In their race with ruin, the new bosses of American Motors Corp. last week decided to rev up their smallest and—nowadays—least popular car: the compact Rambler American. "Between the small imports and the nearest U.S.-built models, no American car is reaching out to the consumer," said Roy D. Chapin Jr., who became A.M.C. chairman only four weeks ago. "The Rambler is going to be driven right into the center of this gap."
By promoting the low-priced ($2,073) Rambler—along with a separate $300,000 splash of ads plugging the company's size and zest—American was obviously trying to regain the image of its halcyon days. Back in the '50s, then-President George Romney captured most of the U.S. market for compacts with his hoots at larger models as "gas-guzzling dinosaurs." Though American followed along with other models (Ambassador, Marlin) when car buyers' taste returned to the larger size, and even stretched the length and breadth of some Ramblers, its share of U.S. auto sales steadily slipped, from 6.4% in 1960 to a mere 3.2% last year. In fiscal 1966, A.M.C. lost $12.6 million, and last week Chapin and new President William V. Luneburg had more bad news for their annual meeting.
With sales off 10% from a year earlier, to $257 million, the company lost another $8,459,917 in the first quarter of its 1967 fiscal year. For the sixth straight quarter, the directors voted to skip a dividend. To reduce inventories, American's plants will close for ten working days, the second such shutdown in two months. Having virtually exhausted a $75 million line of credit from 24 banks the company last month arranged an additional $20 million loan. All $95 million is due in May, but Chapin called the loans "renegotiable."
Despite misfortunes Chapin managed to sound optimistic. A.M.C. has not only pared costs by $27 million a year but has restocked executive ranks. More product changes are under way, and there are plans to put the Rambler into racing—to bolster its sporty image. "There is no time to spare," said Chapin, "but we believe there is time enough."