The Tragic Life Of Barbara Hutton—The Heiress Who Lost More Than Money D
The year was 1954 and the building on Plymouth Road in Detroit was having an identity crisis. It had been built in 1927 as a refrigerator factory. Its campanile tower rising above the flat northwest side of the city in a gesture of industrial confidence that the men who commissioned it never questioned.
Above the main entrance carved in stone were the words of Lord Kelvin, the British physicist after whom the building’s original tenant had named itself. I’ve thought of a better way. The Kelvinator Corporation had put those words there to announce an ambition. By 1954, the building had been a refrigerator plant, a wartime helicopter factory, a merger trophy, and the contested inheritance of two dying automobile dynasties.
It occupied 1 and 1/2 million square feet on 57 acres of Detroit’s west side. It had survived the depression, the war, and two corporate reinventions. And now, on May 1st, 1954, it was the headquarters of something that did not yet know what it was, the American Motors Corporation formed from the forced marriage of Nash-Kelvinator and the Hudson Motor Car Company in what was at that moment the largest corporate merger in the history of the United States.
The men who walked beneath Lord Kelvin’s inscription that morning were not celebrating. Hudson was dying. Nash was struggling. The dealer networks were tangled together like two sets of cables someone had tried to splice in the dark. The product lines overlapped in ways that confused everyone who tried to explain them to a customer.
The new company had inherited two sets of everything and a coherent vision of nothing. The ledger books bled. The boardrooms argued. The factory floor watched and waited to be told what to build. What they needed, though no one had yet found a way to say it clearly, was not a better product. They needed a better idea.
They needed someone who understood that the American automobile industry had made a wrong turn, and who was willing to say so publicly and stake his own money on the correction. That person was not a car man. He was not an engineer. He was a man who had laid floors in his youth, preached on street corners in England as a teenager, and bought stock in a failing company with the proceeds from selling his own house before anyone had confirmed he was in charge of it.
His name was George Wilcken Romney, and the story of what he did next, and what happened to after he left, is one of the most instructive and most heartbreaking stories in the history of American industry. Before we go any further into it, drop a comment and let us know where in the world you are watching from tonight.
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Now, to understand what George Romney was walking into, we need to understand the building he was walking into first, because the building is not incidental to the story. The building is the story’s first character, and it has a past worth knowing. The year was 1927. An engineer Amadeo Leone stood on a stretch of Plymouth Road on the northwest side of Detroit and began to draw a building that would outlast the company that commissioned it, the company that inherited it, and every human being who ever worked inside it. The Kelvinator Corporation had been founded in 1916 by a Boston engineer named Nathaniel Wales, who had come to Detroit not to build automobiles, but to sell an idea. Wales had not invented the refrigerator. What he had done was design the first truly self-contained electric home refrigerator, a machine compact enough and reliable enough to sit in an ordinary kitchen without requiring a dedicated mechanical room.
He brought his design to the offices of Edmund Copeland and Arnold Goss Buick Motors, and he convinced them that the same city that was learning to build affordable automobiles could learn to build affordable cold. Two months after founding the company, Wales renamed it in honor of Lord Kelvin, the Irish-born physicist who had established the absolute temperature scale that bears his name.
Lord Kelvin had been a man who spent his career looking at the physical world and saying that the accepted explanation was incomplete, that the measurement was wrong, that there was a more precise way to understand what was happening. Wales believed his company shared that spirit.
He had the phrase carved above the door, “I’ve thought of a better way.” The firm of Smith, Hinchman, and Grylls, one of Detroit’s established industrial architecture practices, designed the complex under Leone’s direction to make a statement about permanence and ambition. The centerpiece was a campanile-style office tower whose proportions owed more to Venetian civic architecture than to the utilitarian vocabulary of American factory design.
It was the kind of tower you built when you wanted people miles away to know you were serious. Behind the tower rose a three-story factory building and a dedicated power plant, all connected by interior passages that allowed raw materials to flow from one end of the complex to the other without leaving the building’s envelope.
The total complex, when completed, comprised 1 and 1/2 million square feet. Stand on the factory floor, and what you encountered was not abstract industrial space. You encountered a specific sensory environment, the smell of machine oil and hot metal, and the particular electrical tang of motors running under continuous load.
The floors vibrated at a frequency you felt in your sternum before you heard it with your ears. The windows were large and positioned to admit long columns of industrial light that moved across the floor as the day progressed, illuminating the work being done beneath them with an accidental grandeur. In January of 1937, Kelvinator merged with the Nash Motor Company of Kenosha, Wisconsin, and the building on Plymouth Road became the headquarters of Nash-Kelvinator.
The Lord Kelvin inscription remained above the door. Three years later, in 1940, the complex was expanded by a major addition that brought the total footprint to 1.46 million square feet on 57 acres. The expansion was timed to meet a need that was not yet fully formed because the war that would fill that additional space had not yet officially arrived.
When it did arrive, the building reinvented itself with the efficiency of a facility that had already reinvented itself once and understood the process. The Sikorsky Aircraft Corporation had a contract to build helicopters for the United States Army and could not meet the production demands. Nash-Kelvinator was brought in as a subcontractor and the Plymouth Road factory, which had been making refrigerators and automobile components, began assembling aircraft.
The logistics of this transformation were considerable. Helicopter components arrived by rail. The assembly sequences had to be designed from scratch. Workers who had spent years bending sheet metal for car bodies learned to work to the tolerances required by aircraft manufacturing. Between 1942 and 1944, 262 Sikorsky helicopters were completed under that roof and rolled out to a tiny airfield behind the building, reportedly the smallest commercial airstrip in the country, where they were tested before delivery to the army. The factory had now been a refrigerator plant, an appliance manufacturer, and an aircraft assembly facility. It did not have a fixed identity. It built whatever the moment required of it. By 1954, the moment required a new automobile company. Nash-Kelvinator merged with the Hudson Motor Car Company on May 1st of that year, and the building that Lord Kelvin’s motto adorned became the nerve center of the American Motors Corporation.
The inscription above the door had survived a depression, a war, two corporate transformations, and the specific optimism of four different sets of owners. It was still there. The question of whether anyone inside the building had actually thought of a better way remained stubbornly open. That question needed a man willing to answer it, and the man was already in the building.
George Wilcken Romney was born on July 8th, 1907 in a small polygamist Mormon colony in the state of Chihuahua, Mexico, and the first great crisis of his life was not a board meeting or a labor dispute. It was a revolution. The Mexican Revolution erupted when Romney was 3 years old, and his family, like most of the American Mormon colonists in northern Mexico, was forced to flee with no time for an orderly departure.
