American Motors (AMC) was formed in 1954 by the merger of Nash-Kelvinator and the Hudson Motor Car Company. Nash had recognised that the Big 3 being General Motors, Ford and Chrysler were going to be hard to beat without economies of scale and they found Hudson to be a willing partner to start the process. With the completion of the merger, the new AMC was able to reduce the price of Hudson models by having reduced the costs of components.
Hudson’s were redesigned to accommodate more Nash parts and the group negotiated with Packard for the use of their engines. At the same time that AMC was formed, Packard and Studebaker merged as the manufacturing footprint shrunk to accommodate the market.
At the time of the creation of AMC, Nash was selling the Metropolitan, a 2 door coupe and convertible built in the UK and used Austin 1200 and 1500cc motors. It was designed in the States and the first order was for 10,000 units. After the merger, the Metropolitan became a Hudson as well. In addition prior to the merger, Nash had resurrected the Rambler name for a series of models that were styled in a similar fashion to the Metropolitan. The other half of Nash, Kelvinator, made household white goods.
Hudson had two models at the time of the merger, the Wasp and Hornet. The Hornet had a 5 litre, 6 cylinder motor and had been very successful in motor sport due to its power and handling abilities. The Wasp was a similar shaped and powered car. The Hornet gained the Packard V8 after the engine deal was done.
The relationship with Packard only lasted a couple of years as AMC had designed its own V8 and they replaced the Packard engine and gearbox combination with their own engine and GM’s HydraMatic gearbox.
Nash and Hudson remained as separate brands until 1957 although they shared models in a classic badge engineering exercise. The following year the two original brands were dropped in favour of the Rambler brand that became dominant with models such as the Rambler Six, Rebel V8, Ambassador by Rambler and the Metropolitan.
AMC didn’t want Rambler to copy the Big 3 by building big and constantly changing models, so they concentrated on the sharing of components between the models to reduce costs. This worked well until the CEO resigned in 1962. George Romney, the father of Mitt Romney who ran for the Democratic nomination during the Presidential race of 2008, resigned to run for the Governership of Michigan. The new CEO decided to target the Big 3 head on by lots of redesigns and bigger more powerful models. The Rambler name was slowly dropped in favour of AMC and money was spent to compete harder.
Five years after becoming CEO, Roy Abernethy was deposed by Roy Chapin Jr – Chapin Snr had been CEO of Hudson and his son set about regaining market share by lowering pricing on the entry level Rambler, adding in models to compete head on with the Big 3 and raising cash by selling the Kelvinator white goods division. He also did a deal with Renault to sell kits so that the French could sell a luxury car in France.
In 1970, AMC bought Kaiser-Jeep with their iconic 4WDs and moved their military equipment to a new division. The 1970s car industry was full of ugly designs and AMC had their fair share, in fact pretty much all of their designs apart from Jeep were ugly. They produced cars like the Gremlin, Hornet and Matador. Strangely, even though they were pug ugly, they sold really well!
Then the 1973 Oil Crisis happened and sales dropped as the cars were thirsty, so AMC did a deal to buy 2 litre engines from Audi that were more fuel efficient. Sadly they were more expensive than their own motors and didn’t sell well. The late 1970s were also a difficult time for AMC, their market share in the US dropped lower than 2% and they were haemorrhaging cash. Like Chrysler in a later decade, the only brand that was keeping the company afloat was Jeep. Buyers have always loved Jeeps – my father owned four AMC Jeeps from about 1974 and I owned two Chrysler built versions in the late 1990s.
To try and save the situation, AMC management struck a deal with Renault to build the Renault 5 in the US, providing the French company a foothold into the market in return for a big sack of cash and credits. Renault took a 22% stake in AMC as well and this worked for a while and AMC made some good money but then the rot set in again with the general economy sliding and the rise of the Japanese manufacturers hitting sales.
Renault stepped in, put in some senior management and turned the company around whilst increasing their stake to 49% – they brought in new models including a new Jeep Cherokee, a compact SUV rather than the big older version – and they did a deal to build Chryslers in the AMC factories to help fill production capacity. They also sold the military equipment division, renamed AM General. AM General’s recent claim to fame is the Hummer.
Unfortunately, Renault was also struggling during the early 1980s and was looking to divest AMC to save themselves. In the meantime, Chrysler was sniffing around Jeep – the only continuously successful brand. So in 1987, Chrysler bought AMC, renaming it Jeep-Eagle and the history of another group of brands came to a halt.
Jeep still remained successful whilst the parent, Chrysler, struggled through another two European tie-ups with the second emulating the deal that AMC did with Renault – FIAT taking a controlling interest and restructuring everything again.