was four inches longer than the driver's door, to facilitate curbside back seat access.

American Motors planned to use a General Motors-built Wankel rotary engine for the Pacer. However, with the advent of the Arab Oil Embargo energy crisis of 1973, GM promptly aborted their rotary engine development program due to, among others factors, the excessive fuel consumption of the Wankel engine compared to conventional piston engines with the same power output. Thus, AMC was stuck with a car that had no engine. They had to shoe-horn their own existing 232 and 258 in³ (4.2 L) AMC Straight-6 engines into the Pacer instead. The sixes offered better fuel economy than a rotary engine would have, yet resulted in relatively poor fuel economy in light of the new focus on energy efficiency. In addition, the Pacer was all-new except for the drive train, sharing virtually no components with other AMC cars. This made it expensive to produce, and when sales took a steep fall after the first two years, the manufacturing cost per vehicle skyrocketed. Two attempts to broaden the Pacer's appeal were made: an unusual station wagon variant was introduced, and the front end was re-styled with a raised-center hood in order to provide space to install AMC's V-8 engine. The failure of the Pacer and the Matador Coupe are often used as the reasons for AMC's ultimate demise, as their development and production costs drained corporate accounts of much needed capital which could have been used to update and modernize the already popular Hornet and Gremlin lines.

As the decade wound down, the company found itself with aged products, unable to compete in a very hotly contested market, and in the midst of a growing energy crisis.

In 1977, the company introduced a new front end design for the Gremlin, revamped the rear hatch and fascia, and a more fuel efficient US-produced 121 in³ (2.0 L) 4 cylinder Volkswagen designed Audi engine which AMC produced for a short period under the AMC name (see below under engines). However, the cost of the engine was high, so AMC - in a curious move - left the cheaper-to-build 232 in³ as standard equipment. In the midst of a gas crisis, AMC had to have a fuel-thrifty model for dealers to sell.

Another major change in the company's lineup for 1977 was the reemergence of the AMX nameplate. Little more than a sports appearance package offered on the Hornet hatchback, it came standard with AMC's 258 in³ inline-6 mated to either a 4-speed manual transmission or 3-speed automatic. The AMC 304 in³ V8 was optional, but only available with the automatic transmission.

The Pacer wagon debuted in 1977, as well. All Matadors received a host of standard equipment that was formerly optional (e.g. power steering, automatic transmission), thus negating the need for the now-defunct Brougham package. The Matador coupe received a new landau vinyl roof treatment with opera windows as optional equipment, and a new Harvest Beige/Sand Tan two-tone paint scheme for top-line Barcelonas.

For 1978, the Hornet platform was redesigned and renamed the AMC Concord. The front fenders and related panels were borrowed from the new Gremlin design with very minor changes. The result was a car that looked very different and fresh compared to the aging Hornet. AMC aimed at the emerging "premium compact" market segment with the Concord, with special attention to ride and handling, and including a long list of standard equipment, tasteful trim, and interior luxury. Gremlins picked up a new instrument panel borrowed from the Concord, as well as a Hornet AMX-inspired GT sports appearance package, and a new striping treatment for X models. The AMC Pacer received a modified hood with a raised center section designed so that the engine bay would accommodate a V-8 engine. A new Mercedes-type crosshatch grille was seen at the front, which reflected the hood's new shape. The former Pacer X package gave way to a Sport package, as well. Meanwhile, sales of the Matador Coupe, sedan and wagon had been sliding steadily, and the decision was made to eliminate the 304 in³ V8 engine from the options list - leaving only the 258 in³ Inline-6 (standard on coupes and sedans) and the 360 in³ V8 (optional on coupes and sedans, standard on wagons) as the only available engines. The two-tone Barcelona luxury package became available on Matador sedans for the first time, while the Barcelona coupes added an Autumn Red/Claret two-tone paint scheme option. The changes were not enough to keep interest in the vehicle, so AMC trimmed Matador from the lineup at the end of the model year after a final run of 10,576 units.

In 1979, the Spirit sedan replaced the Gremlin. An ingenious redesign of the rear panels created a fastback version of the car, which AMC dubbed the Spirit Liftback. The Liftback quickly proved to be a successful line extension.

The Pacer remained largely unchanged - only a new leather-line Limited trim line was added - and rapidly-declining sales indicated the end was near. The last Pacer would be produced in December 1979, for the 1980 season.

Concords picked up new quad rectangular headlights, a new chrome vertical-bar waterfall grille, and hatchbacks (in their final season) became available in DL trim. On May 1, AMC celebrated the 25th anniversary of the Nash-Hudson merger by releasing "Silver Anniversary" editions of the AMC Concord and Jeep CJ in two-tone silver. Jeeps at this point were making around 50% of the company's sales and most of its profits; and a new small, fuel-efficient car from Renault - courtesy of a new deal struck between the two companies - began to appear in dealer showrooms: the LeCar.

