History of American Motors


AMC Logo 1969-1987

American Motors was purchased by Chrysler Corporation on March 2, 1987, which discontinued the brand name but continued some of the models under the Eagle marque.

The company traced its history to 1897 when Thomas B. Jeffery built his first automobile prototype and acquired the former Sterlin Bicycle Factory in Kenosha, Wisconsin, in 1900 to produce "Rambler" cars. The first production Rambler rolled out of the factory in March 1902, making it the second passenger car to be mass produced (over 1500 of the same make and model) in the U.S., one year after Oldsmobile and one year ahead of Ford.

After the founder of the company died in 1910, Charles T. Jeffery, his son, assumed control. The name of the car was changed to "Jeffery" in 1914 to honor its founder. Charles Jeffery survived the sinking of the RMS Lusitania, a luxury liner torpedoed in 1915, and subsequently resolved to spend the rest of his life in a more enjoyable manner. Charles W. Nash, who had resigned from General Motors, purchased the Thomas B. Jeffery Company in August of 1916, renaming it the Nash Motors Company. In 1954, Nash Motors merged with Hudson to form AMC, merging with Kelvinator Appliance along the way. George Mason, the architect of the merger scheme, believed that the only chance of survival for America's remaining independent automakers was for them to join forces in one large, mutibrand auto giant, able to challenge General Motors, Ford, and Chrysler as an equal. Mason's plan was for Studebaker and Packard to also join forces, and then, after the companies had settled down, for the two combined companies to merge into one under the American Motors banner. (NOTE: AMC authority Pat Foster challenges the credibility of this.)

Packard Motor Car Company did acquire Studebaker as planned, in 1954, and the resulting Studebaker-Packard Corporation cooperated with American Motors for a year or two, selling Packard engines to its would-be partner until a contractual dispute ended the alliance in mid-1956. But the final planned merger never happened. Studebaker-Packard was devastated by the loss of millions of dollars in Studebaker's Pentagon contracts after the Korean war ended (the contracts were awarded to GM). George Mason died in 1954, and George Romney killed any final hopes of a merger.

From there, American Motors was forced to compete on its own. Studebaker-Packard went out of business in the 1960s, by which time most of the post-war startup car makers were also gone. Only the Big Three and AMC remained.

American Motors combined the Nash and the Hudson product lines under a common marketing strategy and dealer network beginning in 1955. The fast selling Rambler model was sold under both the Nash and Hudson labels in its first year and would eventually become the mainstay of the company. The preexisting Nash product line was continued and the Nash Statesman and Ambassador were lightly restyled to become the "new" Hudson Wasp and Hornet. Hudson aficionados disliked the soft handling and ride of the "Hash" models and sales quickly plummeted. The only Hudson parts on the badge-engineered Nashes were the instrument cluster and engines. Hudsons continued to use Hudson L-head sixes except, while sharing the same Packard (and later American Motors designed) V8 engines as their Nash counterparts.

For the 1958 model year the Nash and Hudson names were dropped in favor of the popular Rambler badge, which now became a marque in its own right. The slow-selling, British-built Nash Metropolitan subcompact became its own standalone brand and struggled on for a few more years, sharing showroom space with Rambler, finally being dropped after 1962. The prototype 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" wheelbase Nash Rambler as the new Rambler American with only a few modifications. This gave Rambler a compact lineup with 100" (American), 108" (Rambler Six and Rebel V8), and 117" (Ambassador) wheelbase vehicles.

Although Rambler automobiles were among American Motors' best-known products, company executives attempted to replace the Rambler name with a new name that would better reflect the identity of the parent company. This was a rather dangerous move, replacing a well-known and respected product name for something unknown. Ramblers were best known as economy cars, and top AMC executives wanted to move the company a bit more up-scale. This led to confusion from which the company never recovered.

The 1966 Marlin and Ambassador were badged as "American Motors" products, then as "AMs" for 1967, and finally as "AMCs" for 1968. The Rambler brand was completely dropped after the 1969 model year in the U.S, although the Rambler name continued to be used in several overseas markets as either a model or brand name. The last use was in Mexico in 1983. AMC is generally thought of as the brand used for all American Motors passenger cars following the demise of Rambler, but the names "American Motors" and "AMC" seem to have been used interchangeably in corporate literature and on the cars themselves well into the 1980s. The branding issue becomes more complicated still, as the company's legendary all wheel drive passenger cars were marketed, at least initially as the "American Eagle", not AMC.

