American Motors, the small carmaker that fought Detroit's giants with compacts
While Ford, General Motors and Chrysler kept building bigger cars in the 1950s, American Motors bet on small ones. Its boss called it a dinosaur-fighter strategy, and the compact Rambler, promoted on Walt Disney's television show and by the chief executive himself, turned a struggling merger into a real rival.
American Motors was born on May 1, 1954, when Nash-Kelvinator absorbed the Hudson Motor Car Company in what was then the biggest corporate merger in American history. Nash's George Mason had engineered it, convinced that the surviving independents had to combine into one multi-brand company to stand up to the Big Three, whose price war of 1953 and 1954 was crushing smaller makers. The deal was a pure share swap and created the fourth-largest carmaker in the country.
Savings arrived quickly. Pooling purchasing and production let Hudson cut prices by 155 dollars on average for the Wasp, and the company posted its first profitable quarter in spring 1955. Hudsons were rebuilt on Nash bodies and assembled at Kenosha, the Detroit plant was turned over to military work, and the small Rambler was sold under both badges, differing only in trim, hubcaps and nameplates.
Mason died in 1954 and George W. Romney took over. The big cars flopped, losing 31.7 million dollars in 1956, so Romney scrapped them and staked everything on compacts, then crossed the country on a 12-month publicity tour, covering some 70,000 miles to speak in churches, union halls and fairgrounds. Sharing parts across models and refusing to restyle every year kept costs low, and Rambler sales soared late in the decade.
Innovation compensated for a tight budget. In 1959 the company explored an electric car with Sonotone, whose nickel-cadmium batteries recharged fast, and hired Dick Teague, later its chief stylist. The 1962 Rambler Classic came with a dual brake master cylinder, a safety feature matched only by Cadillac at the time. Renault bought a large stake in 1979, and Chrysler acquired the company in 1987.
Source: American Motors Corporation
