Did the Pacer kill AMC?

In response to the posting of Matt Crawford's "Why a Pacer?" essay to the AMC mailing list in mid-February 2003, there was a flurry of discussion about the role of the Pacer in AMC's decline. Because this discussion focuses mainly on business aspects, some interesting background information can also be found in this Business Week article from 1975.

From Eddie Stakes:

You forgot the Pacer WAS AMERICA'S FIRST CAB FORWARD DESIGNED CAR, well before that phrase was introduced. Many vehicles have used 'Pacer Design Lines' from the current Mercedes ES Series to Porsche, [the designer of which] Dick Teague was a personal friend of, and they admitted they used to copy each other. Look at the back end of a 924 and the butt of a Pacer. This is a historical fact, not made up -- they were good friends going back to when Teague worked for GM.

Several noted antique collectors and auctioneers have placed the PACER in 'their top ten collectibles' lists for a variety of reasons, most notably it was so ahead of its time, and many automakers in the 1990s copied many of its lines and still do today! There are only two vehicles AMC made that can be picked out by the masses: Gremlin from 1970-78 and Pacer from 1975-80. Some car companies even COPIED THE PACER'S SLOGAN, like Pontiac's "Wider Is Better" campaign a few years ago. Honda would later copy AMC's slogan from the early '60s of "built for the human race" and currently Subaru uses AMC Eagle's slogan from the 1980 model year of "the beauty of four wheel drive" although they changed the 'four' to 'all' in a lame attempt to cover up that they could not come up with something original themselves.

On Jeni's Pacer Page, there is a page-sized article from Car Craft showing why the whole world auto-wise is related to the Pacer. [See "AMC Pacer: Center of the Known Automotive Universe".] If you want something to carry around or to e-mail the ignorant masses, print off a few [copies] of that and it shuts up those who are ignorant beyond a Chevy 350 and Ford 5.0.

Take care,
Eddie Stakes
Planet Houston AMX

From Les Mavor:

I've seen some interesting pieces about the ground-breaking Pacer in recent discussion. Well, here's another sidewalk observer's view. It was the car that killed the company. As was said, you either liked it or hated it. AMC had some very good years in the early 70s, and I remember my local dealer, who was a personal friend, had some excellent years. The Pacer was supposed to be the commuter car of the future, especially with its ground-breaking Wankel technology.

When it first arrived at the store, and I took the first arrival out for a spin, I felt like I was riding in a moving green-house. I had had VWs, so was used to not having anything visible in front of me, but this thing felt like I was naked in the middle of traffic! I encouraged some of my friends and acquaintances in to see and drive the car, and got the same reaction. My mother-in-law, looking to replace her 1968 American 330, which had 32,000 miles on it and was "old", stated outright that she was very uncomfortable in the Pacer, and felt like she had no protection; we know that that was only an illusion. She also complained about the heavy passenger door, which was elongated to facilitate rear-seat access. She bought a Plymouth Plain-Jane 4-door.

The declining sales for the company, eventual take-over by Renault, and cancelation of the Pacer were black (read "red ink") years for the company. AMC blew the profits that they had built up from the success of the Hornet and Gremlin to bring out this "radical" machine, and, I believe, in scrapping the Ambassador and Javelin (supposedly to beat mileage requirements), killed their image. My brother bought the last 1974 Ambassador sold by my dealer, and used it to pull his trailer for years. He was the only owner. It went to the bone-yard from his driveway. He still peaks longingly of having it today. The Pacer was a sauna without A/C, and it should have been standard. I remember, in the early 70s, seeing a photo of another "radical" design prototype that AMC was working on, and the accompanying article even speculated on whether it was the prototype for the Pacer. It was a minivan. I guess that Lee Iacocca must have picked up a paper the same day.

If the Pacer had been scrapped when AMC lost access to the Wankel, they'd probably still be in business to-day. There. I've said it. Now I'll run and hide.

Les Mavor
(in hiding from the three Pacer-Lovers)

From Frank Swygert:

You're not the first to make this observation -- neither am I. The Pacer did drain AMC of precious resources. The problem was AMC had already spent lots of development money on the Pacer by the time GM dropped the Wankel project (rather suddenly, after spending in excess of $1 billion on development). If they had dropped the project altogether, there would be no new product from AMC for quite a while, and all the money spent would have been a total waste. So they adapted it to use the six instead, salvaging what they could. It would have got no better mileage or been better powered with GM's Wankel design, it would have just had a little more room under the hood and in the front passenger compartment and weighed maybe 200 pounds (possibly as much as 300 lbs.) less. That's one reason GM dropped the Wankel -- no more efficient (except package size) than existing IC engines. The Matador Coupe was the other culprit that killed AMC -- it shared few components with any other AMC except for suspension and drivetrain -- a completely different body that was costly and ended up being a waste of limited resources.