They crossed back into the United States carrying what they could and spent the next decade moving through several states following economic opportunity, eventually settling in Salt Lake City during the worst years of the depression. Financial hardship was not a concept to George Romney.
It was the texture of his childhood. He had laid floors for wages. He had thinned beets in the fields and shocked wheat under the sun. He had grown up in a household where money was a practical daily concern managed with precision because imprecision had consequences. This background did not make him sentimental about poverty.
It made him precise about economics in a way that men who had always had money rarely achieved because they had never been required to understand it at the level of whether the family could eat. At 19, Romney traveled to England as a missionary for the Church of Jesus Christ of Latter-day Saints.
He preached in public, on street corners, and in meeting halls, and in parks before audiences who had no particular reason to listen to a young American with an unusual theology and a manner that refused to accept dismissal. He was rejected constantly. Doors were closed in his face. People walked away while he was speaking. He kept going.
He developed in those years a tolerance for rejection that most people never acquire. And alongside it, he developed a specific rhetorical skill of presenting an unconventional argument to a skeptical audience without becoming defensive or desperate. His son, Mitt, would say decades later that his father’s public missionary work had developed skills of debate and persuasion that mattered more to his eventual career than any formal education he had ever received.
Romney himself agreed. He attended several colleges and left each of them without completing a degree. What he had instead was the kind of conviction that does not require institutional certification and the training to move it from his own mind into the minds of people who began the conversation opposed to everything he was saying.
He moved to Detroit in 1939 and joined the American Automobile Manufacturers Association, where he became the chief spokesman for the entire automobile industry during the Second World War. His job was to persuade hundreds of competing companies, many of them accustomed to treating each other as commercial enemies, to voluntarily convert their factories to war production under a coordinated national program.
He succeeded completely. 654 manufacturing companies joined the Automotive Council for War Production under his coordination. The industry produced nearly 29 billion dollars in output for the Allied military forces, including over 3 million motorized vehicles, 80% of all tanks and tank parts, and 75% of all aircraft engines.
Romney was quoted or mentioned in over 80 New York Times stories during this period. Had not yet run a company of his own. He was learning at a scale most executives never encounter how to align the interests of competing parties around a shared objective. He joined Nash-Kelvinator in 1948 at the invitation of its chairman, George Mason, who called him to learn the business from the ground up.
Romney spent a year rotating through every division of the company, a deliberate apprenticeship rather than the kind of executive arrival that assumes immediate competence. During a stint at a Detroit Kelvinator appliance plant, he personally intervened in a labor dispute that was threatening to shut down the facility.
He appealed to the workers not from behind a desk, but standing on the floor with them, telling them directly, “I am no college man. I’ve laid floors, I’ve done lathing, I’ve thinned beets and shocked wheat.” The workers believed him because the claim was not rhetorical. He was a man who had done those things, and they could hear the difference between someone stating a credential and someone telling the truth about his own life.
When Mason died suddenly on October 8th, 1954, less than 6 months after the AMC merger was finalized, Romney was the obvious choice for the leadership, and he made the choice easier by acting before he was officially appointed. He had already sold his house in Bloomfield Hills. He had taken the proceeds from that sale and used them to buy American Motors stock.
He invested his family’s capital in a company that was losing money at a rate that frightened every analyst who examined the balance sheets before anyone had formally confirmed that he had the job. This act was not a publicity gesture. There were no cameras present and no press releases planned. He did it because he believed in the idea and because a man who has been preaching on street corners since the age of 19 understands that if you are not prepared to stake something on your conviction, no audience of skeptics has any reason to listen to what you are saying. The company he inherited was a structural mess. The AMC merger had brought together two sets of product lines, two dealer networks, two engineering staffs, two corporate cultures, and two sets of manufacturing habits into a single organization that had not yet developed a shared way of making decisions. The 1955 Nash Hudson models were being built on the old Nash body shell with different badges on the hood. The dealer
networks overlapped geographically and competed against each other for the same customers. The finances were deteriorating. Romney reorganized the upper management, brought in younger executives who had not spent their careers attached to one of the legacy brands, and began the process of simplification that would define his tenure.
The simplification was not cosmetic. It was surgical. George Romney walked into his first press conference as chairman of American Motors and called the products of Ford, General Motors, and Chrysler gas-guzzling dinosaurs. And in doing so, he either committed corporate suicide or changed the direction of American industry.
There was no middle ground available. The Big Three had invested billions of dollars and decades of institutional momentum in the principle that American consumers wanted cars that were larger, more powerful, more heavily ornamented, and more expensive than the cars they had bought the year before. The annual model change, the perpetual escalation of chrome and steel and tail fin, was not merely a marketing strategy.
It was the theological doctrine of Detroit, the organizing principle around which the entire industry’s capital allocation, engineering priorities, dealer incentives, and advertising budgets had been structured for a generation. To stand up in a press conference and announce that this doctrine was irrational was not a positioning statement.
It was a declaration of war against the largest industrial complex in the history of American manufacturing. Romney’s diagnosis was not sentimental. It was analytical. The average American car of the mid-1950s was longer than it needed to be by a significant margin, consuming street and garage space that most Americans did not have to spare.
It was heavier than its function required, which meant it burned more fuel and cost more to ensure. It was engineered to perform at speeds that were not legally available on any American road. The buyer was paying not for transportation, but for theater, for the visible performance of affluence on a public stage, for a status signal that required annual replacement, as last year’s signal was superseded by this year’s even larger and more ornamental version.
Romney believed this was a market condition, not a permanent truth about what human beings needed from their automobiles, and that a company willing to offer a serious, well-engineered alternative would find customers who had been waiting for permission to disagree with Detroit. By the end of 1957, he had phased out both the Nash and Hudson brands entirely.
This was an act of industrial violence committed against the company’s own heritage, and it was the correct decision. He concentrated every resource on a single product line, the Rambler. The company lost money in 1956. It lost more in 1957. Dealers defected from the network, unwilling to stake their businesses on an eccentric strategy from a CEO who had never run an automobile company before.
Industry analysts declined to be subtle about their predictions. Romney and his five highest-paid executives voluntarily accepted a salary reduction averaging nearly 26% in 1957. They did not announce this as a gesture of solidarity with the workforce. They did it because the company had no other option and because Romney had spent his adult life operating on the principle that a leader does not ask the people around him to accept a cost he is unwilling to share.
Then 1958 arrived. A mild recession settled over the American economy. Gasoline prices crept upward. Inflation pressured household budgets. For the first time in a decade, ordinary American consumers began to ask, quietly at first, and then in showrooms and letters to newspapers and conversations at the gas station, whether they actually needed a car the size of a small boat.