1979 was a good year for AMC, but there were long-avoided problems in the company's history that would catch up again by the end of the year. AMC's problems were compounded by an economic slump at midyear initiated by soaring energy prices. The downturn was accompanied by automobile plants shutting down and domestic unemployment rising. These twin factors depressed Jeep's sales and therefore the company's cash flow. At the same time, pressure increased on the car lines due to large numbers of American buyers turning to imported cars.

Early 1980s and Renault links

The problems

The facelifts and rebranding of the company's aging line of cars was not a permanent fix, in spite of the initial sales success of its innovative models and marketing strategies. American Motors desperately needed truly new, modern products, but lacked the capital and resources to develop them. At the same time, the competitive landscape had dramatically changed. No longer was the threat limited to the Big Three automakers (General Motors, Ford, and Chrysler); it was now the Japanese demonstrating how to produce automobiles. The Japanese competitors not only targeted the heart of AMC's passenger product line of small cars, but also relied on outsourcing and Just In Time (JIT) supply chain for parts and components to their efficient brand new assembly plants now located in the United States. On the other hand, AMC struggled with its inefficient and aging Kenosha facilities. This was the oldest continuously operating automobile plant in the world, and production there required moving components and unfinished bodies across the city of Kenosha, Wisconsin.

The solution

The only alternative was to seek a partner to invest in the business. In 1979, AMC found a ready investor in the French automaker Renault. Under the terms of the American Motors-Renault alliance, the French company purchased a 5% interest in American Motors and provided US$135 million in the form of a loan to help shore up the business. In exchange, American Motors would act as the North American importer and distributor of Renault products, which would be sold through the existing AMC-Jeep dealer network. This was not the first time the two companies worked together. Lacking its own line of prestige models in the early 1960s, Renault assembled CKD kits and marketed Rambler cars in France.

In January 1982, Paul Tippett assumed the CEO's job and Jose Dedeurwaerder, a Renault executive, became the new president. The changes in top management came at a time when the domestic economy was sinking, forcing AMC into the worst of times. It even had to persuade its dealers just to stay open. Dedeurwaerder brought AMC a broad perspective at a critical time. As an engineer and an international business executive with 23 years at Renault, he is credited with streamlining many of AMC's arcane management techniques. Dedeurwaerder also instituted important improvements in plant layouts, as well as cost and quality control. A new line of Renault-designed, modern front-wheel drive cars would be produced by American Motors at their Kenosha plant.

Alliance results

The first new product resulting from this partnership was the 1983 Renault Alliance. This was a front-wheel drive compact 4-door sedan was designed in France and adapted to American standards, that also added a 2-door version for North America. The Alliance won Motor Trend Car of the Year and other awards as its introduction coincided with an increased interest in small cars. A virtually identical hatchback version was also produced, badged as the Renault Encore. Due to the ever-worsening financial situation at American Motors, Renault was forced to increase their stake in the company several times to keep it solvent, reaching a 49% ownership in 1983. AMC's ownership by Renault ended its run as a truly American car company.

1981 AMC Eagle Wagon.

Following the 1983 model year, the AMC brand was pared down to a single model - the four wheel drive Eagle line. From that point on, the focus of the company would be on the Renault and Jeep brands. Introduced in 1980, the Eagle was a four-wheel drive car consisting of a Concord body shell mounted on an all-new platform developed by American Motors engineers during the late 1970s. The Eagle become one of AMC's best-known products and is considered to be one of the first "crossover SUVs". Under its familiar body, the Eagle featured some truly revolutionary engineering with its full-time all wheel drive system. Not surprisingly, most Eagles were sold in snow-prone areas. Per AMC tradition, sales were strong for the first year or two, then tapered off dramatically. Whatever the Eagle's merits, it may be that customers had simply grown tired of the styling, which dated back to the 1970 Hornet.

Jeep benefits

More significant for the future of AMC was the introduction of a completely new line of compact Jeep Cherokee and Wagoneer models in 1983. These downsized Jeep vehicles quickly became popular and established a new market segment,defining the modern SUV. These vehicles initially used the AMC 2.5 L OHV four-cylinder engine with a carburetor and optionally a General Motors-built 2.8 L, carbureted V6. After 1986, throttle-body injection replaced the carburetor on the 2.5 L I4 engines. A Renault 2.1 L Turbo-Diesel I4 diesel was also offered. 1987 models used the "new" 4.0 L (242 in³) I6 engine, derived from the older 4.2 L (258 in³) I6 with a new head design and an electronic fuel injection system designed with help from Renault, utilizing Renault-Bendix (Renix) parts.

