(EXPANDED FROM 3/10/2017)
George Romey argued that the Rambler would never get the credit it deserved. Although his narrative is colored with sour grapes, I think it is worth building on.
In a 1994 presentation, the former CEO of American Motors argued that the reason why the Rambler has been undersold is that his successors didn’t believe in the car “and the philosophy that we relied upon to make the Rambler a success, which was to spread the tooling over as large of a volume as we possibly could” (Lehman, 2011).
The latter point tends to be underplayed by automotive historians. Even Patrick Foster (1993) has lauded Javelin while ignoring how it blew a hole in AMC’s economies of scale.
Romney’s decision to focus on a narrow lineup of cars went against the Detroit practice of fielding multiple brands with a wide range of body styles.
George Mason would have operated differently
Romney said that his “toughest decision” during his eight-year tenure “was whether or not to drop the Nash and Hudson lines and concentrate on the Rambler.” He did the latter — and “spread the tooling costs for a volume of Ramblers that reached the point where we were fully competitive with the Big three” (Lehman, 2011).
If Romney’s predecessor George Mason had not died in 1954 shortly after American Motors was formed, he was unlikely to have followed a Rambler-focused strategy. Mason saw compacts as auxiliary to big cars, so he would likely have invested in a redesign of big cars and fielded badge-engineered compacts for the Nash and Hudson rather than elevating the Rambler to brand status.
Romney concluded that it was a “great tragedy” that his successors “didn’t recognize the opportunity that we had and didn’t follow through on it. Because if they had, American Motors would be one of the top, big automobile companies in this country today. But they didn’t do that” (Lehman, 2011).
Romney didn’t acknowledge his biggest mistake
I find it hard to visualize how American Motors could have become a “top” automaker if Romney’s successors had stuck with his strategies.
Although it was theoretically possible when Toyota and Honda saw explosive growth in the U.S., they had advantages AMC did not.
The flip side to Romney’s hyperbole is that we can only speculate about how realistic it was. Historians have a tendency to “reify” the way things turned out. This is why counterfactuals can help us to see the limitations in our analysis.
One thing Romney didn’t acknowledge is that his strategy might have had more staying power if he had cultivated disciples. Operating as a one-man band was arguably his single biggest mistake as CEO.
NOTES:
This story was originally posted on March 10, 2017 and expanded on Aug. 30, 2025.
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.
- Lehman, Paul; 2011. “George Romney at the Nationals, July 7-10-1994: Part 2.” YouTube. Posted July 7; accessed July 15, 2013.
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- oldcaradvertising.com: Rambler (1956, 1961)
This presentation took place in 1994, a mere seven years after AMC was bought by Chrysler. If Romney was right, and he groomed men who shared his vision AMC just might still be alive in 1994. However, it just would have been a stay of execution. The Hornet platform was very elastic. However the dealers needed more than some me too compact no worse, but no better than the Big 3 offerings. Romney had ONE good idea. A nice, well appointed compact car for the second car market. It came out when four years worth of good used cars didn’t exist. and the parent company wasn’t on its last legs. 15 years later such cars both US and imported were available everywhere. A well appointed well engineered compact that isn’t a badge engineered Nova or Fairlane MIGHT have a chance.
We can only speculate as to whether Romney would have had only one good idea. If he had stayed at American Motors beyond 1962 or put in place a disciple, they would have needed to update the Rambler strategy to respond to changing market conditions, such as the rise of sporty cars and more reliable imports. Would AMC have kept on dishing out the same old thing?
I don’t think the answer is obvious. It’s true that executives can get into a rut once they are successful. However, remember how Romney settled on the Rambler strategy: He took seriously data on how suburbanization would change car-buying habits well before the Big Three.
In addition, he did show some capacity to adapt. Once Detroit came out with compacts, he decided that the next frontier was superior quality of manufacturing. His discussion of American Motors’ efforts in that area sound a whole lot like Toyota years later. And his talk about Rambler styling emulating the efficient but sophisticated quality of a Mercedes suggested that he better understood the import threat than many of his Detroit colleagues.
Might Romney or a disciple have switched to a front-wheel-drive lineup faster than the Big Three did? Might he have come out with new kinds of packaging such as the minivan? Who knows, but I think it safe to say that an emphasis on economies of scale and long production runs would have resulted in a lineup more like the Chrysler A-body compacts and less like the Matador coupe.