The question had been obvious to Romney for 3 years. Now it was obvious to the people writing checks. The Rambler, which Romney had been selling into a reluctant market with diminishing financial reserves, suddenly appeared not as a concession to poverty, but as the result of someone having thought the problem through. AMC’s car production more than doubled between 1958 and 1959.
The company recorded a meaningful profit for the first time since the merger. A Rambler won the 1959 Mobil Economy Run, the most prominently covered fuel efficiency competition in American motorsport, beating every vehicle the Big Three entered. By 1960, the Rambler was the third most popular automobile brand in the United States, behind only Ford and Chevrolet.
Romney became a celebrity executive before the concept had acquired a name. He sponsored the Walt Disney anthology television series, giving AMC visibility in American living rooms that its advertising budget could not have purchased independently. He exhibited at Disneyland in Anaheim, placing the Rambler in a setting associated with the optimistic American future.
He appeared in his own television commercials making the case for the compact car with the same directness and the same refusal to be embarrassed by his own argument that he had brought to every street corner in England 30 years earlier. A profile in Time magazine described him as a man who had taken a company that only 3 years earlier was on the brink of total collapse and given it a new and vibrant lease on life.
By 1961, Ramblers ranked third in domestic automobile sales, a position that would have been considered a hallucination by anyone who had read the AMC balance sheets in 1956. By 1963, the company had set a sales record with over 464,000 units sold in a single year. It had become completely debt-free.
The factory on Plymouth Road ran at full capacity. Lord Kelvin’s inscription above the door no longer seemed like the motto of a company that had named itself after a physicist without understanding the irony. It seemed, in the specific light of 1963, like a prophecy that had taken 30 years to arrive.
George Romney resigned in 1962 to run for governor of Michigan. He won the election by a substantial margin, served as the 43rd governor of the state, and later ran for the Republican presidential nomination losing to Richard Nixon in 1968. He served as Secretary of Housing and Urban Development under Nixon and lived until July 26th, 1995.
He left AMC at its highest point, financially sound and strategically coherent, positioned in exactly the market segment his analysis had identified. The things that happened next to American Motors were almost entirely the consequence of decisions made by the men who replaced him. While George Romney had been building the case for the compact car, in the executive offices on Plymouth Road, a designer named Dick Teague was developing a methodology in the drafting rooms nearby that would define the visual character of American Motors for 23 years. That methodology can be stated simply, find out what you already have and make it look like it was always meant to be what it is now. Richard Arthur Teague was born on December 26th, 1923 in Los Angeles, California. His mother worked in the silent film industry during the era when that industry was still centered in Southern California and still silent. At 5 years old, he appeared in five episodes of the
Our Gang comedy shorts, playing a character named Dixie Duval. At 6, a car driven by a drunk driver struck him and removed the sight in his right eye, leaving him without depth perception for the rest of his life. A year later, a second drunk driver’s car killed his father. These biographical facts are not furnished here because tragedy is interesting.
They are furnished because they explain the particular attentiveness with which Teague approached the physical world, the precision of his observation, and the absence of sentimentality in his relationship with the objects he designed. Cars were not innocent to him. They had weight and momentum and consequence.
He became a man who noticed things. He discovered hot rod culture as a teenager, that specifically American art form of taking limited materials and making them go faster and look more expensive than their origins justified. And in it, he found the aesthetic principle that would govern his entire professional life. Good design is not the product of unlimited resources.
It is the product of the precision of the decision made within whatever constraints exist. He studied at the Art Center College of Design in Pasadena, where the curriculum emphasized exactly this kind of disciplined problem solving. He worked at General Motors, where resources were not a constraint, and design was an exercise in elaboration.
Then he moved to Packard during its final years, where resources were very much a constraint, and he learned what it meant to make significant visual changes on a budget that forced invention rather than permitting indulgence. He worked briefly at Chrysler, then arrived at AMC, completing what he noted with amusement near the end of his career, was a tour of every major Detroit automobile company except Ford.
AMC’s design budget during Teague’s 23 years was a fraction of what his counterparts at the Big Three commanded. General Motors design operation under Bill Mitchell employed hundreds of designers and occupied a campus-scale facility in Warren, Michigan. Ford’s design organization under Gene Bordinat was smaller, but still operated at a scale that AMC could not approach.
AMC’s design group was a collection of talented people working in a building that smelled of ambition and inadequate funding in approximately equal measure. Teague’s response to this condition was not resentment or complaint. It was the development of a systematic methodology for extracting maximum visual impact from shared components.
He would take the instrument panel from one vehicle and fit it to another with modifications that disguised the commonality. He would shorten a wheelbase, alter a roofline, change a grille treatment, modify the greenhouse proportions, and emerge with something that looked to the eye of the average consumer in a showroom like a new car.
He called this with characteristic understatement making the most of his employer’s investment. What he was actually demonstrating was that the constraint is not the enemy of the design. The constraint is the condition that forces the design to become precise. The Gremlin arrived in 1970, and the origin of its design has become the most famous single anecdote in AMC history.
Teague was on a commercial flight when the concept arrived with the specificity of a complete thought rather than a developing idea. He had nothing to write on except the paper bag provided in the seat pocket for the use of motion sick passengers. He sketched on it a car whose rear section had been compressed by 12 in from the existing Hornet wheelbase creating a shape that was boxy and aggressive and entirely unlike anything currently on the American road.
The truncated Kammback tail gave the car a pugnacious character that the name when Romney era naming conventions were replaced by the more aggressive vocabulary of the 1970s suited perfectly. The Gremlin was priced at $1,879 for the base model designed specifically to compete with the Volkswagen Beetle and the growing wave of Japanese compact imports.
It was not a beautiful car in any conventional sense. It was ugly in the particular way that certain objects become beloved precisely because they have the confidence of their own ugliness. It sold 671,000 units over 8 years with a peak year of over 170,000 units in 1974. For a company with 2% of the American market, those were not modest numbers.
The Pacer arrived in 1975 and its story is the story of a brilliant idea defeated by a decision that Teague never controlled and never forgave. He designed the Pacer around nearly 39 square feet of glass, 50% more glazing than a typical compact of its era and a body width that rivaled intermediate cars while keeping the overall length under 172 in.
The fishbowl effect of that glazing created an interior that felt genuinely and unusually spacious in a vehicle that was externally compact. The original engineering specification called for a General Motors Wankel rotary engine, a compact and lightweight power plant that would have kept the car’s total weight manageable and its proportions sensible.