One older design was kept - the Grand Wagoneer full-size luxury SUV and the related J-Series pickups continued to be built on the same chassis as the earlier SJ model Wagoneers and Cherokees that dated from 1963, with the AMC 360 in³ V8 (the engine and the Grand Wagoneer ceased production after 1991; the pickups were dropped after 1987). The AMC Concord and Spirit were dropped after 1983, with no replacements. The AMC Eagle was continued, and in station wagon form lasted into the 1988 model year. The final 1988 Eagle 4 wheel-drive wagon was built on December 14, 1987

1985 and the final buyout

Changes in the marketplace

1985 was a turning point for the company as the market moved away from AMC's small models. With fuel relatively cheap again, buyers turned to larger more powerful automobiles and AMC was unprepared for this development. Even the venerable Jeep CJ-5 was dropped after a 60 Minutes TV newsmagazine exposé of rollover tendencies under extreme conditions. AMC also confronted an angry work force. Labor was taking revenge, and reports circulated about sabotage of vehicles on the assembly lines because of the failure to receive promised wage increases. There were rumors that the aging Kenosha plant was about to be shut down. At the same time, Chrysler was having trouble meeting demand for its M-body rear-drive models (the Chrysler 5th Avenue, Dodge Diplomat and Plymouth Gran Fury) and reached an agreement with AMC to use some of Kenosha's idle plant capacity.

Changes in management

These problems came in the midst of a transfer of power at AMC from Paul Tippet to a French executive, Pierre Semerena. The new management responded with tactical moves by selling the lawn care Wheel Horse Products Division and signing an agreement to build Jeeps in the People's Republic of China. The Pentagon had problems with AM General, a significant defense contractor. AMC's military equipment division was actually now managed by a partially French government owned firm. The US government would not allow a foreign government to own a significant portion of an important defense supplier. As a result, the profitable AM General Division was sold. Another milestone was the departure of Dick Teague, AMC's design vice president for 26 years. He was responsible for some of AMC's timelessly beautiful and advanced vehicles, as well as for some of its disappointments.

Problems at Renault

American Motors' major stockholder, Renault, itself was experiencing financial troubles of its own in France. The investment in AMC (including construction of a new Canadian assembly plant in Brampton, Ontario) forced cuts at home, resulting in the closure of several French plants and mass layoffs. Renault was down to just three alternatives regarding its American holdings: (1) They could declare AMC officially bankrupt thereby lose its investment; (2) They could come up with more money, but Renault management perceived AMC as a bottomless pit; or (3) AMC could be put up for sale and the French could get back part of their investment. Against these detractions, Renault's chairman, Georges Besse, continued to champion the French firm's future in the North American market. Furthermore, the newly built factory in Canada put on line, a thoroughly modern AMC engine and transmission was introduced, and Jeep vehicles were riding an unprecedented surge in demand. AMC was on the road to a profitable recovery.

The assassination

Nevertheless, external events took a dismal cast for AMC. Apparently a target because of his high standing among French capitalists, Georges Besse was assassinated on November 17, 1986. A terrorist Maoist organization, Action Directe, later claimed his murder was retaliation for Besse's reorganization of the struggling firm. This tragedy allowed other Renault executives to push the parent company to sell AMC. The company's new president set out to repair employee relations and divest their investment in American Motors.

The earlier arrangement between Chrysler and AMC that led to AMC producing Chrysler's Dodge Diplomat, Plymouth Gran Fury and Chrysler Fifth Avenue cars became grist for the rumor mill that suggested Chrysler was about to buy AMC. In March 1987, after much discussion and several transatlantic meetings, Chrysler agreed to buy Renault's share and all of the remaining shares in AMC for US$1.1 billion. AMC became the Jeep/Eagle division of Chrysler. The strategy of Chrysler CEO, Lee Iacocca, was for his company (now flush with money) to capture the Jeep brand. It is rumored that the reason Iacocca wanted to acquire the Jeep brand was for the Grand Cherokee that was under development. The vehicle became an extremely profitable model for Chrysler, and the nameplate remains in production today. Moreover, he also recognized AMC's recently modernized factories were an opportunity for increasing his company's production capacity. AMC's persevering dealer organization was an additional benefit to Chrysler in strengthening their retail distribution, with a large number of dealers who once sold AMC products selling Chrysler products yet today, nearly 20 years since the buyout. Moreover, Chrysler quickly incorporated AMC's underrated organization and management talent. Many of the new leading Chrysler engineers and executives rose from AMC ranks. Chrysler profited from the resources it gained with the acquisition of AMC.

The sale of American Motors came at an ironic time since the automotive press was very enthusiastic about the proposed 1988 lineup of Renault and Jeep vehicles, some even speculating AMC/Renault finally had a winning hand that could turn the company around.

After the sale of AMC, Renault departed from the North American market. However, it now has a vicarious presence through its investment in Nissan.

Continuing business legacy

AMC was forced to constantly innovate for 33 years until it was absorbed by Chrysler in 1987. Moreover, the lessons learned from this experience were integrated into the company that bought AMC. The organization, strategies, as well as several key executives allowed Chrysler to gain an edge on the competition. Even today, the lessons gained from the AMC experience continue to provide benefits to other firms in the industry. There are a number of legacies from AMC's business strategies.

