The End of American Motors Corporation, Episode 6: The Last Independent Automaker

The TTAC Creators Series tells stories and amplifies creators from all corners of the car world, including culture, dealerships, collections, modified builds and more.

Joe Ligo is an Emmy Award-winning TV producer and the director of The Last Independent Automaker, a six-part documentary on the history of American Motors Corporation. He's also the creator of the webseries AutoMoments, which features reviews and stories of classic cars. Previously he's worked with Hagerty, The Drive, The Autopian, and MotorWeek. He owns a 1972 AMC Ambassador Brougham sedan.

"The End of AMC" is the sixth and final episode in The Last Independent Automaker documentary series on the history of American Motors Corporation. Also titled "The Betrayal," the episode begins in 1983 with French automaker Renault owning 46.1% of American Motors, and it details the events leading up to Renault selling its share of AMC to Chrysler in 1987.

A transcript, cleaned up by AI and edited by a staffer, is below.

[Image: YouTube Screenshot]

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Transcript:

In September 1982, the partnership between American Motors Corporation and French automaker Renault produced its first new product: the Renault Alliance. Marketed as European technology with strong fuel economy, it was built in America to be affordable. Produced by AMC, the 1983 Renault Alliance was named Motor Trend Car of the Year, exactly 20 years after the Rambler lineup won the same award.

The Alliance arrived at the right moment. Buyers wanted a comfortable, attractive, and roomy car with excellent fuel economy, and that’s what the Alliance offered. But the success came at a cost. To finance the partnership, AMC sold 46.1 percent of its stock—and much of its independence—to Renault. As Renault’s role in AMC grew, the French approach to management slowly became more dominant.

By 1983, the UAW Local 72 was thrilled as thousands of laid-off employees returned to work, building Alliances at AMC’s Kenosha plants. Production of the AMC Eagle shifted to a smaller Canadian factory. Renault executive José DeRogatis celebrated the new car’s success, but tensions between management and the union persisted.

Three years earlier, plant supervisors had sued activists John Drew, John Melrod, and Todd Anstad over their newsletter, The Fighting Times, which accused supervisors of racism, sexism, and harassment. The case went to trial in October 1983. Dozens of workers testified, and the jury sided with the activists. AMC was ordered to cover their legal fees, and the three became heroes at the plant, eventually rising as union leaders.

In 1984, AMC’s Jeep division prepared to launch its first all-new product in more than a decade, the XJ Cherokee. Renault required a design competition between European stylists and AMC’s in-house team, led by Richard Teague and Bob Nixon. AMC’s design won overwhelmingly, frustrating Renault management, who didn’t fully understand the American four-wheel-drive market. The new Jeep Cherokee became the first SUV to win all three 4x4 of the Year awards in 1984. With better efficiency, ride quality, and off-road capability—plus the availability of four doors—the Cherokee helped spark the modern SUV boom.

AMC’s legendary designer Richard Teague retired in 1985 after 26 years. Meanwhile, Renault expected AMC to return to profitability. From 1980 to 1983, AMC lost $340 million. To raise cash, AMC sold its government vehicle division and even its headquarters building, leasing it back as a tenant.

Gasoline prices stabilized, and big cars were selling again, while AMC and Renault only offered small cars. The Renault Encore, a European-styled subcompact, struggled in the U.S. market. Quality problems also emerged. Cars leaked oil and struggled to start in cold Wisconsin winters. Sales collapsed, and AMC’s massive plants were running far below capacity, losing money.

In 1981, AMC had promised workers a 10 percent wage cut would be repaid later. When the bill came due in 1985, AMC couldn’t afford it. Local 72 prepared for a strike, but union president Rudy Kuzel persuaded members to accept further concessions to avoid layoffs.

In France, Renault chairman Georges Besse faced political pressure. The French government, which partially owned Renault, was furious about losses in America. Besse wanted to keep AMC, believing in the upcoming Renault Premier sedan, but in 1986 Chrysler’s Lee Iacocca began secret talks to buy AMC.

That November, Besse was assassinated in Paris by a terrorist group. In the aftermath, Renault quietly negotiated with Chrysler. By March 1987, Renault agreed to sell its AMC stake. Chrysler completed the $2 billion purchase in May. Jeep was the prize: developing a competitive SUV from scratch would have cost Chrysler billions, but AMC had already done the work.

Chrysler kept Jeep largely intact. Workers in Kenosha initially celebrated when Iacocca promised five more years of production. The Eagle brand was launched to house the Renault Premier and remaining AMC products. But by 1988, Chrysler reversed course, closing AMC’s historic Kenosha plants and eliminating thousands of jobs. Workers accused Chrysler of betrayal; Chrysler blamed decades of labor disputes.

Kenosha’s closure marked the end of America’s last independent automaker. Chrysler absorbed Jeep, the Cherokee, and the upcoming Grand Cherokee project. AMC’s employees, known for their resilience, were absorbed into Chrysler, where many continued their careers.

By late 1987, AMC ceased to exist. The Jeep brand, however, would go on to become one of Chrysler’s most valuable assets.