Then General Motors canceled the Wankel development program, citing reliability concerns. AMC was left with a body designed around an engine that no longer existed. The substitute was a heavy conventional inline six that pushed the curb weight beyond 3,400 lb, eliminated the fuel economy figures that had justified the design, and turned an agile urban vehicle into an expensive underpowered fishbowl that was difficult to maneuver in the parking conditions it had been designed for.
The car that reached the showroom was not the car Teague had designed. AMC spent approximately $60 million developing the Pacer and never recovered that investment. Teague ranked it among his designs despite its commercial failure because the failure was not in the concept. The Javelin and the AMX told a different story.
Teague developed both vehicles almost simultaneously. The Javelin as a four-seat pony car competitor to the Ford Mustang and the two-seat AMX from a Javelin wheelbase shortened by 12 in, a modification that saved AMC the cost of developing an entirely separate platform. Around 55,000 Javelins sold in the model’s first year alone.
The Javelin won the Trans-Am racing series manufacturer’s championship in 1971 and 1972, providing exactly the kind of performance credibility that the company needed to sell sporty vehicles to buyers who had previously associated AMC exclusively with economical transportation. The Italian mid-engine AMX/3, six prototypes of which were hand-built in Italy to Teague’s design by engineer Giotto Bizzarrini, was the purest expression of what Teague could do when freed from the parts bin constraint entirely. It was revealed in Rome in March of 1970 to unanimous admiration and was then canceled because the projected retail price of $10,000 was beyond what AMC believed the market would accept for a car wearing an AMC badge. Teague kept one of the six prototypes. He considered it his finest work. He retired in February of 1986 after 23
years as vice president of design, a record tenure in that role in the entire Detroit industry. He died on May 5th, 1991 at the age of 67. His papers and his collection, including the AMX 3 prototype, were donated to the San Diego Automotive Museum. Chilton’s Automotive Industries magazine named him its 1976 Man of the Year, the first time in the award’s 12-year history that a designer, rather than an engineer or executive, had been so honored.
For 23 years, he had made a company look richer than it was, more innovative than its budget permitted, and more confident than its financial condition warranted. He had done it with discipline, ingenuity, and the accumulated knowledge of a man who had owned, by his own estimate, between 400 and 500 cars during his lifetime and understood every one of them.
Roy Abernethy had been watching the Big Three’s success with large cars for a decade and he had reached a conclusion that was reasonable on its surface and catastrophic in execution. If AMC could succeed with small cars, it could succeed with large ones, too. The argument had the appearance of logic.
Abernethy had been AMC’s vice president of sales under Romney and had built, with genuine skill and persistence, the distribution network that made the Rambler competitive in markets where AMC had previously had no presence. He understood the company’s customers. His reading of them was that they had bought their first Rambler out of economic necessity during the lean years of the late 1950s and were now, in the relative prosperity of the mid-1960s, ready to spend more money on a larger car. The Rambler’s economy car identity, he believed, had become a ceiling. Customers who wanted to trade up were trading out of the AMC brand entirely because AMC offered them nothing to trade up to. He intended to change this. He began developing larger, more expensive vehicles. The 1965 Ambassador was extended, upgraded, and repositioned as a near luxury offering. Convertibles appeared in the lineup for the first time. The portfolio expanded.
Picture the AMC showroom on a Tuesday morning in the autumn of 1964. The floor has been waxed overnight. A new Ambassador sits under the fluorescent ceiling lights, longer and lower and more visually imposing than anything Romney had built. The salesman who spent 3 years explaining why a smaller car was actually a better car is now explaining why this larger car represents the company’s evolution.
A customer who drove a Rambler for 3 years and has come in ready to spend more money is pleased. The numbers from the first year of the strategy look encouraging. Ambassador sales jumped from 18,647 units in 1964 to over 64,000 in 1965. In 1966, they climbed to more than 71,000. On paper, Abernethy appeared to have diagnosed his market correctly.
Paper was where the good news stopped. The cost of developing competitive new platforms, new engines, and new body architectures for these larger vehicles was consuming capital at a rate the company’s balance sheet could not sustain. AMC operated without the financial reserves that allowed the Big Three to absorb development costs across model cycles spanning millions of units.
General Motors alone spent more on engineering in a calendar year than AMC collected in total revenue. Developing a genuinely competitive full-size automobile required the kind of investment that a company holding less than 2% of the American market had no rational basis for making. American Motors sales dropped 20% in the first half of 1966.
The company reported a fiscal 6-month loss of $4.2 million on sales of $479 million. The Big Three had not even noticed they were in a fight. They simply continued doing what they had always done, and it was enough to crush the company that had come onto their ground. Abernethy was removed. His chairman Evans resigned alongside him.
The official public statement said both men had stepped aside according to a plan to give a younger team an opportunity to advance. In Detroit, the language of planned succession is universally understood as the language of forced removal. Roy D. Chapin, Jr., the son of Hudson co-founder Roy D.
Chapin, was handed the leadership of a company that had spent three expensive years trying to become something it could not afford to become. Chapin reversed course immediately and completely. He called in Dick Teague and gave him a directive that was for Teague essentially a return to his natural operating environment.
Build new vehicles from existing parts, make them look deliberate, and make sure every dollar spent justified in units sold. The AMC Matador that emerged from this recovery effort was a facelift of the AMC Rebel, which was itself derived from the 1967 Ambassador platform. Everything that moved through AMC’s production facilities during the Chapin recovery period was a variation of something that had already been built and paid for.
This was not creative limitation. It was the operating logic of a company that had just learned, at enormous cost, the most important rule of its own existence. The rule was permanent and absolute. AMC could win in markets where the Big Three were not paying full attention. It could not win in markets where the Big Three were deploying their complete competitive resources.
The compact car was a market the giants had abandoned as beneath their dignity in 1955. The muscle car segment that Teague exploited with the Javelin and the AMX was a niche they had not fully developed. The off-road vehicle category was essentially uncontested by serious full-line manufacturers until AMC arrived there.
But the full-size car market was where Ford and General Motors and Chrysler directed maximum engineering budgets, maximum manufacturing investment, and maximum marketing resources every single year without exception. AMC had brought a fraction of those resources to a fight with three companies whose combined financial capacity resembled that of medium-size sovereign nations.
The lesson was not unique to automobiles. It was the lesson that every under-resourced competitor in every industry eventually learns on its own skin. You cannot beat the giant on ground he has held for 30 years. You can only beat him on ground he has not yet learned to value. Roy Chapin Jr.
had just finished rescuing the company from Abernethy’s mis calculation, and instead of consolidating the recovery, he made one of the boldest acquisitions in American automotive history. Kaiser Industries had been attempting to exit the automobile business for several years, and was willing to sell its Kaiser Jeep division at a price that reflected the division’s current losses rather than its potential.