Innovative strategies

American Motors' ability to formulate strategies were often evaluated by industry critics as "strokes of brilliance". According to Roy D. Chapin Jr., AMC realized they were up against the giants of the industry, so to compete successfully; they had to be able to move quickly and with ingenuity. An essential strategy practiced by AMC was to rely on outside vendors to supply components in which they had differential advantages. This has finally been accepted in the US auto industry, but only after each of the Big Three experienced the failure of attempting to be self-sufficient. Another example of AMC's agility was the ability of management to squeeze money out of reluctant bankers, even in the face of bankruptcy. These core abilities helped save the company from collapse and after each obstacle, give it the wherewithal to keep it operating. Ironically, AMC was never stronger than just before its demise.

Anticipate trends

AMC's managers anticipated important trends in the automotive industry. For example, it preached fuel efficiency long before auto buyers demanded it. AMC sought out partnerships in manufacturing and sales worldwide, decades before any of the international consolidations among automobile makers took place. AMC was first in seeking refuge with a foreign automaker, Renault, to keep operating. Although small in size, the company was able to introduce numerous innovations. Even one of AMC's most expensive new product investments (the Pacer) established many features that were later adopted by the auto industry worldwide. These included aerodynamic body design, space-efficient interiors, aircraft style doors, and a large greenhouse for visibility. AMC's four-wheel drive vehicles established the foundation for today's SUV market and the "classic" Jeep models continue to be the benchmark in this field. AMC was also effective in other areas such as marketing by introducing low rate financing. Chapin drew on his experiences as a hunter and fisherman and marketed the Jeep brand successfully to people with like interests. The brand developed a cult appeal that continues.

Reviving Chrysler

According to Robert Lutz, former President of Chrysler, the AMC acquisition was a big and risky undertaking. The purchase was part of Chrysler's strategic "retreat-cum-diversification" plan that he states did not have the right focus. Initially the goal was to obtain the world-renowned Jeep brand. However, Lutz discovered that the decision to buy AMC turned out to be a gold mine for Chrysler. At that time, Chrysler's management was attempting to find a model to improve structure and operations: "something that would help get our minds unstuck and thinking beyond the old paradigms that we were so familiar with". In this transformation, "Chrysler's acquisition of AMC was one of the all-time great moments in corporate serendipity" according to Lutz "that most definitely played a key role in demonstrating how to accomplish change".

According to Lutz (1993), while AMC had its share of problems, it was far from being a bunch of "brain-dead losers". He describes the "troops" at AMC as more like the Wake Island marines in battle, "with almost no resources, and fighting a vastly superior enemy, they were able to roll out an impressive succession of new products". After first reacting with anger to the purchase, Chrysler managers soon anticipated the benefits. To further solidify the organizational competencies held by AMC, Lee Iacocca agreed to retain former AMC units, such as engineering, completely intact. In addition, AMC's lead engineer, François Castaing, was made head of all engineering at Chrysler. In an unthinkable strategic move, Castaing completely dismantled the entrenched Chrysler groups. In their place AMC's "platform team" were implemented. These were close-knit cross-functional groups responsible for the whole vehicle, as contrasted with Chrysler's highly functional structure. In this capacity, Castaing's strategy was to eliminate the corporate administrative overhead bureaucracy. This move shifted corporate culture and agitated veteran executives who believed that Chrysler's reputation as "the engineering company" was being destroyed. Yet, according to the popular press, by the 1980s Chrysler's reputation was totally shot, and by Lutz's view only dramatic action was going to change that. In summary, Chrysler's purchase of AMC laid the critical foundation to help re-establish a strategy for its revival in the 1990s.

Lessons learned

Perhaps most interesting is that top managers at Chrysler after the AMC buyout appear to have made errors similar to those by AMC. For example, Chrysler invested heavily in new untested models while not keeping up its "bread and butter" lines. DaimlerChrysler has run into the same problem of having too many platforms. After the buyout of Chrysler, Mercedes Benz managers were protective of their designs and components. This created needless costs. They could have observed the experience of Nash and Hudson merger to help achieve manufacturing efficiencies and savings from component sharing.

The AMC beat also goes on at General Motors. GM recruited a new executive team to turn itself from near bankruptcy. Among the new strategists at GM is Lutz, who brought an understanding of the importance of passion in the product design. Lutz has implemented a new thinking at GM that incorporates the systems and structures that originated from AMC's lean and focused operations.

Renault implemented the lessons it learned from its investment in AMC. The French firm took a parallel approach as it did with its initial ownership of AMC and applied it to resurrect the money-losing Nissan automaker in Japan.

