With Mitt Romney going to Washington (4th time’s the charm), I decided this would be a good time to talk about his father’s business career.
When the Korean war started, the US still had a fair number of small automakers left over. But soon, the Big 3 decided to turn the screws on these little minnows. They cut prices to levels well below what these small companies could afford. The result was an urge to merge.
In 1954, Nash-Kelvinator, where George Romney worked as Vice President, merged with Hudson Motor Company to form American Motors (AMC). George Mason who headed Nash became the new company’s chairman but died just months later. Romney was left in charge.
The new company was burning through cash quickly. By 1957, it looked like AMC was headed for that dealership in the sky.
Romney knew competing directly with the Big 3 was hopeless, so he decided that AMC’s only hope for survival was to carve out its own niche market.
In 1956, AMC brought out the Hudson Rambler. It was substantially smaller than other domestic cars, it was probably the first midsized car before that term existed.
In 1957, Rambler became its own brand and the hopelessly unprofitable Hudson and Nash nameplates were killed off.
AMC’s knight in shining armor arrived in 1958 with the new Rambler American. It was another niche model. Filling in the gap between the VW Beetle and traditional American sedans. It was well timed too, the Eisenhower Recession that year brought small, fuel sipping cars into style. The company was saved. Sales doubled in 1958 over 1957 and doubled again in 1959. By 1961, Rambler was outselling Oldsmobile, Plymouth, and Buick, behind only Chevrolet and Ford.
In 1962, Romney resigned as company President and went into politics. He was elected governor of Michigan, then after a failed Presidential campaign in 1968, became HUD secretary under Nixon.
AMC Tragically fell into old patterns under its new management. It tried going back into the large car business. Yet it survived the 1960s.
The troubled Pacer brought the company to its knees again. It creeped along zombie like through the 80s until being bought by Chrysler in 1987.