George Romney may have been one of the U.S. auto industry’s best post-war leaders, but he made eight big mistakes while leading AMC from 1954-62.
Some of his bad moves were costly enough to almost push the automaker out of business during 1956-57. In addition, two of Romney’s mistakes were (inadvertent) time bombs that helped blow up AMC’s viability after he left for a political career.
Listing Romney’s errors is not meant to take away from his achievements. As a case in point, he wisely chose to stay away from grand mergers and instead focused on building AMC’s economies of scale to a higher level than previously achieved by an independent automaker in the United States. Romney was also prescient to betting on compact cars and emphasizing practical features and manufacturing quality rather than glitzy styling. The letter below illustrates his approach (click on image to enlarge).
A letter from George Romney in a 1962 Rambler brochure
In key respects Romney pioneered Toyota’s formula for success in the U.S. This was only possible because he questioned Detroit groupthink.
Even so, Romney still made some wrong turns. Let’s discuss them in the rough order that they hurt AMC.
Mistake 1: Failing to cut costs fast enough
Patrick Foster (2017) presents Romney as being tough-minded when he cut AMC’s breakeven point during the mid-50s. I would argue that he waited too long to sell off excess plant capacity in California and Detroit.
Romney also spent more than he needed to distinguish the automaker’s full-sized cars. For 1955 the Hudson was placed on the big Nash body after the two firms merged to form American Motors. The cars ended up looking too similar even though much of their sheetmetal was not interchangeable.
Romney’s slowness in streamlining costs resulted in a loss of $6.9 million in 1955 (Foster, 1993). This occurred despite AMC producing almost 154,000 units. As a point of comparison, Roy D. Chapin Jr. said that Hudson on its own was able to break even at roughly 75,000 units (Langworth, 1993).
Oddly enough, the much larger Chrysler Corporation did a better job of penny pinching when it came to styling its Chrysler and DeSoto. Both brands shared almost identical sheetmetal but looked admirably different because of unique grilles, taillights and trim.
Mistake 2: Approving bad designs
We’ll give Romney a pass on the 1955 Nash, whose armadillo front could be blamed on his predecessor, George Mason. However, Romney should own the 1956 Nash’s “refreshing” — which made the car even weirder.
The infamous 1956-57 Hudson also happened on Romney’s watch. Design consultant Richard Arbib was asked to give the Hudson more individuality (Hamlin, 1992). The sheer ugliness of the design killed whatever small hope was left for the brand.
In addition, the strange-looking 1956-57 Rambler was approved by Romney. A facelift in 1958 was much less unique, but it was also far more attractive.
These examples suggest that Romney lacked the design instincts of a top-notch auto executive — although he seemed to get better over time.
Better styling would not have been a panacea. However, it could have helped AMC get through 1956-57 without coming so close to dying.
Mistake 3: Introducing a redesigned Rambler in 1956
One of Romney’s early decisions was to bring out a redesigned Rambler in 1956. This was one year earlier than originally planned. His worry was that AMC might go under if it did not get new products before 1957 (Foster, 1993). That makes some sense, but his plan backfired.
Part of the problem was that speeding the redesign cost an extra $5 million (Foster, 2013). The faster launch also caused production problems. Rambler output fell from the previous year and manufacturing quality suffered (Foster, 2017).
In addition, the new Rambler overshadowed the already struggling full-sized cars. They might have done at least a little better if given more of an updating. A four-door hardtop would have been an easy addition because of AMC’s modern door-frame design. Romney instead gave the new Rambler a four-door hardtop. It ended up selling poorly on the economy car.
Ironically, the existing Rambler might have sold almost as well as the new one in 1956. This is partly because it would not have suffered from production-launch delays. The existing Rambler also had a lower base price and a broader range of body styles. In addition, the most popular models — a longer-wheelbase four-door sedan and wagon — would have been only three years old. A brand-new design was less important because the Rambler no longer had any direct competition in the compact field.