I have stated before that the car was originally to be front wheel drive, but research has proven that to be false. With that knowledge, it may not have been widened for the driveshaft, just the hump made larger (to move the transmission back). The mistaken idea that it was intended for FWD came from early '70s auto magazines. GM was working on FWD and RWD packages, the journalist assumed AMC would be using FWD and reported it as such. Development drawings from Richard Teague's design staff prove that FWD was never considered (see Wolfgang Merderle's page).

From Thomas M. Benvie:

Here we go again with "the Pacer killed AMC". Here are some stats for you:

Total cars made by AMC:

1959-374,240
1960-458,841
1961-377,902
1962-442,346
1963-464,126
1964-393,859
1965-391,366
1966-279,255
1967-223,010
1968-255,070
1969-246,462
1970-228,460
1971-221,150
1972-253,709
1973-318,866

1974-427,124 (This was an extended year production. Usually they stopped in July, but they stopped this year in October, mainly to make more cars without having to comply with sweeping 1975 new car government regs [and also (instead?) due to an auto workers' strike).
1975-273,712 (72,158 Pacer)
1976-283,255 (177,224 Pacer)
1977-213,125 (58,264 Pacer)
1978-175,204 (21,231 Pacer)
1979-165,782 (10,215 Pacer)
1980-199,613 (1,746 Pacer - The plug was already pulled, so this is misleading. The Spirit, Concord, Eagle, and SX/4 all shared so many parts that it was not worth keeping a separate assembly line for just Pacer. Plus, the style had run it's course, and Renault was here).

1981-137,125
1982-101,915
1983-26,521
1984-25,535
1985-16,190
1986-8217
1987-5468
1988-2306

Altogether, AMC sold 280,838 Pacers with very few design changes, and those that were changes were not that much money -- some simple stampings, grill, interior. No big deal.

And look -- pretty regular production each year until 1978-but these do not include Jeep sales, which were increasing.

So why did AMC suffer such a big loss in '75, the first year of the Pacer? It had nothing to do with the Pacer, especially when you look at the next year and find more than half of the AMCs sold were Pacers. It was pure and simple -- the gas crisis. The war in Vietnam ended in April of that year, but there was also the scares in the mid east. The 5-6 hours to wait in line for gas was enough to push Americans to the other side -- foreign. The cars from Japan started to sneak in in the late '60s early '70s, but by the mid '70s they were firmly entrenched, as well as some Europeans, mainly VW. (When the Rabbit Diesel was introduced there was a 6-month waiting list due to the 50 mpg it offered. That's all it took -- 50 mpg advertised). The mid-late '70s were tough on automakers. Ford dealers were closing left and right. Chrysler was near government bailout. GM was near the "corporate engine" and diesel engine fiascos. In 1982 I was looking for a new car for my wife. Got a great deal on a Sprit D/L from a dealer I used to work for. In 1985 I was looking for a new car for me. An Eagle with a sticker of $15K plus??? I don't think so -- bought a new Cougar instead -- $12K loaded. If anything, the Pacer SAVED AMC for a few years -- look at the totals -- the total amount of Pacers built equaled almost one-year's-worth of production in AMC's better times.

This Wankel stuff is also not entirely true. Yes, GM spent billions, but mainly on trying to perfect the apex seals, which lasted only 50k miles-not good enough for GM or AMC. (But, okay for Mazda). Plus new emissions standards (do some research on what these standards did to the Cosworth Vega!). The car was never going to be front wheel drive -- where would AMC outsource these components? The car was not widened due to no Wankel -- it was wide by design. And do you really think frugal AMC was going to build a car that offered ONLY the wankel and not an optional 6, a tried and true 6, one of the best in the business 6?

So why so few AMCs at the end? Simple, it was called Renault. Originally, this was to be a partnership of a dealer network. America was clamoring for new cars with great mileage. The Renault had two of the top selling cars in the whole world. Made sense Americans would want these thrifty cars. So a "marriage" was born. And how many cars were sold? Let's just look at 2 years (Mainly because I do not want to look up more Renault stuff).