Legacy of products

Passenger automobiles

Chrysler revived the "Spirit" name dropped by AMC after 1983 for use on one of its A platform cars, (the Dodge Spirit) from 1989 to 1995. The planned Renault Medallion was sold as the Eagle Medallion in 1988 and 1989. A Renault/AMC concept, the Summit (slated to replace the Eagle station wagon), was produced by Mitsubishi Motors beginning in 1989. The planned all-new 1988 Renault Premier, a joint development effort between American Motors and Renault, and for which the Brampton Assembly plant (Brampton, Ontario) was built, was sold by Chrysler as the 1988-1992 Eagle Premier, with a rebadged Dodge Monaco variant available from 1990-1992. The full-sized Premier's platform was far more advanced than anything Chrysler was building at the time. After some re-engineering and a re-designation to Chrysler code LH, the Eagle Premier went on to form the backbone of Chrysler's passenger car lineup during the 1990s as the Chrysler Concorde (another revived AMC model name that was briefly used by Plymouth in the early 1950s), Chrysler New Yorker, Chrysler LHS, Dodge Intrepid, and Eagle Vision. The Chrysler 300M was likewise a Premier/LH-derived car and was initially to have been the next-generation Eagle Vision, until the Eagle brand was dropped after 1998.

Jeep vehicles

Jeep Comanche.

The American Motors-developed Jeeps survived for a long time under Chrysler. The Comanche pickup truck lasted until 1992, while the Cherokee remained until 2001 in the United States (the XJ Cherokee is still produced in China as the Cherokee 2500). Although it was not introduced until 1993, the Jeep Grand Cherokee was initially an AMC-developed vehicle. The 1997 through 2006 Jeep Wrangler is really a lightly updated development of the original American Motors-designed Wrangler introduced in 1986 for the 1987 model year.

Other traces of AMC remain within the present-day Chrysler. AMC's Toledo, Ohio plants continue to turn out Jeep Wranglers and Libertys as well as parts and components for Chrysler, Dodge, and Jeep vehicles (although Toledo Machining and Forge is slated for closure as of 2005). AMC's main plant in Wisconsin is still active, albeit heavily downsized, as the Kenosha Engine Plant, producing engines for several Chrysler Group products, including the Wrangler. The 4.0 L engine was used until the 2006 model year by DaimlerChrysler in the Jeep Wrangler. AMC's technologically advanced Bramalea Assembly and Stamping Plants in Brampton, Ontario now produce the best-selling LX-cars - the Dodge Charger, Dodge Magnum, and the Chrysler 300.

AM General, sold by American Motors in 1982, is still in business building the likewise American Motors-designed High Mobility Multi-Wheel Vehicle (HMMWV - "Humvee") for the American and allied militaries. AM General also builds the civilian variant - the H1 - and a Chevrolet Tahoe-derived companion, the H2, under contract to General Motors, new owners of the civilian Hummer brand.

Collectibility

As numbers dwindle and prices for popular collector cars continue to rise, more collectors are turning to AMC vehicles. The "collector" models (Javelin, AMX, and performance versions such as the 1957 Rambler Rebel, 1965-67 Rambler Marlin, 1969 Hurst SC/Rambler, 1970 Rebel Machine, and 1971 Hornet SC/360) have always had a small but enthusiastic following, and their prices are rising with the increasing interest. Many AMC models are now considered "future collectibles" and often appear on bargain lists in American collector car magazines.

Epilogue

During its long history, American Motors bought, sold and spun-off many components. Some of these still exist today, albeit in vastly changed forms.

• Kelvinator, the largely ignored half of Nash-Kelvinator, is essentially the last man standing. Sold off by American Motors in 1958 and now owned by Electrolux, the Kelvinator Company is still in business.

• Jeep is now a brand of the Chrysler Group, a privately owned unit of Cerberus Capital Management (Daimler continues to hold a 19.9% stake). Many Jeep models retained the mechanical specifications and styling cues that were developed by AMC well into the 1990s.

• AM General survives and is now owned by MacAndrews & Forbes Holdings and the Renco Group. It was organized as an LLC in August 2004.

• Wheel Horse Products Division is now owned by the Toro Company.

• Beijing Jeep was established by AMC in 1983 to produce Jeeps for the burgeoning Chinese market; the joint venture was inherited by Chrysler and continues to this day under the ownership of the new Chrysler. AMC's trials with the venture were the subject of a fairly well-known book on the venture, "Beijing Jeep", by James Mann.

