Why didn't AMC get a bailout?

[280Z Turbo]

I'm curious, why didn't AMC get a bailiout like Chrysler did? I don't much about the fall of AMC, but it would be interesting to compare it to what's going on now.

Was it too small for anyone to care?

[cawimmer430]

Was it too small for anyone to care?

I'm no expert on this subject either but I would think that a bailout would just have prolonged the misery of AMC. Weren't their sales in the toilet anyway? I mean people weren't obviously buying their cars and I doubt a bailout would have turned things around. Maybe AMC had lost most of its appeal by then already.

[AutobahnSHO]

that was  before the crazyiness of bailouts

[MX793]

AMC was bought out and parts of it live on today (namely, the Jeep line).  Had there been someone in line to buy either Chrysler or GM, I somehow doubt there would have been the bailouts that we've seen.

[the Teuton]

The fit hit the shan for AMC in 1987, right?  Reagan did do a bank bailout with the savings and loans crisis, but it wasn't as convoluted as Obama's spiel.

My guess:  different era, different Democrat running the White House (yeah, you heard me...that's not a typo).

[ifcar]

that was  before the crazyiness of bailouts

Chrysler 1979ish?

[93JC]

AMC didn't get a bailout because the decline was slow and spread out over the course of ~15 years. That, and they were never "too big to fail".

[the Teuton]

Speaking of AMC leadership, I've heard that George Romney was a good president of the company.  But I wonder why they ultimately failed, even with some incredibly popular, innovative products.

[Madman]

AMC did get a government bailout...........from the FRENCH government!

Renault (which, at the time, was a state-owned company) bought 22.5% of AMC in 1979.  Eventually, Renault increased it's stake to 49% by 1983.  After the death of Renault's then president, Georges Besse, was assassinated by terrorists, Renault's new president decided to divest the company of all non-core assets in 1987.

That same year, Chrysler purchased AMC from Renault for $1.1 Billion.


Cheers,
Madman of the People

[93JC]

They failed because Honda and Toyota gobbled up their market. Cars like the Hornet, Gremlin and Pacer needed a good four-cylinder engine. AMC had none. They eventually started buying four-bangers from Audi and GM, but it was too late. After sinking a lot of money into making a front-drive, rotary-powered Pacer and ending up with a relatively derivative six-cylinder, rear-drive Pacer that was slow and didn't get very good mileage, the writing was on the wall.

The takeover by Renault was pretty much the nail in the coffin. Products like the Encore and Alliance could have been successful if the designs were stronger and build quality was better. By the time Chrysler bought AMC there wasn't anything left in the pipeline but the Premier.

[S204STi]

Speaking of AMC leadership, I've heard that George Romney was a good president of the company.  But I wonder why they ultimately failed, even with some incredibly popular, innovative products.

I dunno man, other than the Jeep and the AMX/Javelin and Pacer there aren't any real standout cars that I can think of.  Maybe someone can enlighten me as to what I'm missing here.

[the Teuton]

I dunno man, other than the Jeep and the AMX/Javelin and Pacer there aren't any real standout cars that I can think of.  Maybe someone can enlighten me as to what I'm missing here.

The Eagle line, Jeeps in general...you're right.

Why did they kill the "real" AMX in 1972?  A little under 20,000 wasn't nearly enough!  I've mentioned that my dad bought a brand new 1969 AMX 343, right?

[Madman]

Had Georges Besse not been killed, Renault would have never sold their US operations to Chrysler.  Besse was determined to make Renault succeed in North America and made American operations a priority.

I'm sure the AMC brand would have died anyway, leaving Renault and Jeep.  The Alliance and Encore (R9 and R11) would have been replaced by the R19 hatch and the R19 Chamade sedan which itself was later replaced by the Megane.  The R21/Medallion would have been replaced by the Laguna.  The Premier was loosely based on the R25 and was unique to North America.  Maybe Renault would have continued this theme and Americanised the Safrane and later, the Vel Satis?

A US-spec Espace prototype was built but never sold in North America.  I always thought this was strange considering the runaway success of Chrysler's minivans.  The Alpine was also slated to come here but, alas, Renault's impending sale to Chrysler scuttled those plans at the last minute.

Renault could have been a major force in America but the short-sighted management that replaced Besse didn't seem to care.


Cheers,
Madman of the People

[the Teuton]

Again, I think the quality of the cars ruined it for them.  Renaults in America just weren't that good, Madman.  My brother's first car in 1990 was an Encore hatchback.  He paid $800 or so for a 5-year-old car, and it worked for him until he beat the hell out of it and trashed it about 2 years later.

The value of that car tanked.  It's not like it was a terrible car; it was just not well put together, and it wasn't the right car for the market at the time.

[Madman]

Again, I think the quality of the cars ruined it for them.  Renaults in America just weren't that good, Madman.  My brother's first car in 1990 was an Encore hatchback.  He paid $800 or so for a 5-year-old car, and it worked for him until he beat the hell out of it and trashed it about 2 years later.

The value of that car tanked.  It's not like it was a terrible car; it was just not well put together, and it wasn't the right car for the market at the time.