American Motors produced a wide range of products during the 1960s, which for the most part were relatively unremarkable. In a continuing quest to match the "Big Three" at every turn, American Motors produced totally conventional cars that were solidly-built and provided good value, but were purely average as far as styling and engineering were concerned. The company did develop some exciting entries for the decade's muscle car boom, most notable the AMX; while the Javelin served as the company's entrant into the pseudo-sporty "pony car" market created by the Ford Mustang.

Sales were strong during the 1960s, and the company posted healthy profits year after year. American Motors seemed poised to ride the wave of prosperity into the 1970s. Flush with cash after a highly successful decade, American Motors expanded its 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 line of military Jeeps and the DJ-Series postal Jeeps. The military and special products business was reconstituted as American Motors General Products Division, later reorganized as AM General.

The 1970s started off on a high note indeed, yet things quickly went sour for American Motors. 1970 marked the end of Rambler and the consolidation of all passenger cars under one distinct brand identity (more or less). It also marked the debut of the AMC Hornet range of compact cars.

Always looking for a way to stretch research and development dollars, American Motors used the Hornet platform and body shell to create one of the first American-built subcompacts - the AMC Gremlin, which arrived in the spring of 1970 as an early 1971 model. The Gremlin went on to become American Motors' best-selling passenger car with well over 700,000 units sold before the end of production in 1978.

The highly 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. Starting in 1974, the Matador mutated into two distinctive products with the same name. There were the sedans and station wagons, and the coupes, which looked completely different. After 1974 the Matador sedan and wagon took the place of the discontinued Ambassador as AMCs flagship model. An Ambassador had been made by Nash and AMC from 1932 to 1974, the longest used nameplate of any AMC product.

Although the Matador Coupe was an attractive package to some consumers, sales never lived up to expectations and the line was dropped after 1978. Contradictory figures from AMC, ranging anywhere from $350 to over $600 per car sold, for the Matador coupe's development and tooling costs, make it impossible to determine how much money, if any, AMC actually lost on the coupe, which shared few components other than the suspension and drivetrain with the sedans. Most of the tooling for the sedans and wagons dated back to 1967 and had long been paid for. By 1978 sales of the long-in-the-tooth design were low enough that it too was dropped along with the sleek coupe.

The AMC Pacer, introduced in 1975, was an innovative gamble and another well-intentioned entry into the market AMC seemed to know best. 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. Further passenger space was gained through AMC's ingenious"cab forward" design technology, introduced on the Pacer. Nicknamed a "fishbowl on wheels", the Pacer featured bulbous, wrap around window glass, accounting for 35% of the car's surface area, eliminating blind spots. Among other unique styling's, the passenger door was four inches longer than the driver's door (to facilitate curb-side back seat access).

American Motors planned to use a General Motors-built Wankel rotary engine for the Pacer, but was forced to use their existing 258 in³ I6 when GM aborted their rotary engine development program. The six resulted in poor fuel economy for the car's size, largely defeating the purpose of a compact. In addition, the Pacer was all-new except for the drivetrain, 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. The failure of the Pacer literally doomed AMC, as 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.

The Pacer was finally dropped after the 1980 model year. By that time, American Motors was on the brink of bankruptcy, forcing difficult cost-cutting. A whole new line of large prestige cars planned to replace the slow-selling Matador was cancelled. The aging Hornet was hastily face-lifted to create the "new" 1978 AMC Concord, the higher trim levels of which were intended to partially compensate for the departed Matador. The Hornet-derived Gremlin was lightly updated to create the 1979 Spirit coupe, while a Spirit sedan was created by tacking new front and back ends onto the Gremlin's 2-door center section. In a last-ditch attempt to relive past glories, the AMX name was revived for a lightly upgraded sports version of the Spirit sedan.

The Concord, though only a restyled Hornet, came at the perfect time. The public warmed up to the plush car, buying 121,293 that first year, compared to 77,843 Hornets in the year before (1977). Gas crunches may have convinced people to look at smaller cars, but they still wanted their comforts. The Concord had more sound insulation and isolation than the Hornet as well as more "creature comfort" options.

This round of facelifts and rebranding of outdated cars was hardly a permanent fix regardless of the initial success of products like the Concord. American Motors desperately needed truly new, modern products but lacked the capital and resources to develop them. The only alternative was to seek a foreign partner to invest in the business. In 1979, American Motors found a ready partner 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 $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. A new line of Renault-designed, modern front-wheel drive cars would be produced by American Motors at their Kenosha plant. The first new product resulting from this partnership was the 1983 Renault Alliance, a compact sedan. A virtually identical coupe 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, in the same way that Chrysler's merger with Daimler-Benz would technically make Chrysler a German car company.

