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.

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

Companies that vanished: American Motors Corp. -- always the underdog originally appeared on BloggingStocks on Sat, 07 Jun 2008 15:10:00 EST. Please see our terms for use of feeds.

Chrysler has been the No. 3 automaker in the U.S. for decades. It bought Jeep and American Motors along the way, and for over a decade was part of Daimler (NYSE: DAI). Over the last two years, the company fell on hard times and hedge-fund Cerberus was willing to take a chance on it.

Cerberus has done a couple of things to improve the odds that Chrysler may actually be rebuilt. Hiring former General Electric Co. (NYSE: GE) and Home Depot Inc. (NYSE: HD) executive Bob Nardelli was an odd choice. But, under him the company has brought in the former head of Toyota's U.S. operations, as well as the former chief of GM in China. Neither executive could have come cheap.

A stronger Chrysler is probably a bigger threat to General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) than it is to any of the overseas auto firms. Chrysler still sells almost all of its cars in the U.S. It has aspirations of building beachheads in Latin American and China, but that could take a number of years.

Toyota Motor Corp. (NYSE: TM), Honda Motor Co. (NYSE: HMC), and Nissan are already squeezing sales from the two largest U.S. car companies. If Chrysler is going to regain sales quickly, it will have to do what it did under Lee Iaccoca, which is hurt its cross-town rivals.

Chrysler says it will keep all of its brands but cut back some of its models. The devil is in the details on that set of decisions. But, Ford and GM may have something new to worry about.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Can a rebuilt Chrysler threaten Ford (F) and General Motors (GM)? originally appeared on BloggingStocks on Sat, 08 Sep 2007 11:40:00 EST. Please see our terms for use of feeds.

Just as DaimlerChrysler (NYSE:DCX) is getting ready to let Chrysler go out on its own -- whether through a private equity route or with a GM-type suitor, they get hit with a recall. Mind you, not a small recall, but nearly a half a million cars and SUVs. This is the equivalent of being dressed and ready for the prom and then having your pants split in the seat after the first dance. Uncomfortable, annoying, and embarrassing.

The recall encompasses several models from the Jeep Liberty, the Dodge Durango, and the new Dodge Avenger. The latter's name is exactly what's happening to poor old Chrysler. The costs of the recall of course are borne entirely by Daimler, and the dealers must follow up with customers to ensure compliance. All in all, it's one giant pain in the Benz.

Daimler has not quantified the dollar amount involved in this recall and, at the end of the day, it ends up being a rounding error to Daimler's earnings number. Nonetheless, a significant cost it is. The rule of thumb as told to me by a car dealer a few years ago, a "typical, minor" recall costs the manufacturer about $150 per auto, when factoring in labor cost and materials. The dealers love recalls, as it guarantees to keep all the mechanics busy, and no one can blame the dealer or mechanics for the error. For once, customer and mechanic are on the same side.

If the $150 cost per recalled vehicle is consistent, Daimler is facing about a $75 million expenditure, but the timing could not be worse.

Georges Yared is the author of Stop Losing Money Today and Baby Boomer Investing. Please visit www.georgesyared.com

Chrysler's big pain in the Benz originally appeared on BloggingStocks on Sat, 10 Mar 2007 17:10:00 EST. Please see our terms for use of feeds.

DaimlerChrysler (NYSE:DCX) and Chery Automobile Co. of China will join forces to manufacture a line of tiny cars to be sold under either the Chrysler, Jeep, or Dodge brand. The move is the latest in the phenomenon of outsourcing of U.S. manufacturing jobs, as U.S. labor costs would be too high for such inexpensive cars.

The move is a good one for the American consumer. A line of small, affordable cars is good for the financial situation of working Americans and for the environment. If you're like me, you're getting sick of all the big SUVs everywhere, and you'd love a return to smaller compact cars that are better for the planet and less dangerous to other vehicles.

Chrysler goes mini originally appeared on BloggingStocks on Tue, 02 Jan 2007 15:00:00 EST. Please see our terms for use of feeds.