Mistake 4: Building its own V8 engine too soon
Right at the point when AMC was most stretched for dollars, Romney also spent $10 million on in-house V8 engines (Foster, 1993). American Motors had been buying Packard’s big-block V8 for its full-sized cars. In addition, Studebaker offered to swap its small-block V8 in exchange for AMC’s six-cylinder engine (Ward, 1995).
Historians have hotly debated who did what to whom. Nevertheless, we know that AMC started to produce its own small-block V8 in mid-1956 and a larger version in 1957.
One could argue that the in-house V8s better fit AMC’s needs. For example, Studebaker’s engine was heavy and lacked hydraulic valve lifters. Even so, a V8 was a questionable priority for AMC given how focused it was on economy cars. Eights represented only 15 percent of total volume in 1958 and 9 percent in 1960.
AMC would have been better off continuing to buy V8s from Studebaker-Packard until its finances improved in the late-50s or early-60s.
Mistake 5: Throwing away Hudson’s brand DNA
Instead of trying to maintain the brand’s distinctive qualities, the 1955-57 Hudsons were sold as thinly disguised Nashes.
The Hudson did carry over a few items from before the 1954 merger. These included a dashboard instrument cluster, the famed Twin H-Power engine and “Dual-Safe” braking system (Langworth, 1993).
But beyond that there was little to distinguish a Hudson from a Nash. Few styling cues were maintained and the price difference between the brands was modest.
Not surprisingly, 1955 output for the big Hudson fell 44 percent from the previous year’s already low level. Sales dropped even further in 1956-57.
Also see ‘How would a facelifted Hudson have fared in 1955?’
Walking away from Hudson’s legacy was a bad move. The brand’s reputation for performance and safety could have broadened the appeal of AMC’s utilitarian lineup.
Granted, the Nash body and chassis posed some limitations. Even so, plenty could still have been done to improve the car’s roadworthiness. In addition, Hudson innovations such the Italia’s ergonomic seats would have been a nice touch.
The Hudson brand was arguably too far gone to be saved. However, its key qualities could have been transferred to the Rambler, much like when the Nash Ambassador was downsized. Those qualities, perhaps displayed in a halo coupe called the Hornet, could have helped AMC better respond to the “youth market” of the 1960s (go here for further discussion).
Mistake 6: Ditching the original Rambler
Foster lauds Romney for bringing back the original Rambler in 1958. That helped AMC tap into a booming economy car market. Nevertheless, one could argue that Romney was merely fixing a problem of his own making. The original Rambler should not have been ditched in the first place.
AMC could have used the original Rambler’s extra sales in 1956-57. This would have been particularly valuable in 1956, when the upsized Rambler took longer than expected to reach full production.
Even more importantly, entry-level models had been priced well below the upsized 1956 body. By ditching the original Rambler, AMC gave up most of its price advantage over the Big Three’s low-priced cars. In addition, the upsized Rambler did not compete nearly as well against a rising tide of imported cars.
Mistake 7: Not promoting head stylist Ed Anderson
One of the biggest time bombs Romney lit was not keeping Ed Anderson. AMC’s head stylist resigned at the end of 1961 after being denied a promotion to vice president (Foster, 1993).
Anderson’s departure cast a long shadow over AMC. This is because his successor, Richard Teague, was not a good fit. Teague was a talented designer but too fixated on highly-styled coupes.
Also see ‘1965-66 AMC Marlin: Fixing beginner’s mistakes’
In the 1970s Teague gained so much power that he succeeded in putting into production the 1971 Javelin, the 1974 Matador coupe and the 1976 Pacer. Their styling was memorable but they all flopped — and killed AMC as an independent producer of passenger cars.
Anderson’s record was mixed, but his design sensibility was better aligned with what was needed. AMC was too small to afford trendy styling that required frequent updates. Romney’s focus on practical — and slower-changing — cars was more sustainable than styling exercises such as the Matador coupe.
