History of AMC
The automotive industry landscape in the United States wasn’t always composed of “the Big Three” (Ford, General Motors, and Chrysler), there was a time when four major manufacturers existed. The fourth was American Motors Corporation or AMC. AMC no longer exists today but it made some great cars despite a lot of tough luck. In this article, we will look at the history of this quintessential American car manufacturer.
AMC formed in 1954 when Nash-Kelvinator Corporation and the Hudson Motor Car Company merged together. At the time, it was the largest corporate merger in U.S. history. Like General Motors, it had a number of different divisions that manufactured distinct brands. 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.
While they were quite prosperous in the late 1950s and 1960s, by the mid-1970s, AMC was encountering financial trouble. One of the problems was supply chain oriented. Its main factory in Kenosha, Wisconsin, was the oldest in the country, and it was truly antiquated. Assembly points were strewn all with components and assembled cars having to make treks all over the city before final assembly.The other manufacturers were in Detroit and they 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 crisis hit. The compact little Pacer, while better on fuel than the Ambassador, still had a thirsty straight-six engine that couldn’t compete with the thrifty little 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 foreign buyer, much like its competitor, Chrysler, would do 20 years later. In December of 1980, Renault, which was owned by the French government, purchased AMC.
Renault immediately set about fixing what was wrong, which was a lot. They streamlined production and manufacturing, which generated some of AMC’s highest costs. They 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 made in Wisconsin.
With Reagan in the Whitehouse, 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. As the economy began to recover, people wanted bigger cars again, which AMC did not have much of.
According to Thompson CDJR of Edgewood, MD, a full-service Chrysler, Dodge, Jeep, Ram dealer, 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. Eagle struggled on for a few years but 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.