A Real Survivor, Hardy Jeep Was Lure for Chrysler
The Americans rescued the French in World War II and the French rescued American Motors Corp. in 1978, and the Jeep played a role in both. Now the venerable Jeep is being called on again to bolster sales at Chrysler, which was rescued by the Americans in 1979.
The Jeep subsidiary of AMC, thought to be the only profit center for the smallest U.S.-based auto maker, is regarded by some as the principal reason that Chrysler proposes to buy the company.
One of the few old American industrial names whose image hasn’t been sullied by competition from overseas, Jeep thrived during the 1970s and has thrived in the 1980s as the pricey so-called utility vehicle became a trendy substitute for the conventional passenger car.
“Jeep still has a very, very strong image,” said Chris Cedergren, an analyst at J. D. Power & Associates, an automotive consulting firm in Westlake Village.
Jeep’s corporate lineage dates to the 1903 Overland Runabout. Successor vehicles were built by Willys-Overland Co., which established itself in 1910 in Toledo, Ohio--still home base for the Jeep--and which was for a brief period the nation’s second-largest auto firm.
But the vehicle that made Jeep an almost generic term for four-wheel-drive machines was the quarter-ton truck Willys designed for the Army in 1940. More than 585,000 were built during World War II, and employment at the Toledo plant soared to 15,000. After the war, Jeeps were built for a time at Willys’ Los Angeles plant.
The name “Jeep” originated not with a consulting firm but with American soldiers, who hung the moniker on the vehicles during the war. They apparently took it from a comic-strip character of the 1930s named Eugene the Jeep, a creature said to have extraordinary powers.
AMC’s connection with the Jeep dates only to 1970, when AMC Chairman Roy D. Chapin Jr. overcame naysayers within the company and pushed through the acquisition of Jeep Corp. from Kaiser Corp. for $70 million.
Recycling ancient designs for the so-called CJ (civilian Jeep) militarylike vehicle and for the larger, wagonlike utility vehicles called Cherokee and Wagoneer, AMC all but built the highly profitable market for plushly equipped four-wheel-drive vehicles, which are categorized as trucks by the auto industry.
The Jeep prospered even as AMC’s car lines foundered during the 1970s. It became fashionable for auto industry experts to predict the death of American Motors, but it always was assumed that someone would buy Jeep and make money with it.
“The AMC image is terribly weak, but Jeep carries its own cachet,” said a marketing expert at another U.S. auto firm.
After French government-owned Renault bought into AMC in 1978, the Jeep profits literally kept the enterprise afloat while Renault poured money into the U.S. firm to modernize its antiquated plants.
Today, AMC’s redesigned Jeeps are constrained only by plant capacity, analysts said. Despite the recent entry of the Japanese into the market for utility vehicles, Jeep sold a record 207,000 vehicles last year and commanded a higher share of the truck market than it did at the start of the decade.
The newest version of the CJ--the first all-new design since World War II--was introduced last year as the Wrangler and starts at $10,200. The most expensive Jeep, at $23,000, is the 1963-designed Grand Wagoneer. The whole model lineup is described as highly profitable.
The addition of those sales would boost Chrysler’s truck sales by about one-third and give Chrysler its first domestically built, modern, compact utility vehicles in the Cherokee and Wagoneer.
