RF stopped by to respond to our story, “Pat Foster barks up wrong tree by lauding an AMC Gremlin GT with a 360 V8.” Well, sort of. He seemed to be more interested in answering a meta question than addressing the article’s specific topic. Thus, I thought I would present RF’s comment as a separate post. And because it raises some interesting auto history questions, I’ll offer my take afterwards:
“What would have saved AMC?
1. Industry-leading rust resistance.
2. Front-wheel drive.
3. Four-cylinder engine.
4. Industry-leading fuel economy, including with an automatic.
5. Industry-leading reliability.
6. Quiet comfortable non-chintzy interior.
7. Adequate cargo space that’s easy to access, without overall size bloat.
8. Headroom and legroom for tall drivers, without overall size bloat.
9. Air conditioning as a standard feature (economy of scale).
10. Industry-leading safety.
11. Value pricing.Doing all that without the budget nor infrastructure was impossible.”
What does it really mean to ‘save’ an automaker?
Indie Auto presents a fair number of counterfactuals, but I try to avoid stark “X would have saved” pronouncements. For one thing, my sense is that the course of automotive history does not tend to pivot on one neat trick. An automaker can come out with a car that appears to check many of the right boxes but ends up not selling as well as expected because the styling, marketing or initial manufacturing quality missed the mark. Or perhaps the timing of the car’s introduction was off.
By the same token, if one’s goal is serious historical analysis rather than barstool philosophizing, then we should define what “saving” an automaker means.
Also see ‘Joe Ligo’s third AMC episode suffers from analytical weaknesses’
As a case in point, one could reasonably argue that American Motors did not have strong prospects of remaining an independent automaker into the 1990s while still entertaining the idea that passenger-car sales might have been much less likely to collapse in the late-70s if the roughly $100 million spent on the Matador coupe and Pacer (Foster, 1993) had instead gone to an expanded lineup of compacts based upon an updated Hornet platform.
I also tend to be skeptical of scenarios that imply that there was only one best way for an automaker to be successful. For example, I would question the conventional wisdom that AMC needed to switch to front-wheel-drive subcompacts to survive in the 1980s. The automaker might have instead tried to move its rear-wheel-drive compacts a bit upmarket as a more affordable American BMW, albeit with a greater emphasis on all-wheel-drive crossover variants.
Manufacturing capacity was as important as car design
Another factor that doesn’t tend to get as much attention as it deserves is economies of scale in production facilities. I suspect that one of the most important steps American Motors could have taken to remain financially viable through the turbulent late-70s and 1980s would have been to integrate its passenger-car and truck production into one main plant. That might have also led to more component sharing between passenger cars and Jeep trucks.
This might seem like a nerdy subject to car buffs focused on product attributes, but how American Motors structured its manufacturing operations played a major role in its financial struggles from 1975 onward. For example, in 1980 the automaker lost a then-catastrophic $208 million on North American sales of around 203,000 passenger cars (including Renaults) and 67,000 Jeeps (Foster, 2013).
The financial picture during down years such as 1980 might have looked very different if Jeep production had been moved out of its Toledo, Ohio plant to the automaker’s Kenosha, Wisconsin facility. That might have constricted capacity during peak years, but American Motors could have used its Brampton, Canada plant to backfill as needed. And if that still wasn’t enough, lost sales during peak years were arguably less damaging than debilitating losses during down years.
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Foster, Patrick R.; 1993. American Motors: The Last Independent. Krause Publications, Iola, WI.
- ——; 2013. American Motors Corporation: The Rise and Fall of America’s Last Independent Automaker. MBI Publishing Co., Minneapolis, MN.
ADVERTISEMENTS & BROCHURES:
- oldcarbrochures.org: AMC Eagle (1985); Jeep (1980); Renault Alliance (1985)
With better product and fewer outlandish risks like the Pacer I think AMC might have made it a bit longer as an independent. Even a successful AMC would eventually gotten absorbed or merged into another car company.