Following the 1983 model year, the AMC brand was pared down to a single model - the revolutionary Eagle. From that point on, the focus of the company would be on the Renault and Jeep brands.

Introduced in 1980, the Eagle was a trend-setting 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. The drivetrain was, in fact, the world's first true full-time all wheel drive system. Not surprisingly, most Eagles were sold in snow-prone states. 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 AMC's styling, which dated all the way back to the 1970 Hornet.

In the early 1980s, the Jeep division popularized the compact SUV with its introductions of the downsized Jeep Cherokee and Wagoneer in 1983. These vehicles initially used the AMC four-cylinder engine and a General Motors-built 2.8 L V6. 1987 models used the "new" 4.0 L engine, derived from the 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 now discontinued AMC 360 in³ V8 (the engine and the Grand Wagoneer ceased production after 1991; the pickups were dropped after 1987). As mentioned above, the AMC Concord and Spirit were dropped after 1983, with no attempts at replacements. The AMC Eagle was continued, and in station wagon form lasted through the 1988 model year.

Because AMC's profitable AM General subsidiary was a major defense contractor, American Motors was forced to sell the business as Renault increased its ownership of AMC, since the US government would not allow a foreign government to own a significant portion of an important defense supplier. (Renault was partially owned by the French government.)

AMC's woes did not end with Renault's taking control. Renault itself was experiencing financial troubles of its own in France. The massive investment in American Motors (including construction of a new Canadian plant) forced cuts at home, resulting in the the closure of several French plants and mass layoffs. Public anger built against Renault's president, who believed strongly in the importance of the North American market. This was undoubtedly the primary motive behind his 1986 assassination. The company's new president set out to repair employee relations and put the company back on a sound financial footing through the divestiture of American Motors.

In March 1987, Renault's stake in AMC was purchased by Chrysler, along with the rest of the company's shares. Following a small run of 1988 Eagle station wagons, the AMC brand was dropped. The sale of American Motors came at an ironic time — 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.

As a replacement for AMC, Chrysler created the Eagle brand, taking the name from AMC's last product. The remains of American Motors were consolidated into the Jeep-Eagle Division of the Chrysler Corporation. While the Eagle brand would turn out to be a disappointment (Chrysler discontinued the brand in 1998), the Jeep brand was profitable, mostly because of the growing demand for SUVs in the 1990s following the introduction of the Ford Explorer.

Chrysler continued the Jeep XJ Cherokee with the 4.0 L engine (still used by Daimler-Chrysler in the Jeep Wrangler). The Spirit name, which was discontinued in 1983, was placed on one of Chrysler's A platform cars and was sold as the Dodge Spirit. 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 Bramalea plant was built, was sold by Chrysler as the 1988-1992 Eagle Premier, with a rebadged Dodge Monaco variant for 1990-1992. Incorporating the cab-forward design introduced on the 1975 Pacer, the Premier's platform was far more advanced than anything Chrysler was building at the time, and after some re-engineering and a re-designation to 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), Chrysler New Yorker, Chrysler LHS, Dodge Intrepid, and the 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.

The American Motors-developed Jeeps survived for some 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 developed by American Motors in the early 1980s as the successor to the XJ Cherokee, the Jeep Grand Cherokee is considered an AMC-developed vehicle although it received the Chrysler Pentastar badge. The current Jeep Wrangler, in production since 1997, 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 Daimler-Chrysler. 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. AMC's technologically advanced Bramalea Assembly and Stamping Plants in Ontario (recently completed at the the time of the Chrysler takeover) are still active, and 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) for 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.

The American Motors Corporation's death was recent enough that a handful of AMC Eagles are still on the roads under their original owners. Their numbers dwindle with each passing year, however, and since most AMC vehicles never really attained 'collector' status, cars fully restored by auto enthusiasts are also quite rare.

As numbers dwindle and prices for more popular collector cars continue to rise, some collectors are starting to pay more attention to AMC vehicles. Prices for the more popular collector models (Javelin, AMX, and a few specials such as the 1957 Rambler Rebel, 1965-67 Rambler Marlin, 1969 Hurst SC/Rambler, 1970 Rebel Machine, and 1971 Hornet SC/360), which have always had a small but enthusiastic following, are already rising at a rapid pace. It will be a long time before the "bread and butter" Hornets, Gremlins, Concords, and Pacers will be very collectible, but many AMC models are now considered "future collectibles" and often appear on collectible bargain lists in American collector car magazines such as "Hemmings" and "Collectible Automobile".

At least one AMC dealership, Collier Motors of Pikeville, North Carolina, is still in business - although at this point the dealership is largely overgrown with weeds and its cars are rusting where they sit.