A Deadly Misadventure

DTW recalls the alliance between Renault and American Motors Corporation that proved highly damaging to the French automaker and had fatal consequences.

1988 Eagle Premier(c) blog.consumerguide.com

American Motors Corporation (AMC) was long the plucky underdog of the US automotive industry, always struggling to compete on equal terms with the ‘Big Three’ of General Motors, Ford and Chrysler. AMC had itself been formed from the 1954 merger of Nash Kelvinator Corporation and the Hudson Car Company(1). This was a merger driven out of weakness rather than strength, as neither partner had the financial or technical resources to continue independently.

With a market share of just 4%, AMC was still a fraction of the size of the Big Three, but there was a larger plan in play, devised jointly by George Mason, President of Nash-Kelvinator, and James Nance, President of the Packard Motor Car Company. Packard would acquire the rival Studebaker Corporation, then AMC and what became the Studebaker-Packard Corporation would merge to form a single large company to compete on more equal terms.

Unfortunately, Mason’s untimely death in October 1954 at the age of 63 brought an end to the larger plan. Mason’s successor, George Romney, wanted AMC to continue independently and concentrate on small cars, a market segment of less interest to the Big Three. The legacy marques were retired in 1958 in favour of Rambler and Metropolitan, the latter used only on a small car manufactured by Austin and imported from the UK from 1953 to 1961.

Romney left the company in 1962 to pursue a political career and his successor, Roy Abernethy, reintroduced larger models to try and improve its financial performance. The company enjoyed periods of profitability during the 1960’s and the Rambler brand was replaced by AMC in 1966. However, the increasing cost of developing new models to remain competitive was becoming unsustainable for AMC, given the company was still very much a minor player in terms of sales.

Abernethy’s successor, Roy Chapin, made a very astute acquisition of the Kaiser Jeep 4WD utility vehicle business in 1970. This gave AMC access to proven 4WD technology and a different market segment, where it was the leading player. In the same year AMC introduced the Hornet, a compact saloon that would become the bedrock of the company’s range. The Hornet was replaced by the Concord in 1977, but the latter utilised the platform and many of the mechanical components of its predecessor.

The Hornet platform would also provide the basis for the Gremlin subcompact and its 1979 successor, the Spirit. AMC employed its 4WD technology on the Eagle, another derivative of the Hornet, which established a niche for itself as a passenger car for arduous rural driving conditions. It was, in effect, the first crossover in the modern sense. One controversial addition to the AMC range was the 1975 Pacer, dubbed “the first small wide car” with unusual proportions, a rounded shape and large glass area. It was an object of mirth for many but has since acquired something of a cult following.

1975 AMC Pacer (c) oppositelock

By the late 1970’s however, AMC’s range was looking increasingly threadbare and dated. The large Matador saloon and Pacer subcompact were discontinued in 1979 and 1980 respectively, so what remained was based on a single architecture that was over a decade old. AMC’s market share had dropped to just 2%

AMC needed a partner to inject capital and help develop new models, and that partner would be Renault. Initially, the French company injected US$150 million new capital into AMC, primarily for access to the company’s dealer network. Renault’s presence in the US market was tiny, having never recovered from the debacle of the Dauphine, the last Renault to sell in serious numbers there. The fragile Dauphine proved to be totally unsuited to US conditions, either breaking down or rusting away at an alarming rate.

Unable to persuade its banks to extend further credit, AMC shareholders voted in favour of a Renault takeover in December 1980. A plan was formed for AMC to manufacture and sell Americanised versions of Renault models. The first such models were the Alliance and Encore, based on the Renault 9 and 11 respectively. Consideration was given to selling the models under the AMC brand, but market research indicated a somewhat more positive perception of the French marque, so they would be sold as Renaults, albeit with discreet AMC logos on the publicity materials.

1983 Renault Alliance Advertisement (c) autotitre.com

The Alliance was launched in June 1982 as an 1983 model, in two and four-door saloon forms. The most obvious visual change over the European 9 was the adoption of twin standardised(2) rectangular headlamp units instead of the 9’s model-specific single units. The twin headlamp design was also incorporated on European specification Renault 11 models. The Alliance was well received and sold over 140,000 units in its first year on the market. The Encore was launched in 1984 in three and five-door hatchback forms. The additional variants boosted sales to over 200,000 units in that year, helping to return AMC to profitability for the first time since 1979.