Many of the facilities used to produce American Motors vehicles and sub-assemblies are still in use. These include:

• Plymouth Road Office Center located at 14250 Plymouth Road in Detroit, was originally built in 1926-27 by the Electric Refrigeration Corporation (Kelvinator). The original 600,000 square foot three-story plant facility and four-story administration building (with distinctive tower -- the NK logo has since been removed) was rebadged and home to Nash-Kelvinator from 1937-1954, and AMC World Headquarters from 1954-1987.
  • In the late 1940s, it was known as the Kelvinator Factory and General Administration Building, and produced refrigerators, electric ranges, and commercial refrigeration. Also airplane propellers were produced for the Defense Department during World War II.
  • During World War II, the Defense Department contracted with Nash-Kelvinator to produce 900 R-6 helicopters. As part of that contract, a 4.5 acre (1.8 ha) site north of the factory was used as the smallest airport in the world, as a testing facility. Nash-Kelvinator produced about fifty R-6s a month during the war, and when the contract was terminated at the end of the war, only 262 helicopters had actually been completed. An additional twenty were left in various stages of completion on the assembly line.
  • Today, the Plymouth Road Office Center is home to the new Chrysler organization's Jeep and (Dodge) Truck Engineering, or JTE. Engineering of Jeep and Dodge Truck (BoF or Body on Frame) platforms is performed there, as well as testing facilities and labs.

• Toledo North and South Assembly Plants - still in use by Chrysler. Still visible on most of the signage on the outside of the factories are areas where Chrysler painted over the AMC logo.

• Toledo Machining and Forge - still in use by Chrysler

• Brampton (formerly Bramalea) Assembly and Satellite Stamping Plants. - still in use by Chrysler. AMC designed this $260 million, 2,500,000 square foot plant, which was operational by 1986. This plant was designed and built by AMC for the specific purpose of building the Eagle Premier. Like the older Brampton plant (below), this facility was also part of American Motors Canada, Inc., and with the Chrysler buy-out in 1987, became part of Chrysler Canada Limited. The plant currently builds the LX series of vehicles including the Chrysler 300, Dodge Magnum, and Dodge Charger.

• Kenosha Engine Plant - still in use by DaimlerChrysler.

• American Center - AMC's corporate headquarters in Southfield, Michigan is still standing, still open, and still called "American Center". The original "American Center" signage at the top of the building remained until 2005, although the AMC logo has been removed. The signage has since been changed to Charter One. The 25-story building is rented to several different organizations and companies as office space. After the Chrysler acquisition, none of the office space was occupied by DaimlerChrysler or any other entity related to AMC.

• Canadian Fabricated Products Ltd. - An AMC division (part of AMC Canada, Ltd.) in Stratford, Ontario; established 1971 and sold post-buyout by DaimlerChrysler in 1994; produced automotive interior trim.

• Guelph Products - An AMC division (also part of AMC Canada, Ltd.) in Guelph, Ontario; opened in 1987, and subsequently sold by Chrysler in early 1993; the operation supplied moulded plastic components to the Brampton Assembly Plant.

• Coleman Products Corporation - An AMC subsidiary in Coleman, Wisconsin. Manufactured automotive wiring harnesses for AMC and other automakers.

• Evart Plastics - An AMC subsidiary in Evart, Indiana. Manufactured injection-molded plastic parts (notably, grilles) for AMC and other automakers.

At least one major AMC operation is now completely defunct:

• Holmes Foundry, Ltd. - AMC's block casting facility located in Sarnia, Ontario, Canada. The plant was acquired by AMC in 1970, and was subsequently closed in 1988). Beginning in 1962, AMC contracted with Holmes Foundry of Sarnia, Ontario, to supply AMC with cylinder block castings. Holmes was established in 1918, by Mr. J. S. Blunt, and was called Holmes Blunt Limited. In those early years, Ford Motor Company contracted the plant for a steady supply of engine casting blocks. American Motors acquired twenty-five percent interest in the foundry in January of 1966. In July of 1970, AMC acquired 100% of Holmes Foundry. However, it was not until October of 1981 that Holmes Foundry finally became a Division of American Motors, Canada. Chrysler Corporation took ownership of the Holmes facility and its manufacturing business in 1987 as part of its acquisition of AMC; but closed the operation on September 16, 1988. The industrial facilities were cleaned of their environmental contaminants in 2005, in preparation for a new highway interchange to be built on the site.

Former Factory Facilities

• Danforth Ave (Toronto, Ontario) Plant - Inherited from Nash. This plant was purchased by Nash from Ford of Canada in 1946. The first Canadian-built Nash rolled off the line in April, 1950. Upon the formation of American Motors in 1954, the plant assembled 1955 Nash and Hudson Ramblers (2- and 4-door sedans); as well as Nash Canadian Statesman and Hudson Wasp (4door sedans). In 1956, the plant continued to assemble Nash and Hudson Rambler (4-door sedans and wagons) and the Nash Canadian Statesman (4-door sedan); but The Hudson Wasp was imported. That same year, American Motors Sales (Canada) Limited was formed - taking over Nash Motors of Canada Limited and Hudson Motors of Canada Limited. In 1957, AMC assembled the Rambler Six and Rambler Rebel V8 at the Danforth plant; but in July, 1957, AMC closed the plant and imported Ramblers into Canada until 1961.

• Tilbury, Ontario Assembly Plant - Another plant AMC inherited from the 1954 merger; this one via Hudson. Specifically, it was a contract with CHATCO Steel Products which actually owned the plant. American Motors ceased Hudson production at the Tilbury plant in 1955.