Gerald Myers, AMC’s vice president of manufacturing, led the team dispatched to evaluate the Jeep operations. His assessment was not enthusiastic. The facilities were aging, the product line was narrow, the division had been losing money. AMC’s senior management opposed the acquisition. The off-road vehicle was not a mainstream consumer category in 1969.
It was a specialty product purchased by farmers, by the military, and by a modest community of outdoor recreation enthusiasts. The Big Three had made clear by their absence that they did not regard it as a priority. Chapin overruled the opposition. In February of 1970, he approved the purchase of Kaiser Jeep for $70 million.
The logic behind the decision was structurally identical to the logic behind Romney’s compact car strategy 15 years earlier. Jeep occupied a market segment where the large competitors were either absent or barely present. Ford had the Bronco. Chevrolet had just introduced the Blazer. But neither company had committed to four-wheel drive vehicles as a strategic pillar.
The segment was growing among recreational buyers as American outdoor culture expanded, and growing among commercial and government buyers as the vehicle’s capabilities became better understood. AMC had found its second Romney moment. A market niche the giants had not bothered to defend, where a smaller company with focused resources could establish dominance before the larger players understood what they had ceded.
Under AMC’s engineering and design direction, the Jeep line modernized substantially over the following decade. The Cherokee XJ, developed through the early 1980s with Dick Teague’s team contributing the exterior design, was a vehicle of genuine historic importance. It applied unibody construction to a four-wheel drive platform for the first time in a production vehicle, which allowed it to deliver car-like ride quality and fuel economy alongside legitimate off-road capability.
It was priced within reach of ordinary American consumers and sized for daily urban use. When it was introduced for the 1984 model year, it established a category that had not previously existed in the form that consumers would eventually demand, the compact capable daily usable sport utility vehicle.
The entire SUV and crossover market that now dominates global automobile sales originated in the engineering decisions made in AMC’s offices in Detroit and in the Kenosha production facilities. But Jeep success was generating a structural problem that no one within the company addressed directly.
By the late 1970s, Jeep was responsible for the majority of AMC’s profits. The passenger car lines, including the Gremlin, the Pacer, the Concord, and the Spirit were aging products competing against increasingly sophisticated Japanese imports that AMC’s existing factories could not match on cost or quality at equivalent price points.
Japanese manufacturers had spent the 1970s building exactly the kind of efficient modern assembly operations that AMC’s Kenosha facilities, dating in their bones to 1902, were not. AMC’s share of the American passenger car market fell to just 2% by 1979. The company that had been the third most popular automobile brand in the United States 18 years earlier held a market position that was, from the perspective of the banks that financed product development, indistinguishable from zero.
When AMC’s management went to its lenders seeking capital to fund new passenger car development, the lenders declined. AMC was not considered too big to fail. It was considered too small to save on its own terms. When the American banks closed their doors, AMC turned to the French, and the French turned out to be both a genuine rescue and the final dismantling of the company’s independence.
The partnership with Renault was announced in January of 1979. The original agreement was deliberately modest in scope. The two companies would share sales networks, technology, and some manufacturing operations without any transfer of ownership. The arrangement made sense for both parties.
AMC gained access to Renault’s small car technology and engineering resources. Renault gained access to AMC’s established dealer network, which reached into cities and regions of North America that Renault had never penetrated effectively through its own distribution. It was a collaboration between a small American company that needed better products and a French company that needed better access to the American market.
Neither party anticipated what the next 12 months would bring. The second oil crisis hit in 1979 with an abruptness that paralyzed the American automobile market. Consumers who had been buying Jeeps for recreational use stopped buying them almost overnight as fuel prices made large, thirsty vehicles feel like a luxury the household budget could not support.
Jeep sales were cut nearly in half. The recession deepened. AMC’s financial position deteriorated rapidly from precarious to critical. Renault was forced, well beyond the original terms of the partnership. It acquired a 22 and 1/2% ownership stake in AMC, injecting $150 million in cash plus $50 million in additional credits.
In exchange, AMC received the rights to build and sell Renault vehicles through its dealer network and gained access to Renault’s engineering capacity for future product development. What had been a commercial partnership became a dependency, and the dependency transformed over the following 18 months into a controlling relationship as Renault’s stake grew and French management took on operational roles within AMC.
What followed was one of the genuinely strange partnerships in the history of large-scale industrial enterprise. French corporate management culture and American factory culture arrived at the same conference tables and found very little that they recognized in each other. The French expected deliberative processes of decision-making that moved through defined hierarchical channels at a measured pace.
The Americans expected directness and speed and a certain informality in the execution of decisions that had been made at the top. The French found the American approach chaotic and insufficiently respectful of expertise. The Americans found the French approach bureaucratic and insufficiently responsive to market conditions.
Neither side was wrong, exactly. Both sides were operating from legitimate assumptions about how organizations should function. The working relationships were maintained not by cultural compatibility, but by shared financial necessity. Both parties needed the arrangement to produce results and neither had a credible alternative.
The Renault Alliance launched for the 1983 model year after years of joint development and appeared initially to justify the sacrifice of AMC’s independence. It sold 121,000 units in its first year. Motor Trend named it Car of the Year for 1983. AMC recorded a $7.4 million profit in the fourth quarter of that year, a number that stood in sharp contrast to the previous 14 consecutive quarters of losses.
The 1984 fiscal year was profitable on an annual basis for the first time since 1979, during which extended period the company had lost a cumulative total of 637.6 million dollars. For one season, it appeared that the French partnership had delivered exactly what it had promised, a credible new product and a path back to financial stability.
There was a detail in the alliance’s launch strategy that deserved more attention than it received. Consumer research conducted between 1979 and 1982 had found that American buyers trusted the Renault name slightly more than the AMC name. The Alliance was therefore marketed as a Renault vehicle with the AMC identity reduced to a small adhesive label on the rear window and a line in the advertising fine print.
The last independent American automaker was being erased from its own products in its own showrooms, replaced by a French name that American consumers found marginally less associated with the image of corporate failure. The brand that George Romney had built from the merger ruins of Nash and Hudson was quietly being retired.
Then the oil crisis ended. Gasoline became abundant and cheap again. American consumers turned back toward larger vehicles with a speed that made clear how little the preference for small cars had been a considered judgment rather than a response to temporary price pressure. The subcompact market that the Alliance had been engineered to serve contracted sharply.
Alliance sales fell from 121,000 in 1983 to 65,000 in 1986. Renault was simultaneously experiencing severe financial difficulty at home in France. The combined cost of the AMC investment and the construction of a new assembly plant in Brampton, Ontario had forced the closure of several Renault factories in France and significant layoffs among the French workforce.