1983
Alliance-110,173
Encore-82,023
Total-192,196

1984
Alliance-153,877
Encore-42,433
Total-196,310

Yes, like it or not, AMC was involved in these cars. Like it or not, they spent money designing these cars. Like it or not, they wore an AMC badge on them -- even won car of the year from Motor Trend (1984 maybe? Even had a special black Motor Trend Car of the Year Edition).

And one more thing -- Jeep. They were really starting to take off. Yes, less cars, but more Jeeps, especially the new image of the Wagoneer -- a body style with military roots to the '60s, and all of a sudden competed with Cadillac!!! The CJ, tried and true body from whenever. A new Jeep Scrambler -- just a stretched CJ (actually was called a CJ-a CJ8). Comanche was coming, plus the full size Wagoneer based truck. AMC was making tons of money with the non face lift of these vehicles.

So, yeah, the tried and true "AMC only" cars were dwindling then gone, but AMC badged cars were not -- we just don't like this idea. So what "really" happened to AMC? The Renault lost favor with the public, partly due to poor advertising. The design didn't "catch on" as hoped with the Alliance and Encore -- people bought them for the gas mileage, but they quickly depreciated. People leasing the cars began to see the value of the car way below the lease payment. Brand loyalty disappeared (though it seems to be back). They were "throw away" cars, as were many others. And, most importantly, Chrysler saw a good thing, and bought them. And just like GM eliminated Oldsmobile, Chrysler eliminated Plymouth, AMC, Imperial (as a separate line), DeSoto, etc. Why did they need this model? They wanted Jeep, they got it, that's business.

AMC couldn't compete on a good day - at least not since 1966. And to put this in perspective, the best selling car year after year in the '80s was the Chevette -- at almost 500,000 (half a million) cars made -- just Chevettes! That's more of one model than AMC made total in their best year!

So please, the Pacer, Matador, Marlin, AMX did not kill AMC. Gas prices, union rates, foreign competition, lack of brand loyalty, etc. did not allow AMC to beat the "big 3", so they were "bought out" to be "a marriage of equals" to the public that soon realized this was not to be.

Some day I'll pull out my annual reports and do a year by year analysis of the black and red of the financial statements. AMC was still making money in the '80s. Let's not let opinion and urban legend jade the facts. Just as we hate people talking about our Ford 390 or Chevy 327, I cringe when I hear "AMC made it this way. They would do anything to sell a car" or "Blank killed AMC" or "This is what really happened...."

Anyone want to buy an 8-track? They would still be around if only someone came up with a better way...

One last thing -- Pontiac was "wide track" in the '60s, before AMC. Audi had 4 wheel drive before AMC, as did many other companies -- some back to the infancy of the industry. The first "cab forward"? Look at some of the cars of the '50s and '60s, mainly prototypes or small production -- can't get any more "cab forward" than a BMW Isetta I think.

I could go on...

From Frank Swygert (again):

The stats are misleading. The Pacer/Matador Coupe alone didn't kill AMC -- a string of mistakes (if only we could avoid doing things that seem right at the time but prove disastrous later!) and the general market at the time [did]. AMC lost lots of money on the Pacer. It cost so much to develop the thing in the first place -- that's the problem. It would have to be a high volume car to even pay for the tooling -- something it never did. In hindsight, AMC could have better-used the money. At the time, they needed new product because everything else was getting a little long in the tooth design-wise, and they needed something that would not only get them noticed, but take them into the next century. Pacer was designed to be state of the art and well advanced -- and it was in some ways. But after the novelty wore off (after the second year), everyone realized that other than the funky (at the time) looks, it was just like any other car. No better mileage (worse than some), a little lacking in power, no real reason to buy except to be different. Not enough.

I realize the mistake I'd made in believing some of the mistaken assumptions made by the automotive press and some people in the hobby. That's what started this particular thread -- correcting this. But I did research the Pacer extensively about a year ago for an article. While it was never widened to accept the six nor front wheel drive -- popular misconceptions -- it was never designed to accept a six from the start either. Check Wolfgang Merderle's site. You will find an article from a car design magazine with quotes on the Pacer design from AMC and Richard Teague himself. No six, no FWD.

I believe you about the apex seals, I know they were problematic. But I have articles with press releases from GM stating the emissions problems were their main concern.

