American Motors
1954-1987

The 1980s

The year 1980 showed AMC's turn towards economy. The Jeep CJ came with 2.5l four and four-speed manual trans as standard. Automatic transmission could no longer be combined with permanent all wheel drive. Optional the 4.2 and 5.0 engines were available; the latter was not being ordered often anymore. The Cherokee and CJ got free-wheeling hubs and part-time AWD as standard, Quadra-Trac as option.
New was the Eagle line, kind of. It was based on the Concord. What made it special was that the body was lifted up a bit and that it got a latest technology permanent AWD with viscous coupling and thus initiated a whole new group of cars being fancy again at the moment. The concept was unique in 1980 (the Subaru station wagon, being the only other car with AWD, had a primitive part time AWD lacking a center differential) and was adapted in a pretty similar way to BMW's 325iX in 1986. The last 1000 Pacers got delivered in 1980 (all had been built the year before). Concord and Spirit were all what was left of AMC's car line. The 3.8 engine was discontinued as it was to close to the 2.5, powerwise. The only alternative to the 2.5 was the 4.2 now. The 5.0 could only be had in Jeeps. All AMCs got Ziebart rust protection as standard.
Decreasing Jeep sales led to the decision to let Brampton factory produce cars again.

Recession hit AMC real hard. A record loss of 155 million dollars was reported in 1980. This time it wasn't because of faulty decisions. All American car manufacturers reported losses, but AMC was hurt the most, not only because of tight finances, but also because of its model line. AMC stood and fell with Jeep, and Jeep sales dropped greatly.
Although Eagle buyers had to be put on long waiting lists, AMC dropped in American sales statistics to number 5, behind Volkswagen.
In the end of 1980 the alternatives were to get out of business or to give Renault another big piece of the cake. In 1981 Renault owned 46.6% of AMC.

Strong efforts were made to increase fuel economy. Jeep bodies were redesigned to reduce drag. Torque converters got lock-up devices. New in the program was the Scrambler, a pickup version of the CJ.
A smaller Eagle on base of the Spirit was offered, versions were called SX/4 (hatchback) and Eagle Kammback. The 4.2 liter six was modified and now more efficient and lighter by 40 kilograms.

The big news was the Renault 18i that played in the same league as the Concord but attracted a different group of customers. With fuel injected four cylinder engine, front wheel drive and a weight optimized body it was one of the most efficient cars of its class, and besides that it offered a roomy interior and French comfort. With all those talents it had to be successful.
The Eagle was now available with Select Drive, a part time AWD intended to reduce fuel consumption. A manufacturer in Florida produced a Concord convertible called Sundancer.

In June Gerald Meyers told the public that in the future Renault would be responsible for the construction of AMC cars. AMC's engineers would exclusively care for the Jeep and Eagle lines. At the same time it was recognized that nobody wanted to buy the Renault 18, so its price was lowered, as were the prices of all other AMCs (those by 10%).
In January, 1982, Gerry Meyers left AMC although he had signed a four year contract with Renault the year before. His job was taken by Paul Tippet, former president of American Motors. Jose J. Dedeurwaerder, a Renault manager, became new president of AMC.

In the meantime AMC had to beg its dealers to stay, feeding them with hopes on the new joint venture car that was already in the testing stages. As there were no new models, marketing had to concentrate on other things. The Ziebart rust protection was strongly promoted, as were the Buyer Protection Plan, the 100% galvanized body panels, the new 5-speed transmission (Borg-Warner) that, when connected to the four cylinder engine, made a fuel consumption as low as 6.35l/100km possible. While the big Jeep Wagoneer still kept selling well, sales of the smaller Cherokee went down, a logical consequence of the recession, as it weren't the wealthy buyers of Wagoneers that were hit the most, but the middle class Cherokee buyers.

The Renault 18 was accompanied by a sporty coupe by the middle of the year: the Fuego. It was intended to compete with the Toyota Celica and the like. The LeCar now could be ordered with four doors, but still not with an automatic transmission.

The Last AMC

Wild speculations had been made on how the new car, developed by Renault and AMC, would be named. AMC? AMC-Renault? Renault? Finally the bomb exploded: The new and so badly desired AMC was called Renault Alliance (Europe's R9/11).
It was the right car at the right time: front wheel drive, economic fuel injection, rack & pinion steering, disc brakes, complete instruments, nice interior and a modern, boxy design. 20 years after the 63 Rambler finally an AMC (err?) was rewarded "Car of the Year". Alliance sales rocketed and compensated the losses other models made. The Fuego sold well, but the R18i was a fiasco, mainly because of its desastrous quality.
In the middle of the year Concord and Spirit were discontinued. AM General was sold, mainly because of political reasons. The pentagon had problems with the fact that a company making military equipment for the USA was controlled by the management of a French governmental company.

