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American Motors Corporation (AMC) was an American automobile company formed by the 1954 merger of Nash-Kelvinator Corporation and Hudson Motor Car Company — at the time, it was the largest corporate merger in U.S. history.
American Motors (AMC) purchased Kaiser's Jeep operations in 1970 with Jeep's utility vehicles complementing AMC's passenger car business. AMC partnered with France's Renault, from 1980 to 1987, when Chrysler purchased AMC. Both AMC and Renault brands ceased in the United States, while Jeep and some Eagle models continued under Chrysler.
Formation
In January 1954 Nash-Kelvinator Corporation began acquisition of the Hudson Motor Car Company (in what was called a merger) to form American Motors . The deal was a straight stock transfer (three shares of Hudson listed at 11⅛, for two shares of AMC and one share of Nash-Kelvinator listed at 17⅜, for one share of AMC) and finalized in the spring of 1954, forming the fourth-biggest auto company in the U.S. with assets of $355 million and more than $100 million in working capital. The new company retained Hudson CEO A.E. Barit as a consultant and he took a seat on the Board of Directors. Nash's George W. Mason became President and CEO.
Mason, the architect of the merger, believed that the survival of America's remaining independent automakers depended on their joining in one multibrand company capable of challenging the "Big Three" - General Motors, Ford, and Chrysler - as an equal. The reasons for the merger between Nash and Hudson included helping them cut costs and strengthen their sales organizations to meet the intense competition expected from autos' Big Three. One quick result from the merger was the doubling up with Nash on purchasing and production allowing Hudson to cut prices an average of $155 on the Wasp line, up to $204 on the more expensive Hornet models. After the merger, AMC had its first profitable quarter during second three months in 1955, earning $1,592,307 compared to a loss of $3,848,667 during the same period in the previous year. Mason also entered into informal discussions with James J. Nance of Packard to outline his strategic vision. Interim plans were made for AMC to buy Packard Ultramatic automatic transmissions and Packard V8 engines for certain AMC products.
In 1954 Packard acquired Studebaker. The new Studebaker-Packard Corporation (S-P) made the new 320 cu in (5.2 L) Packard V8 engine and Packard's Ultramatic automatic transmission available to AMC for its Nash Ambassador and Hudson Hornet models. When Mason died in 1954 he was succeeded by George W. Romney. Ironically, Romney had once been offered Nance's job. In 1948, Romney received offers from Packard for the post of chief operating officer and from Nash for the number two position in the company. Although the Packard offer would have paid more, Romney decided to work under Mason because he thought Nash had a brighter future. S-P President James Nance refused to consider merging with AMC unless he could take the top command position (Mason and Nance were former competitors as heads of the Kelvinator and Hotpoint appliance companies respectively), and a week after Mason's death Romney announced, "there are no mergers under way either directly or indirectly." Romney agreed with Mason's commitment to buy S-P products. Mason and Nance had agreed that in return S-P would endeavor to purchase parts from American Motors, but S-P did not do so. As the Packard engines and transmissions were comparatively expensive, AMC began development of its own V8 engine. In mid-1956, the 352 cu in (5.8 L) Packard V8 and TwinUltramatic transmission was phased out and replaced by AMC's new V8 engine, as well as GM's Hydra-Matic and Borg-Warner transmissions.
By 1964 Studebaker production in the United States had ended, and its Canadian operations ceased in 1966. The "Big Three", plus the smaller AMC, Kaiser Jeep, International Harvester, Avanti and Checker companies were the remaining North American auto manufacturers.
Product development in the 1950s
American Motors combined the Nash and the Hudson product lines under a common manufacturing strategy in 1955, with the production of both Nashes and Hudsons combined, while retaining the separately branded established dealer networks. The Hudsons were redesigned to bring them in harmony with Nash body styles.
The fast-selling Rambler model was sold as both a Nash and a Hudson in 1955 and 1956. These badge-engineered Ramblers, along with similar Metropolitans, were identical save for hubcaps, nameplates, and other minor trim details.