Everything about the Pacer and Mat Coupe "killing" AMC is mostly speculation, but based on fact. The only problem is, what if they didn't make those two cars? Where would they have spent the money? On something worse, more financially disastrous? It's very possible. From what I can gather from research, the mood at AMC was that they needed new, attention-catching product. They did that -- what more could they do with the Matador sedan designs based on the '67 body (8 years old in '75), which in itself was just a slightly larger '63 body? At least the small cars were just five years old, but even that was starting to get a little long in the mid-seventies, where 3-4 years design changes were the norm. The little cars were due for a major facelift, big cars needed replacing. They had to do something, so they went revolutionary and it failed.

My thinking is it wouldn't have been so bad if they hadn't done the Mat Coupe AND the Pacer both within a year of each other. The money would have been better spent on a good four cylinder engine and a more conventional replacement for the Matador than the Pacer. But who knows -- maybe if they had dropped the Matador and introduced a four door Pacer sedan and wagon, it would have sold better (since that was the only "big" car from AMC) and lasted longer. But we can play "what if" games all day. The fact is both of those cars cost a LOT of money to develop and to build, since few components were shared with other vehicles. The financial drain caused by the relatively low sales of both was to much for AMC. Neither ever paid for itself in return of tooling and manufacturing cost over the long run.

A lot of this is opinion, agreed, and I respect the fact that Tom disagrees -- that's his right. But my opinion is based on facts that anyone can find and I can show, so therefore valid. His opinion is based on facts, mainly on statistics (or that's what he stated, I know there is more Tom!), and is also valid. I just disagree. Is that not allowable? We have differing opinions based on similar facts... interpreted different ways. No hard feelings on my part, hopefully not on anyone else's either. Things like this aren't set in stone, will always be opinion -- based on fact and not!

From Keleigh Hardie:

According to Audi's official history book, "A History of Progress", as well as their internal company training books (I work for Audi) the first Quattro went on the market in 1981. Before that, they only made prototypes and one-off racers. AMC beat them to the first mass produced full-time four wheel drive car (the Eagle, of course) by two years (m.y 1980, introduced in 79). Subaru had a part-timer in 74. Depends on what you mean by "had", I guess.

From Alfred T. Koos:

I don't think 'full-time' 4wd was the qualifier. It really wasn't considered such a big deal that the '80 Eagle was 'full-time 4wd', and of course EPA pressure to lower CAFE led to all Eagles going 'part-time' the very next year. The Eagle was the first American 4-wheel-drive automobile of the modern age, NOT the first 4-wheel-drive automobile NOR the first 4-wheel-drive automobile of the modern age...Subaru has that claim.

Which is not to demean the Eagle in any way. The Eagle paved the way for 'AWD' offerings from all the manufacturers (anybody remember the Ford Tempo AWDs?) which ultimately led to the public acceptance of SUVs. Of course, the new Jeep XJ did a lot more to that end than the Eagle, but AMC still pioneered a marketing niche (once again, far too early) that would later become immensely popular. The Audi Quattro, Eagle Talon, and numerous later vehicles (including the AWD Caravan I'm currently driving) were manifestations of that niche. But as we all know, AWD never really caught on in cars and is now well entrenched in the realm of SUVs (and high-performance exotica).

Subaru, for their part, clouded this issue with their misleading Subaru Outback ads a few years ago. The Outback was NOT the 'World's First Sport Utility Wagon'...but the world's first sport utility wagon was indeed a Subaru. So you could accurately say that the Outback was 'from the makers of the world's first sport utility wagon'.

As for 'cab forward' design, this was less a conscious effort on the part of the designers as it was a description of the results of the latest thinking in automotive design... ride and interior space would be maximized by pushing the wheels out as far as possible to maximize the wheelbase while minimizing overall length. Put a big interior on the longest possible wheelbase with the shortest possible front and rear decks and overhangs and you will get a 'cab-forward' design. Shortening the hood has everything to do with this concept.

That being said, an integral part of this design is burying some of the engine/transaxle underneath the cowl, especially with today's radically canted windshields. This is another necessity of the design, but this DEFINITELY was fundamental to the Pacer design. Yes, there were other manufacturers that had their 'cabs forward' (like the Isetta example) but those were not as applicable to modern front-engine, maximized interior space, radically canted windshield and engine-under-the-cowl designs. The Pacer had all of those things (although it did not have the maximized wheelbase, per se).

