American Motors Corporation – a Short History

motor_companyThe automotive business in the United States wasn’t always composed of “the Big Three” (General Motors, Ford, and Chrysler), there was a time when four major manufacturers existed. The fourth was American Motors Corporation, generally known as AMC. AMC is no long with us but made some great cars. In this article, we will look at the history of American Motors Corporation.

The Beginning of AMC

AMC was formed in 1954 when two independent car manufacturers, Nash-Kelvinator Corporation and the Hudson Motor Car Company, merged together.  This was a big deal at the time because it was the largest corporate merger in U.S. history.  Because it was made up of various smaller companies, like General Motors was, it had a number of different divisions. For example, GM had brands like Chevrolet, Cadillac, Pontiac and Oldsmobile. AMC had brands like Jeep, Rambler, and Nash. It also very proudly sold cars under the AMC name.

The 1970s –not so good

While AMC was quite prosperous in the late 1950s and 1960s, the 1970s were different.  Things weren’t so rosy. One of the problems was supply chain oriented. AMCs main factory in Kenosha, Wisconsin was old and antiquated. Assembly points were strewn all over Kenosha with components and assembled cars having to make treks all over the city before final assembly. The other manufacturers were in Detroit and had far better developed supply chain operations.

Then there was some poor timing when key models were introduced in the 1970s. The enormous AMC Ambassador was introduced in 1974 just as the Saudi oil embargo hit.  The little Pacer, while better on fuel than the Ambassador, still had a thirsty straight-six engine. It couldn’t that compete with the thrifty little cars four cylinder cars the Japanese were starting to bring over.  By 1976 and 1977, the company was losing money.  Sales continued to shrink, and market share had dwindled to less than 2%. AMC began to look for a buyer. In December of 1980, Renault purchased AMC.

Renault steps up

Renault immediately set about fixing what was wrong. They streamlined production and manufacturing, which generated some of AMC’s highest costs. They also brought in badly needed new management at the top. The first new model to be born to the new Renault-owned AMC was the front-wheel drive Alliance, which was basically a Renault. AMC continued along in the 1980s. Most of its offerings were small cars, which was exactly what the car buying public wanted in 1970s, but not so much for the mid-1980s. The problem that Holt Chrysler of Arlington, TX, tells us is that as the economy began to recover, people wanted bigger cars again and AMC wasn’t making them.

Chrysler Corporation

Sensing an opportunity, in August 1987 Chrysler Corporation bought AMC from Renault. Lee Iaccoca, Chrysler Corporation’s president at the time, immediately turned AMC into its Jeep-Eagle division. The Eagle division struggled on for a few years and then was dropped. The real prize for Chrysler was the Jeep division, anyway.  Today, the Jeep division remains one of the major gems in Fiat-Chrysler’s brand lineup.

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