What if AMC Motors had survived? How it could've changed the auto industry

USA Today

15 hours ago

American Motors Corporation was an absolute mess by the mid-1980s, and its financial problems in the U.S. market were compounded by infighting at its European corporate parent, Renault, where executives went back and forth about how much money they were willing to pour into their trans-Atlantic subsidiary.
The assassination of Renault's chairman in 1986 by French terrorists caused AMC to lose its most powerful supporter, and a hasty sale to Chrysler ultimately condemned it to the dustbin of automotive history. Chrysler hoovered up the tastiest bits of the American Motors portfolio — namely, Jeep — and slowly phased out the rest of the AMC's offerings over the course of the next decade.
In retrospect, however, AMC was holding not one, not two, but three aces up its sleeve that could have seen it weather the financial storm throughout the '80s. It's entirely possible that had a few key moments in the company's timeline gone a different way, it would have been American Motors and not Chrysler enjoying the fruits of Jeep's mainstream renaissance in the early 1990s — a rebirth that AMC in fact already had in development when it was scooped up by the suits in Auburn Hills.
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How different would the car industry have looked at the turn of the millennium if AMC had never changed hands? It turns out that this ripple in the chronological pond had the potential to upset big chunks of established history, not just in America, but in nearly every corner of the established automotive hegemony.
Here's our alternative timeline in which AMC not only survives but thrives — and what the resulting fallout would have likely meant for one of Detroit's longtime stalwarts.
After intense lobbying by American Motors, the U.S. government carves out an exception to a law forbidding foreign ownership of defense contractors, contingent on Renault spinning off AM General (the builder of the Humvee owned at the time by AMC) as an independently managed concern under the AMC umbrella. The continued, steady flow of government contracts acts as a lifeline for American Motors, and it cancels plans to take out a significant loan from its corporate parent to fund operations.
The Renault Espace arrives in AMC showrooms, where it is rebadged as the 'Space Van,' an Americanized take on the literal translation of the French vehicle's European identity. Surprisingly, the funky badge helps give the people-mover some personality, which, combined with its genuine practicality and roomier interior versus rivals from Ford (the Aerostar) and Chevrolet (the Astro), helps put it alongside the Dodge Caravan and Plymouth Voyager as a popular and affordable family ride.
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Following the introduction of the redesigned Jeep Cherokee the year before, this gives AMC a presence in two of the highest-growth segments in the American auto industry, and for the first time in years the company is cash-flow positive. This convinces American Motors to accelerate investment in a larger sport utility vehicle that would complement the Cherokee, called the Grand Cherokee, the design of which is already well underway.
Renault chairman Georges Besse's chauffeur is surprised to see two armed women in front of the home of his boss while driving back from the office on a cold November evening. He immediately hits the gas, slamming the rear door shut before Besse can exit the vehicle, and the pair escapes with just a few bullet holes in the rear quarter panel. After surviving the assassination attempt, Besse is given carte blanche at Renault to move forward with his plans for focusing on Jeep as the automaker's piggybank to fund not only AMC, but to also further the expansion of the French brand onto American shores.
Chrysler, on a brash spending spree that includes buying a controlling stake in Lamborghini and an expansion of its partnership with Mitsubishi to form Diamond Star Motors, sees exactly the same potential in Jeep as Georges Besse. An offer is made to Renault not just for the off-road brand but for all of AMC, with Chrysler trying to cloak its true intentions about what it considers the real prize of the transaction. Besse won't be bought, however, and Chrysler returns hat-in-hand to Auburn Hills.
Ambitious planning begins for the upcoming decade in the American market. With Jeep as its crown jewel, both Eagle and AMC are slated for repositioning beneath Renault. The French badge is no longer interested in its role as an entry-level brand hawking low-spec Le Cars and lays the groundwork for leveraging existing dealerships to form a stronger toehold for the revitalized company.
The Jeep Grand Cherokee breaks cover as a 'concept' at the North American International Auto Show in Detroit. The response from both the media and show attendees is overwhelmingly positive, leading to a brief spike in compact Cherokee sales from customers too impatient for what they assume will be a lengthy wait for the production version. No one realizes that Besse's pressure to keep pumping cash into Jeep has dramatically accelerated the Grand Cherokee's timeline.
The Grand Cherokee makes its debut in showrooms to universal acclaim. On top of offering a choice of either AMC's old faithful inline six-cylinder engine or a newly developed, 5.9-liter fuel-injected V-8, it also provides a turbodiesel option borrowed from the Renault parts bin. The latter choice positions the Jeep in its higher trim levels as something more than an off-roader, pushing it onto the radar of Europhiles who have become used to parking Range Rovers in their driveways. This opens a second front of European sales for Jeep in the luxury sphere.
The Ford Explorer joins the midsize SUV scene, splitting the difference between the Grand Cherokee's off-road chops and the practical character prized by family buyers now tempted to abandon their minivans. SUV sales are soaring, leaving General Motors and Chrysler playing catch-up. Chevrolet and GMC are at least able to soak up some sales thanks to the four-door compact Blazer/Jimmy and full-size four-door Suburbans sitting on full-size truck platforms, but the two-door Dodge Ramcharger remains in a distant fourth place as it plays out the string on a dated pickup chassis.