In addition, the quality of Teague’s designs was mixed. As a case in point, his reskinning of the 1965 senior Ramblers was mostly a step backward from Anderson’s clean 1963 design. Slab surfaces broken up by odd creases made the 1965 models look old-fashioned compared to General Motors’ shift toward complex curves.
Teague also contributed a few styling atrocities. For example, the Durante-nosed 1974 Matador sedan was in the same ballpark as any of the worst designs that came out during Anderson’s tenure.
Mistake 8: Fielding two distinct platforms
Romney’s most important early decision was to concentrate on compacts rather than offering them in addition to full-sized cars. This was a brilliant decision not just because compact sales ended up booming in the late-50s. AMC also saved a lot of money by investing in one new platform rather than two.
Curiously, Romney ended up with two platforms anyway. Instead of updating the original Rambler in 1956, the car was upsized. The new body did not lend itself to a short, entry-level coupe because it was too tall and heavy. Thus, in 1958 the original Rambler was renamed the American and kept alive through 1963.
When the Rambler lineup was due for a full redesign in 1963-64, Romney should have placed all models on a single platform. Much like the Chrysler’s K-car platform in the 1980s, AMC could have offered a full range of cars that varied by length rather than width.
Instead, Romney stuck with two platforms. The 1963-64 Ramblers did share an unusual number of parts, such as outer-door sheetmetal. But even with those cost savings, fielding two platforms was still expensive. This would prove to be a key problem for AMC when sales fell off in the second half of the 1960s.
To make matters worse, Romney’s successors went on a product-proliferation spree that further undercut AMC’s economies of scale. Romney can’t be blamed for that, but he set the stage.
Mistakes and all, how good was Romney?
Romney’s tenure at AMC shows how even talented leaders can make mistakes. Six of the eight above-listed mistakes were made within the first two years of Romney becoming CEO of American Motors. He was clearly learning on the fly. That’s understandable due to the complexity of integrating two firms when the market was shifting so quickly.
Despite his missteps, Romney still steered AMC through the mid-50s better than his predecessor would have done. Mason was too wedded to weird “Airflyte” styling and staying in the full-sized field. He also might have continued to be more susceptible to a grand merger with Studebaker-Packard. I don’t see how a merger — however it was structured — could have been more successful than Romney’s go-it-alone strategy.
What if Romney had stayed longer at AMC?
If Romney had stayed at AMC through the end of the 1960s, he might have helped the automaker — and the U.S. industry as a whole — to better respond to a second wave of import sales. For example, mockups of the American developed under Romney were smaller than what came out under his successor, Roy Abernethy.
Then again, Romney’s lack of styling finesse and interest in performance cars might have undercut AMC’s success as the 1960s wore on. The automaker could have struggled if it continued to largely offer “little old lady’s cars.”
Also see ‘Was the ‘Ford blitz’ to blame for the collapse of independent automakers?’
So perhaps Romney left at the right moment. By 1962 he had already made an outsized contribution to AMC. Romney’s exceptional vision and implementation skills were crucial to AMC outlasting all other independent producers of passenger cars.
Even so, Romney was still fallible. His eight big mistakes illustrate how survival in the post-war U.S. auto industry all but required super-human abilities by the executives of smaller automakers.
NOTES:
Production figures are from the Standard Catalog of American Cars, 1946-1975 (Gunnell, 2002).
Share your reactions to this post with a comment below or a note to the editor.
RE:SOURCES
- Foster, Patrick R.; 1993. American Motors: The Last Independent. Krause Publications, Iola, WI.
- ——–; 2010. Hudson Automobiles: An Illustrated History. Iconografix, Hudson, WI.
- ——–; 2013. American Motors Corporation: The Rise and Fall of America’s Last Independent Automaker. MBI Publishing Co., Minneapolis, MN.
- ——–;2017. George Romney: An American Life. Waldorf Publishing, Grapevine, TX.