The French government, which owned Renault as a nationalized enterprise, was losing patience with an American venture that had consumed hundreds of millions of dollars and had not established a self-sustaining business. Georges Besse was the chairman of Renault and the one consistent internal advocate for the AMC investment.
When other members of the Renault leadership argued that AMC had become a financial void without a bottom, Besse continued to make the case that the Jeep operations were generating real value and that the Cherokee XJ, about to reach the market, would justify the entire investment. He was correct on both counts.
But on November 17th, 1986, Bescht left his Paris apartment on foot and was shot and killed on the sidewalk by members of Action Direct, a French far-left militant organization. He was 60 years old. With Bescht gone, the Renault board assembled to consider its options without the voice that had argued most forcefully for patience.
It could declare AMC bankrupt, losing its entire investment. It could commit more capital to a situation its own executives called a bottomless pit. Or it could find a buyer for the American investment and recover whatever portion remained. The deliberation was not lengthy. The man who had believed in American Motors enough to fight for it in French boardrooms was dead on a Paris sidewalk and the boardrooms of Paris were now calculating how much of their investment they could recover by selling the last independent American automaker to whoever would pay the most for it. While the executives negotiated in Detroit and the French calculated their losses in Paris, the people who actually built the cars were in Kenosha, Wisconsin and they had been building cars in Kenosha since before any of them were born. The Kenosha factory had opened in 1902 as the Thomas B. Jeffery Company on the western shore of Lake Michigan in a city that had organized its entire social and economic structure
around the manufacture of automobiles for longer than most American cities had organized themselves around anything. Thomas Jeffery had been a bicycle manufacturer in Chicago before he decided that the automobile was the coming thing and relocated to Kenosha to build them. His factory was among the earliest dedicated automobile assembly facilities in the country, operating on what historians of the industry describe as America’s second automobile assembly line after the Oldsmobile plant in Lansing. The Jeffrey Company produced the Rambler name first long before the word would appear on any AMC product on a one-cylinder vehicle of modest performance and considerable historical significance. The Jeffrey Company became Nash Motors in 1916 when Charles Nash, the former president of General Motors, purchased it for $5 million. Nash became Nash-Kelvinator in 1937. Nash-Kelvinator became AMC in 1954.
The ownership changed five times over 52 years. The factory never moved. The Kenosha Lakefront plant and the main plant together occupied nearly 2 million square feet of floor space distributed across multiple interconnected structures. This was not a single building, but a small industrial city. The main assembly facility where final vehicle production occurred, the Lakefront plant that had been added on the shoreline site of a former Simmons mattress factory, the engine production facility, the stamping operations, the die-casting department where workers arrived before dawn to mix molten metal and pull finished components from molds that were still too hot to touch without protection. Cars entered the process as coils of raw steel and left as finished vehicles carrying the smell of fresh paint and new rubber. The assembly line itself was a physical argument. It organized human labor into a sequence of precise,
interdependent acts, each worker performing a specific operation at a specific station in a chain that began with steel and ended with a vehicle that someone would drive home and depend on. At the mid-1960s peak of AMC’s production, 14,000 workers were employed in Kenosha in AMC-related work. 14,000 people in a city of roughly 80,000 residents.
This meant approximately one in every six people in Kenosha worked directly for the company, and nearly every household had a connection to the plant through either direct employment or the web of suppliers, service businesses, restaurants, schools, and community institutions that a workforce of that scale generates and sustains around itself.
The UAW Local 72 was not merely a labor organization. It was the most powerful civic institution in the working class life of the city. The organization that negotiated the conditions under which the majority of Kenosha’s adults spent the majority of their waking hours. When the assembly lines ran at capacity, Kenosha ran.
When a slowdown came, the city felt it in every restaurant and hardware store and elementary school within 5 mi of the plant. The plant and the city were not separate things. They were the same thing organized at different scales. The Kenosha facility produced the vehicles that defined AMC across every era of its existence.
The Rambler American was built there. The Gremlin was built there. The Pacer was built there. The Javelin and the AMX were built there. The Eagle crossover was built there. The Concord and the Spirit were built there. The first generation Jeep Cherokee, the vehicle that would eventually justify the entire AMC enterprise in the eyes of posterity, was built there.
The AMC straight-six engine, which came out of the Kenosha engine facility in various displacements across multiple decades, became one of the most trusted power plants in American automotive manufacturing. The 4.0 L version powered the Jeep Cherokee XJ through the entire decade of the 1980s and through the 1990s.
Off-road drivers in the American West who depended on their vehicles in conditions where breakdown meant genuine danger, learned to specify the AMC engine because it ran indefinitely without drama. Versions of the basic engine architecture remained in production until 2006. An engine designed and refined in Kenosha outlasted the company that created it by 19 years.
In 1987, with the Chrysler acquisition approaching but not yet finalized, AMC’s final chief executive, Joe Cappy, was in the closing stages of a labor negotiation with Rudy Kuzel, the chairman of UAW Local 72, over job work classifications. The existing collective bargaining agreement specified 22 separate work classifications on the Kenosha production floor, a number that fragmented the workforce in ways that reduced operational flexibility and increased costs relative to the non-union Japanese assembly plants that had opened across the American South during the early 1980s. Reducing these classifications had been a management objective for years. The union had resisted because classifications represented job security, protected wage rates, and the accumulated institutional memory of what workers could be asked to do. After extended and difficult internal deliberation, Local 72 agreed to reduce the classifications from 22 to five.
This was a significant concession, representing years of bargaining positions surrendered in a single agreement. In exchange, AMC committed formally to build the next generation Jeep Grand Cherokee in Kenosha. The Grand Cherokee, then in advanced development under the internal code name ZJ, was already understood within the industry to be a vehicle with enormous commercial potential.
Building it in Kenosha would guarantee the plant’s future for a generation. The papers were prepared. Both sides had agreed to the terms. The deal was hours from being signed. Then the Chrysler acquisition closed and the commitment died before the ink was dry. The workers of Kenosha had surrendered their bargaining position in exchange for a promise made by a company that no longer existed by the time the promise was due to be honored.
On March 10th, 1987, the Chrysler Corporation announced the purchase of American Motors Corporation for 1 and 1/2 billion dollars. The announcement was framed in every official communication that followed around the Jeep brand. The word Jeep appeared before the word AMC in press releases, in executive statements, in newspaper coverage, and in internal Chrysler communications.