1984 renault Encore Advertisement (c) topworldauto.com

Trouble was brewing for Renault at home, however. Faltering European sales and the cost of its North American investments, including a new manufacturing plant in Canada, had pushed the parent company into losses. Georges Besse was appointed chief executive of Renault in January 1985 with a mandate to stem the company’s losses and improve efficiency. Besse instigated a plan to close plants and lay off 21,000 workers. This was bitterly opposed by the auto unions, as was his continued support for the AMC operation, which was characterised as the company ‘exporting’ French jobs to North America.

Shockingly, Besse was assassinated outside his Paris home on 17th November 1986. An anarchist group, Action Directe, later claimed responsibility for the killing, citing Besse’s Renault strategy as the motivation(3). At trial, four members of the group pleaded not guilty but were convicted, two for murder and two for conspiracy to murder.

Besse’s successor at Renault, Raymond Levy, allegedly under pressure from his fearful senior colleagues and French President François Mitterrand, undertook a review of the AMC operation. Sales of the Alliance and Encore were faltering because of a growing reputation for unreliability and poor dealer support. Low petrol prices were encouraging American motorists to trade up to larger cars, where AMC had no presence. Levy started the search for a buyer for Renault’s stake in AMC.

1989 Eagle Medallion Wagon (c) curbsideclassic.com

A federalised version of the Renault 21 called the Medallion was launched on 1st March 1987 as a delayed replacement for the AMC Concord, which had stopped production in 1983. The Medallion was not built by AMC but was a ‘captive’ import from France. Just over a week later, Chrysler Corporation agreed to buy Renault’s stake in AMC.

In September 1987, the model for which the new Canadian AMC plant had been built, the Premier, was launched. Based on the Renault 25, the Premier featured a new three-box body styled by Italdesign, which was smooth and contemporary with a drag coefficient of just 0.31, but possibly erring towards blandness. The Premier was an even longer delayed replacement for the AMC Matador, which had stopped production in 1979.

Because Renault no longer had any involvement, Chrysler chose to invent a new marque, Eagle, for the Premier, rather than try to resurrect AMC. The Alliance and Encore models had been discontinued by Chrysler in June 1987 because they were regarded as unwanted competition to Chrysler’s own small cars, and sales had fallen dramatically in any event.

The Medallion was rebranded Eagle in late 1988 for the 1989 model year but was discontinued after just twelve more months. The Premier, also sold as the Dodge Monaco, limped on until the end of 1991. Both Renault-derived models were dismissed by Chrysler Chairman Bob Lutz as “salesproof” in his 1998 memoir ‘Guts’. A total of 139,051 Premier and Monaco models were built over four years, far short of the projected annual sales of 150,000.

1991 Eagle Premier (c) justacargeek.com

Renault retreated from the US again and has not returned since. AMC posted losses of US$767 million while under Renault ownership, while Renault itself posted losses of US$6 billion over the same period(4). Far worse than the financial losses, however, was the murder of Georges Besse, the most tragic consequence of Renault’s deadly American misadventure.

(1) Technically, Nash acquired Hudson.

(2) The 165 x 100mm unit was one of the standardised sizes mandated by Federal Motor Vehicle Safety Standard 108.  The intention of this standard was to ensure that a replacement headlamp could immediately be found at any local gas station, should one fail or be damaged.

(3) Bernard Hanon, Renault’s former CEO whom François Mitterand had fired and replaced with Besse, remarked later in conversation with designer Robert Opron that Mitterand had “saved his life”. Apparently, Hanon’s name was on Action Directe’s  hit-list but was removed and replaced with Besse’s after the former had been sacked.  The conversation is quoted in Peter Pijlman’s book, Robert Opron: L’automobile et L’Art.

(4) Data from Automotive News Europe http://www.europe.autonews.com

Author: Daniel O'Callaghan

Shut-line obsessive...Hates rudeness, loves biscuits.

30 thoughts on “A Deadly Misadventure”

  1. It wasn’t all doom and gloom though – the Jeep XJ was born from the alliance, and that’s pretty good!

    1. Not only that, but Renault’s input into the XJ was quite substantial, as it was Jeeps first monocoque. No money from Renault = no XJ.

    2. Hello bjarnetv and Ingvar. You’re right, and I’ve a bit of a soft spot for the XJ Cherokee. When I opted out of our company car scheme and needed to replace our Discovery, I stumbled across a facelift version in metallic blue ‘Sport’ (i.e. basic) spec, just like the one below:

      It was a year old with 12k miles, looked like new, and was offered for 60% of the list price, so I couldn’t resist. It was a completely mad purchase, a 4.0 litre straight-six petrol automatic, big on the outside, small on the inside, but I absolutely loved it! It pulled like a train, had a lovely engine note and you had to be very careful not to lose the tail in the wet. I learnt all about opposite lock on wet roundabouts!