Buoyed by strong Jeep sales, Renault launches the initial phase of its ambitious American strategy. First, it spins off AMC as a value-focused brand selling cars on a 'no-haggle' model: What you see advertised is what you pay at the dealership. Along with a redesigned Espace, an entirely new lineup of hatchbacks, small wagons, sedans and budget coupes are gradually deployed over the course of the next few years, some sharing components with Renault's European offerings while others benefit from AMC's next-generation four-cylinder engine program. This puts AMC in direct competition with GM's Saturn brand, which arrived on the scene in mid-1990.
Next, a revitalized Eagle steps out of the AMC shadow and becomes its own brand. The focus remains on what are now being called 'crossovers,' automobiles that sit between a wagon and a sport utility vehicle. Eagle also benefits from Renault's technical prowess in the form of unibody models that feature sophisticated all-wheel-drive systems in place of their earlier, low-range four-wheel drive setups. The new Eagles are an immediate hit in regions like Colorado and New England.
Chrysler, facing considerable financial strain as sales of the Grand Caravan and Voyager slow in the face of the SUV onslaught, are forced to sell Lamborghini to MegaTech, an Indonesian company owned by Tommy Suharto, the son of that country's president-for-life. The automaker takes a loss on the deal, but it helps stem some of the financial bleeding that's beginning to concern both executives and Wall Street alike.
Dodge introduces a new Ram pickup that instantly makes it a player in the full-size segment after years of disappointing sales. Unfortunately, that same success doesn't translate to its revised version of the SUV, which updates the two-door Ramcharger with the new pickup's underpinnings. As the market continues to move toward family-friendly four-door haulers, many of them taking their cues from Eagle's crossovers, the Ramcharger is out of step with what customers are actually looking for in a sport utility.
Renault implements the next stage of its U.S. transformation by introducing the second generation of what had originally been planned as the Eagle Premier sedan. Originally kept exclusive to the European market, where it was sold as the Medallion, the new Renault Premier pushes the automaker into a higher class than it had previously enjoyed among American buyers, leading some to compare the car to offerings from Oldsmobile and even Audi.
After a fraught development process, the Dodge Viper concept car makes a late debut at the Detroit auto show. Although it was originally hoped that Lamborghini's engineers could be more involved in the design of the vehicle's drivetrain, the early sale forced Dodge to move on from its planned V-10 and instead supercharge the company's long-standing 5.9-liter V-8.
Heart-stopping styling doesn't make up for the lack of an exotic engine, making it harder for the public to stomach the no windows/no roof inconveniences of its cabin. Production plans for the Viper are quietly scuttled. The Viper team is diverted to focus on the Dodge Durango, a four-door, Grand Cherokee–sized SUV that the company hopes will turn its fortunes around.
Subaru, in the face of strong sales from Eagle eating into its core customer base, makes a product cancellation of its own. The Outback, a tall-riding version of its Legacy wagon, is deemed too derivative of the Eagle lineup to make a dent in the market, and its development is halted. Facing dwindling revenues, and unable to finance new product development, Subaru's leadership initiates back-channel talks with Toyota about a possible merger.
Renault, emboldened by the money pouring into its coffers from the success of AMC, Jeep and Eagle, makes the surprise move of purchasing Volvo, scooping Ford who had planned on making overtures for the Swedish brand to join its nascent Premier Automotive Group. After decades of working together on various shared projects, Renault hopes to leverage Volvo's dealer network and customer base to continue its colonization of the near-luxury space in the United States. Talks also begin with Nissan about a potential alliance.
Two new premium models emerge on American roads bearing the Renault badge: the Megane sport hatch and the Laguna hatchback sedan, with the latter praised for its near-crossover utility and excellent handling.
Concerned by Renault's burgeoning acquisition portfolio, Toyota signs a deal to bring Subaru in-house. At the same time, executives announce a new subbrand called Scion that's intended to take on both AMC and Saturn, which have split much of the entry-level market between them in the United States.
Chrysler, looking for a savior of its own, begins talks with Daimler about a potential 'merger of equals.' The German automaker's boardroom doesn't see much of value in Chrysler's mishmash of cheap cars, fading minivans and almost-luxury sedans, and while the Dodge Ram is appealing, it's too far outside the Daimler playbook to integrate properly into its American operations. Discussions never advance past the initial stages.
Emboldened by its newfound partnership with Nissan (which involved a stock share and co-investment in each other's companies), Renault has the cash to add the missing piece to its U.S. portfolio: Dodge, which it plucks from a flailing Chrysler as part of a general takeover bid. While the Ram pickup fills an important void, the Ramcharger is quietly put out of its misery, along with any plans to bring the stillborn Durango to market.
The Chrysler brand is relegated to special trim levels on several Renault models, specifically those sold to livery companies for use as limousines. The Walter P. Chrysler package becomes a popular choice in the black car business over the course of the next decade.
Photos by Getty Images, MotorTrend Archive, Ryan Lugo