- Gunnell, John; 2002. Standard Catalog of American Cars, 1946-1975. Revised 4th Ed. Krause Publications, Iola, WI.
- Hamlin, George L.; 1992. “Richard Arbib: Specialty Designer.” Collectible Automobile. Published October: pp. 41-45.
- Langworth, Richard M.; 1993. Hudson 1946-1957: The Classic Postwar Years. Motorbooks International, Osceola, WI.
- Ward, James A.; 1995. The Fall of the Packard Motor Car Company. Stanford University Press, Stanford, CA.
ADVERTISING & BROCHURES:
- oldcaradvertising.com: Hudson (1953, 1955)
- oldcarbrochures.org: AMC Javelin (1971); Chrysler (1955); DeSoto (1956); Hudson (1955, 1957); Nash (1956); Rambler (1956, 1958, 1961, 1962, 1963, 1965)
George was a worthless POS just like his son Mitt…whatever…
Because. . . ?
Can I suggest an 8B, or 9?
Make the Nash fenders & doors narrower, so the cars don’t “dangle” over the wheels, & the wheels are more centered in the wheelwells. (Same applied to the ’57-8 Fury, to a lesser degree.) It goes back to the Metropolitan, & maybe further.
I’d widen the chassis, but from a production standpoint, it might be easier to “push in” the exterior skins. I’ll leave that call to somebody who knows more about it than me.
The following are not mistakes that Romney himself made, rather more omissions that could have helped AMC.
The first would be not fast tracking the AMC Straight-4 engine, the second being not creating a 90-degree V6 from the AMC V8 like Chrysler belatedly did with the LA engine. While the Straight-Six was a decent engine with a long run in production its size and weight would later become a handicap when carmakers needed to downsize as was the case at Chrysler with its Slant-6.
Another which is based on the notion the Nash Metropolitan was essentially a shortened Austin A40/A50/A55 Cambridge from 1954-1959 (launched around the same time and both powered by the B-Series), at least when one compares the width of the two cars would be the idea the Metropolitan could have potentially formed the basis of a post-war AMC analogue of the Willys Americar.
Consider this despite later being enlarged and clothed in Pininfarina styling the 1959-1969 Austin Farina B (aka mk2 A55/A60), still carried over much componentry from the mk1 A55 Austin Cambridge.
Essentially had Nash from the beginning opted to produce an Austin Cambridge sized Metropolitan variant, it would have provided AMC with a sub-Rambler/Rambler American model that could later be updated and rebodied (think similarly styled Fiat 1300/1500 that also formed the basis of the Fiat 125) as well as take advantage of the later 1.6-1.8+ B-Series engines (with International Harvester’s Metro-Mite and early Scout also benefiting instead of remaining stuck with the underpowered 1.5 B-Series). What would replace the sub-Rambler/Ramler American model in this scenario is another discussion altogether yet it could work as a stop-gap.
AMC fielded some of the strangest looking cars (bathtubs and glasshouses) on the market from the 1950s onward. However, the styling of their bread and butter cars – the Rambler American compacts from the late 50’s forward and the AMC Hornet line kept them afloat until Jeep became their salvation. The Javelin and the spin-off AMX were competitive pony cars but the Mustang, Camaro and Challenger trio were simply too formidable for AMC. Perhaps an AMX ragtop would have helped.
Steve, am catching up with some of your well-written archived articles, many of which cover AMC in the mid-Sixties and include counterfactuals. I’d like to offer opinion on a few Romney mistakes that you called out, and add a new one.
The first five mistakes, I believe, were of less consequence given that eventual corporate success was achieved by the end of the decade. That said, your points are well-taken.
Mistake 6: Ditching the original Rambler
Mistake 8: Fielding two distinct platforms
These two, I feel, are related and I think Romney’s mistake wasn’t that he ditched the old Rambler platform in ’56, but that he didn’t keep it ditched for good. The company needed to get down to one platform, and the new ’56 Rambler was a good size that had no significant competition until Lark. That said, when American appeared there was no doubt some cannibalization, and it continued with American’s redesign in 1964. The company ought not have been competing with itself.