• Brampton Assembly Plant - AMC opened a plant in 1960 in Brampton, Ontario, Canada, and was part of American Motors Canada, Inc. In 1987, with the Chrysler buy-out, the division and the plant were absorbed as well, becoming part of Chrysler Canada Limited. The plant was closed in 1994 and sold to Wal-Mart for use as their Canadian warehouse. Note that this is a separate facility from the current Brampton (formerly Bramalea) Assembly and Satellite Stamping Plants nearby.

• South Charleston Stamping Plant - Owned by Park Corporation of Cleveland, OH since 1969. While AMC leased it, the plant stamped steel automotive parts. The plant was later leased to other auto companies. The plant was in the news in October 2006 as the most recent tenant, Union Stamping and Assembly, declared bankruptcy.

American Motors in popular culture

The company was famous for being the underdog independent among the "Big Three" giant U.S. automakers, which was a cause for analogies in other environments. It differentiated itself with unique products and market positioning throughout its history. Its products have been referenced, shown, used, and even spoofed in all forms of media during its existence, as well as after Chrysler's buyout. A few examples of multiple AMC models playing major roles in movies include the following:

• The James Bond movie The Man with the Golden Gun features a 1974 AMC Matador Coupe that converts to an airplane, as well as a corkscrew jump performed by a 1974 AMC Hornet.
• The Betsy (1978) was filmed at the Kenosha assembly plant and has footage of several 1978 Concords and Spirits being built.
• In the 1984 film Gremlins, there is an AMC Gremlin on the street with its flashers on in one of the first scenes.
• The movie Cars features some AMC and related cars, including the Hudson Hornet, Jeep, Eagle Talon, and Rambler Ambassador.
• American Motors vehicles figure prominently in the 2006 movie The Pursuit of Happyness.

AMC models and products

Subcompact

• 1958-1962: Metropolitan*
• 1970-1978: AMC Gremlin**
• 1979-1983: AMC Spirit
• 1981-1983: AMC Eagle (SX/4 and Kammback)
• 1983-1987: Renault Alliance based on the Renault 9.
• 1984-1987: Renault Encore - based on the Renault 11.

* - The Metropolitan was introduced by Nash in 1954.
** - The Gremlin was the company's first modern subcompact.

Compact

• 1958-1962: Rambler (includes Rambler, Rambler Rebel, Rambler Classic)
• 1958-1969: Rambler American
• 1968-1970: AMC AMX
• 1968-1974: AMC Javelin
• 1970-1977: AMC Hornet
• 1975-1980: AMC Pacer
• 1978-1983: AMC Concord
• 1980-1988: AMC Eagle
• 1988: Renault Medallion - (based on the Renault 21)

Mid-size

• 1958-1965: Rambler Ambassador (1958-1962 also known as "Ambassador by Rambler")
• 1963-1966: Rambler Classic
• 1965-1966: Rambler Marlin, AMC Marlin
• 1967-1970: AMC Rebel
• 1971-1978: AMC Matador
• 1979: AMC Borgward Isabella

Full size

• 1966-1974: AMC Ambassador
• 1967: AMC Marlin
• 1988: Renault Premier

Engines used by AMC

• 1953-1956:
  • 250 in³ (4.1 L) AMC V8
  • 252 in³ (4.1 L) Nash I6
  • 184 in³ (3 L) Nash I6 (Rambler)
  • 320 in³ (5.2 L) Packard V8
  • 352 in³ (5.8 L) Packard V8
• 1956-1966:
  • 287 in³ (4.7 L) AMC V8
  • 327 in³ (5.4 L) AMC V8 (used by Kaiser until its acquisition in 1970)
  • 196 in³ (3.2 L) Rambler I6 (L head and OHV version)
  • 199 in³ (3.3 L) Typhoon Six I6
• 1967-1970:
  • 199 in³ (3.3 L) Typhoon Six I6
  • 232 in³ (3.8 L) Typhoon Six I6
  • 290 in³ (4.8 L) (Ending in 1969)AMC V8
  • 304 in³ (5.0 L) (Beginning in 1970)AMC V8
  • 343 in³ (5.6 L) (Ending in 1969)AMC V8
  • 360 in³ (5.9 L) (Beginning in 1970)AMC V8
  • 390 in³ (6.4 L) AMC V8
• 1971-1980:
  • 121 in³ (2.0 L) AMC I4 ¹
  • 232 in³ (3.8 L) AMC I6
  • 258 in³ (4.2 L) AMC I6
  • 304 in³ (5.0 L) (Beginning in 1970)AMC V8
  • 360 in³ (5.9 L) (Beginning in 1970)AMC V8
  • 401 in³ (6.6 L) AMC V8

(In cars, 401 discontinued in 1974, 360 in 1978, 304 and 232 in 1980)

• 1980-1983:
  • 151 in³ (2.5 L) Pontiac Iron Duke I4
  • 258 in³ (4.2 L) AMC I6
• 1984-1986:
  • 150 in³ (2.5 L) AMC I4
  • 258 in³ (4.2 L) AMC I6
• 1987:
  • 150 in³ (2.5 L) AMC I4
  • 242 in³ (4.0 L) AMC I6

Also: Kaiser Jeeps used the AMC 327, Buick 225 ("Dauntless V6"), Buick 350 ("Dauntless V8"), Willys 134 I4 ("Hurricane").