The framing was accurate. Chrysler had not purchased a diversified automobile manufacturer with a range of products it intended to continue developing. It had purchased a single brand and everything that came with that brand was inheritance rather than acquisition. Lee Iacocca had rebuilt Chrysler after its 1979 near bankruptcy through a combination of federal loan guarantees, ruthless cost reduction, personal marketing in television commercials that made him one of the most recognizable executives in American business, and the introduction of the front-wheel drive K-car platform that gave Chrysler a modern product foundation at a time when modern was the only thing that would save it. He understood the automobile market with the precision of a man who had watched it destroy Chrysler once and was not prepared to watch it happen again. He understood what Jeep was worth. The off-road and sport utility segment was accelerating. The Cherokee XJ was generating the kind of sales numbers that indicated a category on the verge
of explosion rather than a niche at steady state. The Grand Cherokee was in development. Chrysler was purchasing the future of the American vehicle market and it paid 1 and 1/2 billion dollars for the right to control that future. The Plymouth Road Complex in Detroit became the Jeep and truck engineering center under Chrysler ownership.
3,000 employees remained in the building working on the Dodge Ram pickup and the Jeep Grand Cherokee, the vehicle whose production Kenosha had been promised and would never see. The Kenosha plant continued operating building older Chrysler models including the Dodge Omni, the Plymouth Horizon, the Chrysler Fifth Avenue, and the Dodge Diplomat while the transition proceeded. The lines were running.
The workers were reporting. There were people inside the Kenosha facilities who believed the arrangement might be sustainable. Then, on January 29th, 1988, the New York Times published a story under the headline “Time Runs Out at Old Car Plant” and the ground shifted beneath the city of Kenosha. Chrysler announced it was closing most of its Kenosha automobile production operations by the end of the 1988 model year.
The official explanation was industrial economics. The company had more production capacity than its product plans required and the Kenosha facility with its aging infrastructure and its labor costs was the logical candidate for elimination. Rudy Kuzel, who had negotiated the 22-5 classification agreement in exchange for the Grand Cherokee commitment, understood immediately and with precision what had happened.
Workers from Local 72 were dispatched to cities across the country carrying signs that accused Iacocca of having made promises he had no intention of keeping. Kuzel told the Wall Street Journal that Iacocca did not care about American workers the way the people of Kenosha had been told to believe he did.
The fury was not rhetorical. It was the specific, irreversible anger of people who had given something they had not been required to give in exchange for a commitment that was made by one company and disclaimed by another that had purchased the first company and assumed none of its obligations.
The industrial logic behind the closure decision was visible to anyone who examined it without the distortion of self-interest. The factory most obviously suited for closure from a purely operational standpoint was the aging Detroit facility where Chrysler’s K-car line was being assembled. That factory was old. Its infrastructure required investment.
Its production economics were not favorable, but it was Chrysler’s only remaining automobile assembly plant inside the city limits of Detroit. Mayor Coleman Young had worked aggressively in 1979 to help secure the federal loan guarantees that had saved Chrysler from bankruptcy during the Carter administration.
The political relationship between Chrysler and the city of Detroit was a debt that Iacocca was not prepared to repay with a factory closure. Kenosha was in Wisconsin. Kenosha had not saved Chrysler. Kenosha had nothing to offer in exchange for its survival except the labor of its workers.
And Chrysler did not need that labor at a location it had never intended to maintain. December 22nd, 1988 the last automobile came off the Kenosha assembly line. Workers who had spent their entire adult careers in that building, whose fathers had worked there and whose children had been raised in the expectation of following them, walked off the floor for the last time.
Chrysler eventually provided a $250 million retraining package for displaced workers, which Kuzel and Local 72 accepted because it was the only option that remained. The engine facility continued operating under multiple corporate identities through the years that followed, producing V6 engines for Chrysler passenger cars until October 22nd, 2010, when the last engine came off the line and 108 years of automobile manufacturing in Kenosha ended with it.
The city accepted title to the former production property. Demolition of the main facilities began in late 2012 and was completed in the spring of 2013. In the space that remained, the city built Harbor Park. Condominiums facing Lake Michigan, museums, a streetcar line, and green space. These are the things that cities construct when they have made peace with the fact that what was there before is not coming back.
The building on Plymouth Road in Detroit was still standing. Kenosha was condominiums and a streetcar, but Amadeo Leone’s campanile tower still rose above the northwest side of Detroit, still visible for miles, and Lord Kelvin’s inscription was still carved in the stone above the main entrance.
AMC had moved its corporate headquarters to Southfield, but in 1975 occupying a new 27-floor glass tower adjacent to the Interstate 696 interchange. The relocation was a statement about the company’s ambitions at a moment when those ambitions were still plausible. The Plymouth Road complex was retained as the engineering headquarters, primarily for the Jeep and truck lines.
The executive offices vacated. The administrative floors went quiet in the particular way that large buildings go quiet when the people who gave them their purpose have departed. Not empty, but diminished, operating at a fraction of their original intensity. After the Chrysler acquisition, the building became the Jeep and truck engineering center, home to 3,000 designers and engineers developing the Dodge Ram pickup and the Jeep Grand Cherokee.
Sections of the complex were leased to Borman Food Stores, a grocery distribution company that later became Farmer Jack, which renovated portions of the space over multiple years and added a fitness center and cafeteria. The factory that had assembled Sikorsky helicopters and Kelvinator refrigerators was now storing produce and providing cardiovascular equipment for grocery workers.
The building had lost the thread of its own identity so completely that it had stopped trying to maintain one. In 1996, Chrysler announced the consolidation of its design and engineering operations at a new technical campus in Auburn Hills, Michigan, and the evacuation of Plymouth Road began. The process took over a decade, department by department, as lease terms expired and projects concluded.
By 2009, when Chrysler filed for Chapter 11 bankruptcy protection, the last 900 employees working in the Plymouth Road complex were relocated to Auburn Hills. The building stood empty for the first time since Amadeo Leone had finished drawing it 82 years earlier. Detroit inherited the property by default, the city becoming the owner of a structure that had once represented the industrial heart of one of the most important corporate entities in American history, and now represented a problem of a different kind entirely. The property sold in 2010 for $2.3 million, a price that reflected not the building’s history, but its condition and the market’s indifference. It passed through several transactions before coming into the possession of a businessman named Terry Williams, who held a public press conference to announce his intention to convert the
former AMC complex into a comprehensive treatment center for children diagnosed with autism. Williams had a criminal history that included a 2004 conviction for operating an automotive chop shop. The activity that actually occurred at the Plymouth Road site through 2013 was not renovation. The steel framing from the 1940 addition was stripped and sold for scrap metal.
The ornate architectural details from the campanile tower, the decorative stonework, and metalwork that had made the building something other than a functional shed, were removed and disappeared. Williams returned to federal custody on unrelated criminal charges in July of 2013. By that point, the complex had been gutted of everything that had monetary value when measured in scrap weight.