      We kept it for three years and put 50k on it before trading it in for a Ford Ranger double-cab pick-up truck, but that’s another story.

    3. Those Jeeps are rather appealing, aren’t they? Though I couldn’t for the life of me explain why… There was a jealously kept example where I used to live and it always caught my eye.

      Quite a change from Jeeps and pick-ups to a Boxster Daniel!

    4. Hi Chris. The explanation for the pick-up was that in 2000 my partner and I undertook the renovation of a beautiful but dilapidated Recency country house on five acres of land. It was a four-year project and a pick-up truck was just the ticket for hauling all the materials necessary for the work. The Ranger looked like this one:

      It was a great workhorse, but a bit evil when driving unladen in the wet: the rear wheels would lock up all too readily giving me the occasional heart-stopping moment! The other disadvantages to driving a pick-up are nowhere out of sight to hide luggage, and other people treating the load bay as a rubbish bin when parked up. Amongst many items discarded for me to dispose of properly was a dildo…

    5. I am nobly resisting the temptation to make an inappropriate joke and will simply say that you have moved up in the world, car-wise. 😉

      Hope the house was worth all that work.

  2. Lovely article Daniel. Why Chrysler adopted the name Eagle for the products it gained seems to be a mystery to me. Surely they could have used the somewhat tarnished but known AMC brand, or Plymouth or Dodge? .H*ck there could have even been a Jeep sedan. All wheel drive like the amc eagle of yore. I must be ranting. The premier actually looks rather attractive, if not for that significant front overhang. Most of Eagles products were afaik rebadged Mitsubishis. Atleast Chrysler got a sweet deal though

    1. Thanks, Andrew, and you makes a good point about the branding. Despite what I read, and wrote above, I remain sceptical that Renault really was preferred by US consumers over the AMC brand, which was still ‘warm’ and could easily have been relaunched. If you weren’t old enough to remember the troublesome Dauphine, then Renault would have meant little to you in the US, just the name of some ‘funny foreign car’.

      The Premier is not offensive, but Renault made an infinitely better job of the 25 on the same platform. It would have been so easy to convert the 25’s glass hatchback to a three-box saloon, so why on earth did they squander money with Italdesign to start again?

  3. Eagle must the most mongrel brand ever conceived in terms of the origins of its diverse products. It even beats the confections that emerged from BL´s necrotic slime.

    1. “necrotic slime” is a just brilliant description, Richard! I must remember that for future use!

    2. Speaking of the confections that emerged from BL’s necrotic slime, the Eagle Premier puts me in mind of the early-70s Australian market P76. If one squints a bit, it even looks a little like one in profile. It was certainly about as long lived in the marketplace and at least as successful.

    3. Now why would you say that? If you want true mongrel brands, try Asuna or Geo — Isuzu and Suzuki in GM speak. At least the Eagle Premier was an actual separate car sold at Jeep dealers. The range was expanded when the Japanese partner of Chrysler, Misubishi, decided to open a new factory in Illinois, and the Eagle Talon sports coupe appeared at Jeep dealers while Mitsubishi called theirs the Eclipse. No other Eagles appeared. So there were just two, not “diverse products”!

      Chrysler used to sell Misubishis as Dodge Colts, Vistas, Arrows, Sapporos and Conquests, while Mitsu used their usual names. This was before the Renault debacle and purchase.

      I purchased a new 1990 Eagle Talon AWD turbo, otherwise known as Mitsubishi GSX Turbo. They were part of the Jeep dealership line-up, sold alongside Wranglers and Cherokees (the XJ as you call them which not a soul did here) Those Talons and Eclipse cars were the precursors of EVOs. I got mine in mid 1990 after test driving a 1986 Audi quattro, which the Eagle bettered in every way but gearchange, with 40 more horsepower and a much better AWD system, with a planetary differential and a slip limiting viscous coupling on both the centre and rear differentials. The Audi was open centre and rear differential with clunky locks. The Eagle Talon and Mitsubishi cars were made in Illinois in a new factory and were a delight for the money, which was the same as a battered old used 944 or aforementioned quattro.

      I owned at the same time, a bought from new 1987 Audi 80 Quattro purchased in 1988, last of the square ones. So I know whereof I speak. It was nice to be minorly wealthy for a few years; I used the Audi as a winter beater.