The pre-existing full-size Nash product line was continued and the Nash Statesman and Ambassador were restyled as the "new" Hudson Wasp and Hudson Hornet. Although the cars shared the same body shell, they were at least as different from one another as Chevrolet and Pontiac. Hudsons and Nashes each used their own engines as they had previously: the Hudson Hornet continued to offer the 308 cu in (5 L) I6 that had powered the (NASCAR) champion during the early 1950s; the Wasp now used the former engine of the Hudson Jet.
The Nash Ambassador and Statesman continued with overhead- valve and L-head sixes respectively. Hudson and Nash cars had different front suspensions. Trunk lids were interchangeable but other body panels, rear window glass, dash panels and braking systems were different. The Hudson Hornet and Wasp, and their Nash counterparts, had improved ride and visibility; also better fuel economy owing to the lighter unitized Nash body.
For the 1958 model year the Nash and Hudson brands were dropped. Rambler became a marque in its own right and the mainstay of the company. The slow-selling British-built Nash Metropolitan subcompact continued as a standalone brand until it was dropped after 1962. The prototype 1958 Nash Ambassador / Hudson Hornet, built on a stretched Rambler platform, was renamed at the last minute as "Ambassador by Rambler". To round out the model line AMC reintroduced the old 1955, 100-inch (2,500 mm) wheelbase Nash Rambler as the new Rambler American with only a few modifications. This gave Rambler a compact lineup with 100-inch (2,500 mm) American, 108-inch (2,700 mm) Rambler Six and Rebel V8, as well as the 117-inch (3,000 mm) Ambassador wheelbase vehicles.
While the "Big Three" introduced ever-larger cars, AMC followed a "dinosaur-fighter" strategy. George W. Romney's leadership focused the company on the compact car, a fuel-efficient vehicle twenty years before there was a real need for them. This gave Romney a high profile in the media. Two core strategic factors came into play: (1) the use of shared components in AMC products and (2) a refusal to participate in the Big Three's restyling race. This cost-control policy helped Rambler develop a reputation as solid economy cars. Company officials were confident in the changing market and in 1959 announced a $10 million expansion of its Kenosha complex (to increase annual straight-time capacity from 300,000 to 440,000 cars). A letter to shareholders in 1959 claimed that the introduction of new compact cars by AMC's large domestic competitors (for the 1960 model year) "signals the end of big-car domination in the U.S." and that AMC predicts small-car sales in the U.S. may reach 3 million units by 1963.
American Motors was also beginning to experiment in non-gasoline powered automobiles. On April 1, 1959, AMC and Sonotone Corporation announced a joint research effort to consider producing an electric car that was to be powered by a "self-charging" battery. Sonotone had the technology for making sintered plate nickel-cadmium batteries that can be recharged very rapidly and are lighter than a typical automobile lead-acid battery.
Changing focus in the 1960s
In an effort to stay competitive, American Motors produced a wide range of products during the 1960s, and added innovations long before the "Big Three" introduced them.
For example, the Rambler Classic was equipped with a standard tandem master cylinder in 1962, six years before that safety improvement was required by federal law.
Rambler also was an early pioneer in offering an automatic shift indicator sequence (PRN21L, where if one selected "2", the car started in second gear, while "1" started in first gear) which is similar to today's "PRNODSL", made mandatory in 1968, which requires a neutral position between reverse and drive, while General Motors still offered a shift selector that had reverse immediately next to low gear (PNDSLR) well into the 1960s.
In 1964, the Classic was equipped with standard dual reclining front seats nearly a decade before the Big Three offered them as options. Bendix disc brakes were made optional on the Classic in 1965, while the Big Three didn't offer them until 1969 on many models.
In the early part of the decade, sales were strong, thanks in no small part to the company's history of building small cars, which came into vogue in 1961. In both 1960 and 1961, Ramblers ranked in third place among domestic automobile sales, up from third on the strength of small-car sales, even in the face of a lot of new competition. Romne
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