American Motors Corporation (AMC) was an American automobile company, formed in 1954 by the merger of Nash Motors and Hudson. At the time, it was the largest corporate merger in U.S. history, valued at $197,793,366. It was bought out by Chrysler in March 1987.
The history of the company goes back to 1897 when Thomas B. Jeffery built his first automobile prototype, and then bought the former Sterlin Bicycle Factory in Kenosha, Wisconsin in 1900 to produce "Rambler" cars. The first production Rambler came off the assembly line in March 1902, making it thesecond 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.
The name of the car was changed to "Jeffery" in 1914 to honor its founder, who died in 1910. Charles T. Jeffery, his son, then ran the factory. He survived the sinking of the Lusitania (a British luxury liner torpedoed by the Germans in WWI) in 1915 and decided to spend the rest of his life in a more enjoyable manner. Charles W. Nash resigned from General Motors and bought the Thomas B. Jeffery Company in August of 1916, renaming it Nash Motors.
Nash Motors survived until its 1954 merger with Hudson to form AMC. The original plan was for Nash and Hudson to merge into AMC while Studebaker and Packard merged, and then, after the companies had settled down, for the combined companies to merge. Nash president George Mason believed that the last of the American independent car manufacturers, if they were to survive, would have to merge into one "last of the independents".
Due to the unexpected death of Mason, who had planned the series of deals, the second wave of mergers never happened. AMC cooperated for a year or two with its betrothed, using Packard engines in its products until a parts dispute ended the partnership in mid-1956.
The prediction was sort of correct; AMC lasted until 1988 while the last Studebaker was built in 1966. However, Studebaker never went out of business; it simply merged with other companies and got out of the automobile business.
AMC combined the Nash and the Hudson product lines. In 1956, AMC introduced the Rambler, which was sold under both the Nash and Hudson labels in its first year. In 1957, Nash and Hudson became Rambler. Although it was one of AMC's best-known products, the Rambler nameplate was dropped in 1969.
AMC produced a number of muscle cars in the late 1960s and 1970s, and in 1970, it introduced the Gremlin, the first American subcompact car. Also in 1970, AMC bought Jeep. The AMC Pacer, another well-remembered AMC product, followed in 1975. It was reportedly designed by having four people sit down and designing the car around them.
The Pacer was to be the next generation AMC, but sales dropped dramatically after the first couple years. It was planned to have a GM provided Wankel rotary engine, but when GM dropped plans to manufacture the engine AMC had to shoe-horn their existing in-line six into it. The Pacer was all new except for the drivetrain, sharing very few components with other AMC cars. This made it relatively expensive to produce, and when sales started falling cost per vehicle skyrocketed. The failure of the Pacer literally doomed AMC, as development and production costs drained corporate accounts of much needed capital. The Pacer was dropped during the 1980 model year.
AMC needed a new volume car with the failure of the Pacer and aging of their other designs. The only way to get a vehicle in short order with minimal cash layout was to court another auto producer. In 1979 Renault entered into a deal with AMC to sell Renault products in the US and to eventually build joint-venture automobiles in Kenosha. As part of the deal Renault purchased 5% of AMC stock and loaned AMC $135 million. Times were difficult for AMC at juncture of time. In order to protect its investment and keep AMC afloat, Renault announced that it was purchasing more AMC stock in September of 1980, increasing its share to 46.4%, which was a controlling interest.
In 1980, AMC introduced the Eagle, a four-wheel drive passenger car. It would become one of AMC's best-known products.
By 1982, AMC was struggling. Because AMC's AM General division was a major defense contractor, AMC sold off AM General in order to sell a controlling interest in AMC to Renault, which was owned by the French government. This was required before the U.S. Government would approve the stock purchase by Renault. AM General would re-appear in the consumer marketplace nearly a decade later, in 1991, as Hummer.
AMC's struggles continued after its partnership with Renault. In the early 1980s, its Jeep division popularized the compact sport-utility vehicle with its introduction of the downsized Jeep XJ Cherokee and Jeep XJ Wagoneer in 1983.
Renault itself was having financial troubles back home in France. French workers were being laid off while Renault was continuing to invest in AMC, building a new plant in Canada in 1986. This led to the assassination of the president of Renault, who felt the North American market was essential, in 1986. The new president set out to divest Renault of AMC and concentrate on matters at home.
In March 1987, AMC was purchased by Chrysler. AMC sold its last car in 1988. Chrysler then merged AMC into its Jeep/Eagle divsion. While Chrysler carried on with the Jeep brand and sold a pair of Renault-designed cars for five years under the Eagle nameplate (ironically, the AMC car by the same name wasn't kept), AMC as the world knew it ceased.