At the Kenosha show, a former AMC designer by the name of Konopka was selling some of the studio portraits and photographs. One of Teague's mid-'70s vintage drawings (which I photographed) was of a four-door Pacer sedan concept. The entire front was a Pacer, but the entire rear end resembled any current Taurus/Continental/Town Car body in overall dimensions and appearance (in silouette). To my eyes, this painting most dramatically illustrates the advanced design of the Pacer in that it removes the 'bubble car' idiosyncracies and replaces them with modern-day sedan dimensions. Yes, the design works very well...no, it wouldn't have sold in the '70s...much too advanced.

So the Pacer is not as much the 'car that killed AMC' as it is AMC's Chrysler Airflow. To advanced (by design or accident) for it's own good.

P.S. AMC would still be around if it had given up on passenger cars in 1975 and concentrated on developing trucks. There would have been some tough years (especially '80-83), but a spending all of it's limited design resources on a redesign of the full-size Wagoneer and earlier introduction of the XJ would have carried it through 1990, when things would have really taken off. But then again, it wouldn't be 'AMC' then, would it?

Alfred Koos
Alamo AMC
San Antonio, TX

Frank Swygert replied to some of Alfred's points (which are in fixed-width font):

That being said, an integral part of this design is burying some of the engine/transaxle underneath the cowl, especially with today's radically canted windshields. This is another necessity of the design, but this DEFINITELY was fundamental to the Pacer design.

But the Pacer wasn't originally design with the engine buried! The Wankel engine was much shorter than the AMC six. Burying the engine in the cowl was necessary so that the overall proportions weren't destroyed. A longer nose would really make a Pacer look strange! So that "feature" was more out of necessity than design.

At the Kenosha show, a former AMC designer by the name of Konopka was selling some of the studio portraits and photographs. One of Teague's mid-'70s vintage drawings (which I photographed) was of a four-door Pacer sedan concept. The entire front was a Pacer, but the entire rear end resembled any current Taurus/Continental/Town Car body in overall dimensions and appearance (in silouette). To my eyes, this painting most dramatically illustrates the advanced design of the Pacer in that it removes the 'bubble car' idiosyncracies and replaces them with modern-day sedan dimensions. Yes, the design works very well...no, it wouldn't have sold in the '70s...much too advanced. So the Pacer is not as much the 'car that killed AMC' as it is AMC's Chrysler Airflow. To advanced (by design or accident) for it's own good.

Good points. I doubt the Pacer based four door sedan would have been to bad as far as sales. By sharing components it would have been more cost effective, and made the whole Pacer line cheaper in the long run (via dilution). But the Matador was still selling in reasonable numbers. Not enough to justify a platform change, but the platform it was built on had long since been paid for, lots of profit on each one. With the Matador out of the picture and the Pacer the basis for the big sedan, things probably would have been no worse. With more of them out there, and AMC voting their own confidence in the design, they should have become more acceptable to the public. But that's just speculation.

P.S. AMC would still be around if it had given up on passenger cars in 1975 and concentrated on developing trucks. There would have been some tough years (especially '80-83), but a spending all of it's limited design resources on a redesign of the full-size Wagoneer and earlier introduction of the XJ would have carried it through 1990, when things would have really taken off. But then again, it wouldn't be 'AMC' then, would it?

But if they had dropped all the big cars and concentrated on the Gremlin/Hornet, they may have got to Spirit/Concord a couple years sooner, and with a real AMC four instead of the little 2.0L. XJ would have come in a year or two sooner, and Renault wouldn't have more than 25% ownership. I'm working off memory here, but I think 25-26% was the max they were originally supposed to have over the first few years. The Alliance was good for AMC, and if they would have had more influence, it could have been better... Worst thing about the Alliance was the little 1.4L. Took AMC execs two or three years to get Renault to offer a 1.7L! It should have had the 1.7L stock and a 2.0L (ala GTA) as an option from the start, then the 1.4L could have been in an "economy" model or option. As it was, AMC had limited influence on Alliance modifications for the US market. AMC would have got the Premier a year or two sooner, and would have had more influence on it as well. Jeep almost killed AMC in 1980-83, that's the main reason Renault got the chance to buy controlling interest in the first place. AMC had to survive until the XJ came out. If the money for Pacer and Mat Coupe had been applied elsewhere... that's the whole point!

As I said earlier, we're all entitled to opinion, and that's all most of this hindsight and these "what if" scenarios are. So I'm not saying anyone (including myself!) is right or wrong, I'm just offering a different opinion! I enjoy hearing other opinions as well.