  4. Daniel, your opening paragraph took me right back to my early childhood and a Dinky Toys Hudson Commodore that introduced me to a sort of car which rarely, if ever, appeared on British roads. But as I learned more about the strange and garish exotica that was the norm on the other side of the pond, the more I was drawn to the odd and the quirky, such as Nash or Studebaker, rather than the main-stream from General Motors, Chrysler Corporation or Ford. Kaiser Manhatten, anybody?

    1. Hi JTC. Kaiser Manhattan? Never heard of it, but here it is:

      Wow! That’s just mad, but in a good way. Here’s the rather natty ‘Traveller’ liftback version:

  5. Fuel crisis notwithstanding bet Renault regretted not continuing development of the PRV V8 engine upon becoming involved with AMC, otherwise would have been interesting to see what Renault planned for AMC from the late-1980s and into the 1990s had they not offloaded it to Chrysler.

    Know there was originally some talk about Americanized versions of the Escape and Alpine GTA/A610, yet would Renault have spawned US versions of the 19 / Megane, Laguna and Safrane?

    There was also the intriguing entry-level 1990 Jeep JJ project, which seem to recall was to be powered largely by Renault engines including a 1.9 diesel as was later used in the Santana Samurai.

    https://www.allpar.com/model/jeep/jj.html
    French link
    http://renaultconcepts.online.fr/alpine/vva/vva.htm

    1. There is more on the links between AMC (plus precursors) and Renault.

      The Eagle/Renault Allure
      https://www.losangemagazine.com/7173/renault-allure

      Kaiser Jeep and Renault Model H Concept 1965 with the Renault 16 serving as the technical basis (French)
      http://www.cherokee-fr.com/~jeepfamily/AmeriqueNord/USA/ModelHConcept1965/ModelHConcept1965.htm

      Renault Jeepsy, Berex prototype (French)
      http://www.cherokee-fr.com/~jeepfamily/Europe/France/Renault/RenaultJeepsy/RenaultJeepsy.htm

      Looking back AMC/Jeep could have potentially benefited from further collaboration with Renault, which was at the time collaborating with Peugeot on a number of joint projects at the time (with Volvo soon getting involved with the PRV Project).

      Otherwise curious to know how the constituent parts of what became AMC/Jeep could have made better decisions with the benefit of hindsight, along with if a stronger AMC/Jeep would be in a position to consolidate the remaining minnow US automotive related companies from Crosley, Checker Motors, International Harvester, Continental Motors Company and Polaris Industries?

      Would AMC have fared better had George Mason lived another 10 years or so prior to being succeeded by Roy Chapin Jr?

  6. Once again, DTW conjures up yet another unknown side to the car world for me. Renault’s in America, still born JJ Jeeps, a Kaiser Manhattan and Billancourt bloodshed ; it could either be a script for a Hollywood movie or a modern take on a Shakespeare play (though unsure exactly which one) so thanks to the author and responders.

    It’s been a odd day (when aren’t they…?) but on first glance of the headline picture Premier I saw an Austin Montego. And for the Eagle Medallion Wagon, a Citroen XM. I think I’m in need of a drink, garçon!

    1. I saw a Honda Accord for the ‘88 Premier – it’s a typical ‘pose’ and vehicle colour for the Honda; the ‘91 Premier has shades of an Audi 100, to me.

      Did the Kaiser invent the Hofmeister kink?

    2. Hi Andrew and Charles. There’s certainly something Audi-esque about the Premier. I think it’s the extreme FWD stance: a short wheelbase and long front overhang. As for the Medallion Wagon, Andrew, it was pretty much identical to the Renault 21 Savanna (estate) but I wouldn’t blame you for never noticing it, hence your XM confusion. Here’s the Renault:

  7. The first thing recognizable looking at the picture of the Premier are the doors of the Renault 25 – obviously kept identical for cost reasons.

  8. “I think it’s the extreme FWD stance: a short wheelbase and long front overhang”

    I have stored -for sentimental reasons- in my garage the Renault 25 my dad bought in 1985.

    Near to it I park my 2004 Avensis II.

    It is incredible how 2 cars so similar in some aspects (same lenght to the inch, 5 doors, 2 liters) can be so dissimilar in other aspects: The Renault 25 has a longitudinal engine (!?)…hanged in front of the front wheels! (!?)

    In 1985 it seemed “normal” because we had no other references.