Mistake 7: Not promoting head stylist Ed Anderson
This is tricky because I think both he and Dick Teague had value to contribute post-1961. Ed was able to dial in a good solid design for ’63 that spoke to the masses. I’m not sure how strong its legs would have been had it continued through ’66 but I would have taken the chance and “let it ride.”
What of Teague’s ’65 redesign? I agree with your comments about how problematic it looked insofar as Rambler was concerned, but I think it helped Ambassador, and this leads to what I feel was another big Romney mistake.
Mistake 9: Not buying the Packard name from Studebaker
My guess is that the name could have likely been acquired from Studebaker in the early 60s with minimal fuss, were enough money was thrown at South Bend (others may have a different perspective). No question, successfully competing with Mercedes-Benz was an opening for AMC in these years, and I don’t think the Ambassador name was ever going to successfully accomplish it. A new brand name was required, and what better name that that of a grand old marque whose cars were still seen on roads throughout the world. And yes, AMC/Packard needed to become an international force to be reckoned with.
If Teague was fixated on sporty coupes, early on he was even more fixated on Packard. Seems he just couldn’t let the old marque go. The ’65 Ambassador’s exterior design is an example, arguably Packard-like from the front wheels rearward. The cathedral taillights (thin, becoming wider for ’67), the trim below the decklid (compare to a ’56 Patrician/Four Hundred/Caribbean), the bodyside ledge coming off the rear bumper, and on the wagon the wide bodyside applique – all Packard in origin, while Teague was there. Were the ’65/66 Rambler and Ambassador to have continued to use the ’63/64 Rambler’s body and 112 wheelbase, the ’65/66 Ambassador’s 4 inch longer axle-to-dash would have been perfect for Packard, the front only needing hidden horizontal headlights and perhaps a Request-style vertical grill.
For the interior, some of AMC’s ’63 features seem tailor-made for exclusive use on Packard, particularly the head restraints:
https://www.lov2xlr8.no/brochures/amc/63ram/bilder/4.jpg
With American gone it might have been possible to launch Teague’s ’65 116 wb body in ’63, alongside AMC. If not then, certainly by 1964. Perhaps the new Sixes could have been pulled ahead too, though Packard might have made exclusive use of the V8, in all of its various displacements.
My bottom line thinking (today, anyway) is that for 1963, AMC needed to start with Rambler and go upmarket rather than down. Not by widening future Ramblers but by taking all the other actions that Steve has advocated: quality, refinement, technology and lasting design. I also think that the company needed to stay lean, keeping its investment outlays and workforce size down to a minimum, in order to minimize its breakeven and stay agile. At the same time it needed to drive averaging transaction prices up, through superior product and the effective marketing of two compelling names (AMC Rambler and Packard rather than AMC Rambler and AMC Packard). The basic 4-door sedan needed to be its anchor, communicating a commitment to transporting 5-6 people safely, comfortably, efficiently and trouble-free, and retaining strong trade-in value through lasting design. Coupe and wagon derivatives could have followed but the center of gravity needed to be sedans… for a while, anyway.
Did this work-up some time ago and can’t remember where I pulled the Ambassador image from. Website host courtesy AACA Forum. Represents Request’s approach to the classic grill, leaving the bottom unprotected.
https://content.invisioncic.com/r277599/monthly_2022_07/48811395_1965ambf3qvspackard.jpg.3c4b878f24b80b213ee69962d629456c.jpg
Some needed clean-up on that 1963 Packard (AACA Forum).
https://content.invisioncic.com/r277599/monthly_2022_07/400584516_1965AmbassadorvsPackard116.jpg.c4c0c337f1f3f9fe96e46f4e9addc4d6.jpg