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Nash was convinced that it was on the right road with its small cars—but the company was running out of gas. The war had spawned many bad habits. Competition was rough. Mason made a move to keep the company going by merging Nash-Kelvinator with Hudson to form American Motors Corp., but before he could straighten the company out he died of pneumonia in 1954. Romney was elected president—and heir to a mess of troubles.
Pray & Work. His first act as president was to give his problems "thoughtful and prayerful consideration." Says he: "Prayer is not a substitute for work. First we have to do all we can ourselves to understand a situation. Then when we ask for help, sometimes it is very evident, sometimes it isn't. Sometimes we may well be helped by not getting a decision."
Having prayed, Romney got to work. He reorganized top management, retired older executives to bring in new hustlers. He built up American's selling organization by thinning out weak dealers, got rid of a sales manager who did not believe in the small car. Despite the belt-tightening, American lost nearly $7,000,000 in 1955, lost another $20 million in 1956. Bus drivers stopping at the entrance to the company's cathedral-like headquarters in Detroit called out: "All out for the old folks' home."
Romney cut out the ailing Nash and Hudson big-car lines, concentrated on the Rambler (the Metropolitan now sells about 1,000 units a month). "I knew we were on the right track," says Romney. "The question was: Would the car-buying public discover that in time?"
Wolfson at the Door. Just when American was in deepest trouble, Raider Louis Wolfson appeared on the scene, waving 200,000 shares of freshly bought American Motors stock. Wolfson had chilling news: he wanted to sell off the company's automaking facilities—and had $8,000,000 more to buy stock control if there was any argument. Wolfson was a tough in-fighter who had won many victories, but Romney treated him just as if he were another heckler in Hyde Park.
Romney glowingly described the future of American Motors, and Wolfson decided to let matters stand—if he could have a man on the board of directors. Romney also talked him out of that. But he knew he was living on borrowed time, with only a few months to go before bankruptcy—or liquidation—would swamp the company. Later, after Wolfson had bought 220,000 more shares, he wanted American Motors to finance his acquisition of other companies by trading stock. Romney flatly refused to go along. Then the public finally took to the Rambler. In late 1957 the company nudged into the black—and has been there ever since. Wolfson secretly sold his holdings, later said that American Motors stock was fully priced at 13. Last week it was selling at 35.