¹ AMC contracted with Volkswagen to buy tooling for the Audi 2.0 L OHC I4. Major parts (block, crankshaft, head assembly) were initially purchased from Audi and shipped to the U.S. where final assembly was accomplished by AMC at a plant purchased specifically for production of this engine. Sales never reached numbers to justify taking over total production. AMC made several changes to the engine. They were prevented from using the Volkswagen or Audi names in association with the AMC assembled version by contractual agreement.

See also

• Amitron and Electron both experimental battery powered city cars designed by American Motors.
• AMC/Jeep Transmissions

References

• Conde, John (1976). The American Motors Family Album 1946-1975. American Motors Corporation. ISBN X-XXXXX-XXX-X.

• Thomas Derdak, Editor (1988). International Directory of Company History, Volume 1. St. James Press. ISBN 0-912289-10-4. {{cite book}}: |author= has generic name (help)

• Foster, Patrick (2004). AMC Cars: 1954-1987, An Illustrated History. Motorbooks International. ISBN 1-58388-112-3.

• Foster, Patrick (1993). The Last Independent. Motorbooks International. ISBN 0-87341-240-0.

• Foster, Patrick (1996). The Metropolitan Story. Kraus Publications. ISBN 0-87341-459-4.

• Foster, Patrick (1998). The Nash Styling Sketchbook. Olde Milford Press. ISBN 0-9662019-0-6.

• Fracassa, Hawke. "Roy D. Chapin Jr., ex-AMC chairman gambled to save Jeep". The Detroit News. August 7, 2001

• Gunnell, John, Editor (1987). The Standard Catalog of American Cars 1946-1975. Kraus Publications. ISBN 0-87341-096-3. {{cite book}}: |author= has generic name (help)CS1 maint: multiple names: authors list (link)

• Higgins, James V., "Roy Chapin Jr. mastered how to survive in auto industry". The Detroit News, August 12, 2001

• Lutz, Robert A. (1999). Guts: The Seven Laws of Business That Made Chrysler the World's Hottest Car Company. John Wiley & Sons. ISBN 0-471-35765-0.

• Mann, Jim (1997). Beijing Jeep: A Case Study of Western Business in China. Perseus Publishing. ISBN 0-8133-3327-X.

• Mays, James C. (2001). Rambler Canada: The Little Company That Could. Syam Publications. ISBN 0-9685864-7-3.

• Mitchell, Larry (1994). AMC Buyers Guide. Motorbooks International. ISBN 0-87938-891-9.

• Taylor III, Alex. "Finally GM is looking good". Fortune, Vol. 145, Nr. 7, 2002, pp. 69-74

• Zinn, Chris L. (2002). AMX Photo Archive: From Concept to Reality. Iconographix. ISBN 1-58388-062-3.

External links

Clubs

• AMC Rambler Club, Inc. - recognizes 1958 through 1969 Rambler-era cars.
• American Motors Owners Association - recognizes all AMC-produced vehicles from 1954 through 1987.
• AMC Club of Finland

Restoration, history & general information

• AMCArchives.org An AMC-specific Wiki
• AMCyclopedia.org - an extensive collection of documentation, focusing on history and restoration.
• American Motors Owners' Association main links page - AMC major sites, restoration parts sources, etc
• AMXFiles.com - AMC History on AMXfiles.com
• American Independent Magazine - AMC/Rambler history and restoration/modification info
• [1] The history of the AMC Eagle
• [2] AMC/Rambler Discussion Forum

Discussion

• The AMC-List - an email list dedicated to supporting the preservation of AMC automobiles.
• The American Motors Forum - an online AMC forum
• The AMC Eagle forum - an online forum for AMC Eagles from 1980-1988
• The AMCForum - another AMC forum

Other links

• Jeffery Elementary School, Kenosha, WI - A Kenosha Unified School District (KUSD) primary school named after Thomas B. Jeffery. Perhaps fittingly, the school's team name is the "Jeffery Gremlins" and their logo is a copy of the AMC Gremlin logo.
• AMC's Holmes Foundry - labor issues on the Canadian Auto Workers site
• Science & Engineering magazine - Environmental cleanup at Holmes Foundry

Photo galleries

• RemarkableCars.com

• Collier Motors
  • Collier Motors - The Last "Surviving?" AMC Dealership
  • A Blog post on the dealership, with a different set of pictures