I'm quite familiar with US-built Renaults.  I once owned a 1983 Alliance DL sedan.  It was an average car for it's time; no better, no worse.  Not right for it's time?  I beg to differ.  In the early 1980s, people were interested in small economical cars and the Alliance and Encore were quite successful.  I sure as hell saw them EVERYWHERE back then!  However, Renault faltered later in the decade by not introducing larger models fast enough.  The R18i was too dated and by the time the R21/Medallion came on the scene it was already too late.  Renault should have had the Espace in American showrooms by 1984-5 to take advantage of the minivan boom but it never happened.

It was only after Renault bailed out of North America that residual values tanked, as you would expect to happen with an orphaned car.


Cheers,
Madman of the People

[the Teuton]

I guess that makes a bit more sense.  There's a really nice Alliance down the street.  I'm surprised it still looks as good as it does.

But 61 hp wasn't what I'd call that much.  Compared to its competition, I'm sure it wasn't that big of a deal. 

Like I said, the car just wasn't that well-built for our market.  You can correct me on that if I'm wrong.

[93JC]

The only thing that would have saved AMC/Renault was significant advancements in build quality and design. The designs of the Alliance, Encore, 18i, etc. were just too compromised by the inherent lack of quality. They were crap.

The best car they made at the time was the Premier, and even then it was let down by the crappy PRV V6, junk German transmissions and flimsy Bendix electronics.

[the Teuton]

The Premier was ahead of its time, but you're absolutely right, Mark.

[93JC]

The Premier especially was pretty tragic. Had it come out a couple years earlier with better underlying parts we might not even be having this conversation. It was a smart design that was well thought out, inside and out, but the underlying bits were just shit. The V6 had a fundamnetally flawed cooling system, and the electronics were a ticking bomb. The best assembly practices in the world couldn't have saved it.

[AutobahnSHO]

I pretty much discarded a 91 Premier.
Got to Germany in 2001 w/ ~$2200 to spend on a car. Wife INSISTED on an auto transmission, so the first we saw we grabbed.
White on red, it was a CRUISER. Floated on the highway. (not the good float.) Hella legroom in the back. Weird french turn signal stalk. Blown fuses. (regularly.) alternator/battery issues. light problems. Overheated twice. HUGE car.

It still ran but after I found the SHO I paid $75 to "donate" it to the Morale Welfare Recreation fund, who probably crushed it a month later. (I didn't see anyone buy it and drive it.)
---I should have just fixed it and sold it, but oh well..

[Madman]

The only thing that would have saved AMC/Renault was significant advancements in build quality and design. The designs of the Alliance, Encore, 18i, etc. were just too compromised by the inherent lack of quality. They were crap.

Like I said, it was an average car for it's time; no better, no worse.  Pretty much EVERYTHING was crap back then, at least by today's standards.  A mid-'80s Escort, Cavalier, Omni/Horizion, etc. were no better, that's for sure!

Cheers,
Madman of the People

[93JC]

True, but Civics and Corollas and Tercels: they were better. Ever so slightly perhaps, but that was enough.

[AutobahnSHO]

True, but Civics and Corollas and Tercels: they were better. Ever so slightly perhaps, but that was enough.

WTFrak??
They were tiny, underpowered, not even as nice as an escort or whatever. They sold because they were cheap.

Kinda like KIA started out cheap recently, then went more upscale..

[ifcar]

I don't recall them being cheap in the 80s. They sold for their reliability reputations.

[Byteme]

My wife had an Alliance when I met her.  I remember it a a pretty decent little car that got very good gas mileage.  I can't speak for long termreliability or resale value but I remember it as about the same as most of the other small cars available at the time.   Specifically I remember the seats and seating position was quite comfortable and it had a lot of room for a car that size.

[Byteme]

The conditions leading to AMC's demise were different than Those confronting Chrysler Corp in the 1979-80 time frame.  And Chrysler, unlike AMC, owned some companies and held some contracts that were critical to the defense industry.  Or so I have been told.

[L. ed foote]

WTFrak??
They were tiny, underpowered, not even as nice as an escort or whatever. They sold because they were cheap.

I dunno about that.  The only hot escort out there was either the GT, or the EXP, but most models put out near the same output.  I think the Yotas were lighter than the escort tho'

[93JC]

And Chrysler, unlike AMC, owned some companies and held some contracts that were critical to the defense industry.  Or so I have been told.

Designed and built by AM General Corporation (formerly the General Products Division of the Kaiser-Jeep Corporation), a wholly-owned subsidiary of AMC until 1983.

[AutobahnSHO]

I don't recall them being cheap in the 80s. They sold for their reliability reputations.

Sure, the early 80s were very reliable and cheap: during the 80s the price started creeping due to their reputation and they started building bigger cars. (The current little car- the Civic, is much larger than their largest car, the Accord, of the 80s.

I drove the late 70s toyotas and Hondas, they were very sparse, built solid as far as mechanicals, but stripped down, compared to US cars at the time. Although cheap US cars still bigger..

[the Teuton]

Designed and built by AM General Corporation (formerly the General Products Division of the Kaiser-Jeep Corporation), a wholly-owned subsidiary of AMC until 1983.

This is how we shall see a resurgence of one of the most innovative brands in the market!  AMC will be like Tupac or the Antichrist!