    In 2020 the Renault 25 layout looks very weird (it is part of the fun of preserving old cars, the older the weirder) because half of the volume of the engine bay is empty…you can actually see the road at the bottom of the almost empty engine bay. The Avensis engine bay (transversal engine, of course) is smaller and it is much more cluttered.

    The old Renault 25 served us well. It was a good car.

    1. There’s surprisingly little coverage of the R25 in DTW. Nice cars, as you say – plush, in a uniquely French way. Do you think yours will run, again?

      Mention of the R25 gives an excuse to post a link to what may be the most 1980s advert ever made. The woman’s voice sounds very odd / forced, though.

    2. Hi Charles. Gosh, I remember that advertisement like it was yesterday! Very clever script, and so archtypically 1980’s. What really dates it is the fact that he made the life-changing decision without ever discussing it with her!

    3. That ad didn´t do Renault any good. It´s very poorly conceived. I think even allowing for a degree of change in society´s values, it´s preposterous on every level. Hugh Laurie and Stephen Fry lampooned it on Friday Night Live on Channel 4. Great advertising identifies something true and does so creatively. This one doesn´t and puts the car in the background to a risible story. A shame for a fine vehicle.

  9. The Jeep Cherokee had a very unusual unit body. Look underneath one and its basically a ladder frame welded to a floorpan. AMC knew how to make unit bodies, they hadn’t made anything else since 1957, and hardly needed Renault to design the Cherokee body. Plus Roy Lunn was AMC’s chief engineer, and a bit of an ex-pat English genius, fully justifying for AMC that old LJKS adage: an engineer is a bloke who can do for five bob what any damn fool can do for a quid. or words very like it.

    The Renault Alliance and Encore were duds in the marketplace, down there in public opinion with Hyundai, which sold more. In the ’80s, buying Car of the Year chops from Motor Trend or getting a top 10 rating from Car and Driver was a question of payola or some “understanding”. In the real world, the 9 and 11 weren’t really up to the Chrysler K-Car in terms of ruggedness, and their life on the market was brief with low sales. Wouldn’t have touched one with a ten foot bargepole, but had a grudging respect for K-Car longevity.

    As for the Renault 25 and its gift of the platform as the basis of the Eagle Premier, well done. It lived on for years, and was a decent car once Chrysler dumped the awful PRV V6 and put a succession of nice burbling Chrysler V6s in it.

    Which reminds me, there was a third Eagle. Apologies to Mr Herriott. It was the Eagle Vision, sister car to the Dodge Intrepid and the direct re-engineering of the Premier with all Chrysler mechanicals. There was a Chrysler Concorde version as well. All three sold very well indeed and were a good part of the reason, along with the Jeep Grand Cherokee upmarket remake of the XJ Cherokee in 1992 that gave Chrysler high profits which led to the next starry-eyed European company to come to North America sure it could show Detroit a thing or two – Daimler. It bought Chrysler and then proceeded to really make a complete hash of things. Different market, different customer expectations.

    BTW, as I’v mentioned here before, the AMC Eagle which predated the Audi quattro by two years had a more advanced AWD system. Credit goes to Mr Lunn once again, and the New Process Gear division of Chrysler Corporation, who were in the business of making 4×4 transmissions for the Big Three’s pickup trucks.

    1. A fourth Eagle was the Summit, a rebadge of Mitsubishi’s Mirage. In addition to the 4 door sedan, it was also available as a compact MPV with two doors in the front, a big hatch in the back and a siding door on one side in between.

    2. Ah, Roy C Lunn. The ex-Jowett engineer Gerald Palmer could have been…

  10. I bought one of the last R-25-based AMC/Chrysler cars made, a 1992 Dodge Monaco with the usual mid-tier options (power driver’s seat, climate control, but no sunroof) for $12,999 in the fall of 1991. People did mistake it for a Audi and the interior had a much more substantial feel that that of most USA-made cars of that time. Nothing in that car looked or felt like discount-store furniture, recycled milk bottles or cheap doormats. It was reasonably reliable for 140,000 miles but made unseemly engine noises and had no overdrive gear when I finally got rid of it. All in all, I’d say the car was a bargain, and I’m sure Chrysler learned a lot from its experience with it.

    1. Hi PCL. Welcome to DTW and thanks for sharing your user experience of the Monaco. It sounds like a decent car, but probably ended up as something of an orphan after Renault abandoned the US venture. Bob Lutz certainly had no time for the Renault-based designs he inherited.

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