Detroit Mayor Mike Duggan announced a $66 million redevelopment agreement with NorthPoint Development in December of 2021. The former AMC campus would be demolished in its entirety. In its place, NorthPoint would construct 728,000 square feet of new class A industrial space suited for automotive parts manufacturing and logistics with projected employment of more than 300 permanent workers.
Duggan described the building as ruin porn and said the city was sick of looking at it. He said that one by one they were taking down the massive vacant structures that had for too long been a drain on the neighborhoods. The Campanile tower that one preservationist described as resembling the campaniles of Venice came down.
The Lord Kelvin inscription, which had survived a refrigerator company, an appliance conglomerate, a wartime helicopter program, two automobile mergers, a corporate acquisition, a bankruptcy filing, a criminal salvage operation, and 94 years of Detroit weather was buried in the rubble along with everything else.
Before we bury the rubble, we should understand what was inside it. Because American Motors Corporation, the company that could not survive, turned out to have been right about nearly everything that determined the future of the industry that destroyed it. George Romney stood up in front of the American automobile industry in 1955 and said that it was building machines that served theater rather than transportation, that the escalation of size and ornamentation was a market condition rather than a permanent truth, and that a company willing to offer a serious alternative would find customers ready to accept it. The Big Three processed this as the complaint of a company too small and too marginal to be taken seriously. They were wrong about the diagnosis and Romney was right and the proof arrived in three separate waves. The 1958 recession proved him right the first time producing the sales surge that rescued his company. The 1973 oil crisis proved him right the
second time generating a national conversation about fuel efficiency and vehicle size that Romney had been trying to start 20 years earlier. The 1979 energy crisis proved him right a third time collapsing the market for large vehicles with a speed that the big three had declared impossible.
Japanese manufacturers who had been studying the American market with the analytical rigor of people who had no domestic advantage to protect had read the same signals Romney had read in 1955 and built an entire industrial empire on the conclusion. The compact car is now the dominant segment of the global auto mobile market by unit volume.
Romney identified the coming direction of the industry two decades before the industry accepted it. And the 20-year gap between being right and the market rewarding the insight was precisely the gap that consumed his company. In 1979 AMC introduced the Eagle a four-wheel drive passenger car based on the Concord platform with an elevated suspension and full-time four-wheel drive added by the engineering team in Kenosha.
It was not a graceful vehicle. Its proportions were compromised by the necessity of adding the four-wheel drive hardware to a body that had not been designed around it. It sold in modest numbers that did not suggest any awareness on anyone’s part that it was a historically significant product.
It was nonetheless the first production crossover sport utility vehicle in American automotive history. Every Subaru Outback that has ever navigated a snowy road, every Honda CRV that has carried a family to a national park, every Toyota RAV4 and Ford Escape and Chevrolet Equinox and Volkswagen Tiguan and Hyundai Tucson that has been sold in the global automobile market since 1979 can trace its conceptual origin to a decision made by engineers in Kenosha, Wisconsin in that year.
The crossover now accounts for a majority of all new vehicle sales in the United States and a growing share of global vehicle sales. AMC built the first one and sold it to people who mostly had no idea what they were looking at. In 1984, Dick Teague’s design team introduced the Jeep Cherokee XJ.
The Cherokee XJ applied unibody construction to a four-wheel drive platform, an engineering decision that reduced weight, improved ride quality, and allowed the vehicle to deliver car-like handling alongside genuine off-road capability in a package sized and priced for ordinary American consumers.
It was the first vehicle to do all of these things simultaneously. It remained in production until 2001, 17 years after its introduction, which is approximately three times the typical American production run for a vehicle that has not been substantially redesigned. Its influence on the global automobile industry cannot be fully measured because it created the standards against which every subsequent SUV and crossover has been designed and evaluated.
The modern SUV market, the market that now generates more revenue than any other vehicle category in the world, starts with the Cherokee XJ and works forward from there. Chrysler paid 1 and 1/2 billion dollars for American Motors Corporation in 1987. It paid that price almost entirely because of Jeep.
The Jeep brand is now held by Stellantis, the multinational automotive group formed from the merger of Fiat Chrysler and PSA Group, and it generates annual revenue that exceeds everything AMC produced in 33 years of operation by an order of magnitude. The last independent American automaker spent those 33 years creating at great cost and with insufficient capital and against the unceasing pressure of competitors with vastly superior resources, the single most valuable asset in its acquirer’s portfolio.
The company was bought and broken up. The idea that the company had built survived and became worth more than the company ever was. The question that AMC’s story asks and that the story cannot finally answer is what kind of failure it was. Some of it was avoidable. Abernethy’s decision to pursue the full-size market cost the company 3 years of capital accumulation and strategic clarity that it could not afford to lose.
The cancellation of the Wankel engine program by General Motors turned the Pacer from a potential breakthrough into a commercial footnote. The Renault partnership extended the company’s life and simultaneously dismantled the brand identity that George Romney had built. The Kenosha workers gave a labor concession that was used as a negotiating chip by one company and then discarded as irrelevant by the company that replaced it.
Each of these outcomes involved specific decisions made by specific people. Specific people could have made them differently, but the architecture of the failure runs deeper than any individual decision. AMC was fighting on multiple fronts with a budget that could responsibly sustain only one.
It was right about the compact car at a moment when the market was not ready to pay a premium for being right. It was right about the off-road vehicle before the recreational vehicle market had reached the scale needed to reward the investment. It was right about the crossover before the word crossover had been invented.
Being right about the future is genuinely valuable, but it is only monetizable if the company that holds the insight has sufficient capital to remain solvent until the future it correctly identified actually arrives. AMC consistently ran out of capital before the arrival. The factory on Plymouth Road is rubble. The Kenosha lakefront is condominiums and a streetcar line.
George Romney is buried in Michigan and his son Mitt carries the family legacy into a different century. Dick Teague’s papers and his AMX 3 prototype are at the San Diego Automotive Museum. The straight-6 engine that AMC built in Kenosha kept powering Jeep Cherokees on every road in America for years after the factory that created it had been demolished and the land cleared.
Above the door of a building that no longer exists, in stone that is now dust in a Detroit landfill, Lord Kelvin’s words were carved for nearly a century. I’ve thought of a better way. They had. They thought of several better ways as it turned out, and they were right about all of them.
They were simply too small to wait for the rest of the world to understand what they had built, and by the time the understanding arrived, the builders were gone. Being right is not sufficient protection against being small. The last independent American automaker proved that with complete finality and then was taken apart so that the people who took it apart could sell the proof to the rest of the world at a considerable markup.