From now on events started overtaking themselves:

Jeep Cherokee Laredo, 1982

Jeep Cherokee Laredo, 1982

In 1985 the public again didn't want what AMC offered. Now that AMC had a line of efficient, economical cars the public had money again and by all means wanted to spend it. Fuel was cheap again, so there was no demand for the small, lame Alliance. People wanted big and fast, and production and marketing weren't prepared. Sabotage of angry workers at the Toledo plant taking revenge for not getting higher wages as promised, added to AMC's misery.
Again gossip kitchen was cooking on big flame:

Whatever, Paul Tippet left AMC and was replaced by a French named Pierre Semerena. The Jeep line reached peak after peak, and AMC management started making plans for the change of the millennium. Dedeurwaerder saw a necessity for a new plant to replace Kenosha's outdated facilities. The Japanese were showing to the world how to produce efficiently, and that meant big buildings and short distances and not vice versa as it was in Kenosha.

No big changes were made to the cars in 1986, short of the fact you could barely find any AMC badges on the Eagles. Some news regarding Jeep: A pickup version of the Cherokee, the Comanche, was released. The CJ-7 was replaced by the Wrangler, which looked similar but had almost nothing in common with it. The only carry-overs were the engine, everything else was new and "60 minutes"-compatible.
Dedeurwaerder left, Joseph Cappy came. A contract with Chrysler was signed: The Kenosha plant would produce the Chrysler Fifth Avenue, Dodge Diplomat and Plymouth Gran Fury.
The Renault GTA, a Golf GTI chaser, was presented. The Encore was rebadged Alliance Hatchback. Nobody wanted to buy it, why then an extra name for it?

In 1987 the new 4.0 six saw the light of the world. It was based on the 4.2 block but provided 173hp and 300Nm of torque, was cheaper to produce as GM's 2.8 and allowed 2,300kg of towing capacity. A four-speed automatic transmission of Aisin Seiki (Japan) shifted smooth and operated efficiently.
The Eagle was still there, without any mention of AMC. It was just the Eagle now.

In March, 1987 finally it became reality: Chrysler was about to buy AMC. Chrysler's boss Lee Iacocca was swimming in money and considered AMC's recently modernized factories a great possibility to increase production capacity. Renault parted from AMC at a time when it just had gotten rid of its major problems and begun having a perspective again. An AMC executive commented that strange behavior as follows: "As if after nine months Renault decided it didn't really want to be pregnant". In September all AMC and Renault cars were renamed "Eagle". American Motors became the Jeep/Eagle division of Chrysler. Chrysler was obliged to buy parts from Renault for a couple of years and make cars out of them.

At December 14, 1987 the last AMC, an Eagle Wagon, rolled off the assembly line.

Lee Iacocca, by the way, didn't hesitate to sit down on a bulldozer in front of the press and plow a depot of AMC parts down to the ground. Chrysler still profits from the resources it gained with the acquisition of AMC. Leading Chrysler engineers and executives are former AMC people. The Jeep line long into the 1990s still showed the concept of the early eighties.
Late reparation for Chrysler's behavior regarding AMC is that Chrysler got bought itself. And here's where the name is mentioned the last time: by Daimler-Benz.

Could things have turned out differently? AMC ran out of money in the end. Together with Renault, AMC might have had a future as manufacturer of offroad vehicles, vans, and all wheel drive Renaults. Last but not least politics prevented further collaboration. The Eagle line, conceptually based on an early 70s design, had reached the end of its potential. AMC's last independently conceived cars had not been successful.

Adepts to AMC history still discuss fervidly who to blame. Some accuse to Roy Abernethy for his luxury brand strategy. Others consider this the only way to go. In my humble opinion, a possible solution would have been to become a niche brand again, under the roof or in cooperation with a big company to get the technology exchange necessary. The decisions of the 1960s and 1970s, which are prone to be considered short-sighted of plain wrong, may, from these days' perspective and not knowing the future, well have been correct. With as thin a capitalization you are not supposed to wrongly foresee the future. The last couple of years show especially regarding the automotive industry, that, sophisticated scenario analysis and forecast calculation and all, many times things turn out differently than anybody thought. Those who know American Motors' history will recognize a lot of parallels to today's car makers. They will see that today similar decisions are made which already were not helpful decades ago. Maybe no one learned from former mistakes; but then, maybe beyond some point there's nothing you can do. Companies have a life span, too, and only the good die young.


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Last modified: Sun Apr 18 18:29:38 CEST 2010