The irony of using Toyota here is that its strategy in the 60s/70s period was basically analogous to that of the one used in Detroit, and the opposite of what Romney preached:
– rapid model expansion into both new directions and gaps within the existing ones. In addition to expanding outward (Century into luxury cars, Sports 800/2000GT/Celica into sports cars, Hilux into small pickups, Land Cruiser J50 into large 4x4s, MiniAce and HiAce into vans), Toyota would keep introducing new models to slot between the existing gaps. After creating the Corolla to sit between the Publica and the Corona, and the Corona Mark II to sit between the Corona and the Crown, they started filling the gaps left by the gap-filling models: the Carina between the Corolla and the Corona, and the Starlet between the Publica and the Corolla. Even the vans weren’t safe from gap filling, with the LiteAce slotting between the MiniAce and the HiAce starting in 1970.
– rapid styling changes – between just 1965 and 1975 the Aichi automaker redesigned the Publica and the Corona twice, and the Crown three times. Some of the new arrivals ran on a similarly rapid cycle, with two all-new Corollas and two all-new Corona Mark IIs/Chasers coming out within 10 years of the first one.
In their home market they even did Mercury-level badge engineering – first renaming a variant of the E20 Toyota Corolla as the Toyota Sprinter to sell it via Toyota Auto Store and not Toyota Corolla Store, then doing the same with the Toyota Chaser (X30 Corona Mark II renamed for sale by Toyota Auto Store) and the Toyota Celica Camry (A40 Carina renamed for sale by Toyota Corolla Store).
I agree that Toyota adopted a more Detroit-like strategy than, say, Volkswagen in the 1970s. However, I would argue that the brand’s cars tended to be put together better and were more reliable than those of domestic brands.
In addition, although Detroit’s subcompact offerings in the first half of the 1970s could have somewhat comparable fuel economy, Toyota tended to have an edge in terms of variety of models. For example, it came out with four-door subcompacts much sooner than any of the Big Three. The Corona could be used as a family car in ways that the Pinto or Vega could not.
Toyota’s basic strategy was consistent enough that it developed a reputation in the U.S. that has held up remarkably well over the years. As a case in point, the Camry basically became the Rambler Classic of contemporary times — a family car that may have been rather dull but has always been a good value. It is not surprising to me that the Camry has survived while the Big Three’s family sedans have fallen by the wayside.
I’d venture there has never been a man (or woman, now) who’s taken over an automobile company with the meek ambition of being a disciple. Nobody laces up those Italian loafers thinking, “I’ll just carry on the old man’s vision.”Please. Every one of them has strutted into the corner office convinced they’re the second coming of Alfred Sloan, Harlow Curtice, or Lee Iacocca.
Once parked behind that Brazilian teak custom desk, they don’t see themselves as caretakers. They see themselves as saviors. Finally, the genius the company’s been waiting for has arrived! Cue the trumpets. Never mind that history’s junkyard is already piled high with the wreckage of such egos: James Roche and Roger Smith (GM), Bob Eaton and Bob Nardelli (Chrysler), Henry Kaiser (Kaiser-Frazer), James Nance (Packard), Paul Hoffman and Harold Vance (Studebaker), and even Henry Ford II and Iacocca himself. Titans in their own minds, tow-truck material in the rearview mirror.
Sure, a few of them had bright moments—enough to keep the PR departments busy polishing trophies and framing magazine covers. But in the end, every one left the company worse off than they found it. And some, hammer in hand and grinning like undertakers, nailed the lid shut on the very coffins of the brands they swore only they could save.
Perhaps I am not being clear about what I mean. Automotive management is like any other professional field — it has schools of thought. In other words, there are differing opinions about how a car company should be run. Romney’s approach deviated sharply enough from the traditional Detroit ways that it was doubly important for him to train the next generation of management in his particular school of thought. Because he apparently did not do that, it was all the more likely that his successors would shift back to the norm.
A related mistake that Romney made was that he tapped Abernethy to be his successor when he was very much steeped in the old-school way of doing things. So right out of the box Abernethy started to dismantle Romney’s approach in favor of effectively trying to copy the Big Three. It’s one thing to adapt to changing conditions, and quite another for Abernethy to throw away Romney’s approach wholesale.
Now, perhaps Abernethy was the best that Romney could come up with among the potential talent pool. If so, that illustrates how Romney had neglected to build a team. What’s odd is that Mason literally showed Romney how to go about grooming a successor — because that’s exactly what Mason did in hiring Romney and giving him lots of opportunities to learn about how to run the company.
Note that Romney was not a clone of Mason, but he bought into his general direction. That was quite different than Abernethy or Chapin, who ran as far away as they could from Romney’s approach.
I also would caution about assuming that just because the dominant management culture of General Motors was one way that it necessarily reflected how other automakers were run. Companies can be like families in the sense that they may have some common characteristics but can also be quite unique. An executive such as Iacocca might have fit in quite well at Ford but might not have at GM, let alone American Motors. Look at Knudsen, who quickly washed out at Ford when he moved over from GM.