AOL Money & Finance

Companies that vanished: American Motors Corp. -- always the underdog

This post is part of a series on some of the most memorable companies that have disappeared.

America loves an underdog. And for all its 33 years, American Motors Corporation (AMC) was clearly an underdog.

The American automobile company was formed on January 14, 1954, by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company, in an effort to challenge the "Big Three" automakers -- General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler. At the time, it was the largest corporate merger in U.S. history, and the new carmaker became the steward of the popular Hudson Hornet and Nash Rambler lines.

After chairman George Romney retired from AMC in 1962 to run for governor of Michigan, the company struggled to come up with a way to compete with such popular "pony cars" such as the Ford Mustang. Sticking with its strengths in fuel economy, AMC introduced the Gremlin in 1970, its most popular car since the Rambler. The AMC Pacer followed in 1975. The Pacer was wider than Gremlin and featured fishbowl windows designed to eliminate blind spots. Unfortunately, it also had a bigger engine, which ran counter to trends during energy crisis of the mid 1970s. Some blame the Pacer's failure to catch on as the reason for the ultimate demise of the company.

AMC limped into the later 1970s and early 1980s largely on the strength of its Jeep brand. The company faced recalls of its products and stopped paying dividends to its investors. When no bank would loan AMC more money, it turned to French automaker Renault for help. Renault came to own the controlling stake in AMC. By 1983, all AMC models were rebranded as either a Renault or a Jeep. Jeep Cherokee came to popularity in this era and practically invented the SUV category.

But in 1987, struggling Renault sold its stake in AMC to Chrysler, where it became Jeep-Eagle division.

The AMC Gremlin may have been called one of the worst cars ever, but to this day the boxy little car with the big heart has its hard-core fans.

Let us know in the comments what you miss about AMC. And be sure to check out other Companies That Have Vanished.

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Last updated: November 25, 2009: 11:40 AM

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