Gamble on the Rambler

As boss of the biggest independant automaker, American Motors' President George Romney believes that that only way to compete with the Big Three is to make a car that they do not have. That car: the Rambler. Due in Nash and Hudson dealers' showrooms this week is the completely redesigned 1956 Rambler, with lower body lines, a 108-in. wheelbase (v. about 115 in. for Ford and Chevvy), and a bigger engine (120 h.p. v. 90 h.p. last year) that will still get as much as 30 miles a gallon. Tok make the Rambler distinctive, as well as stronger, American added a wrap-around roof girdle over the rear window.

On the Rambler, Romney is virtually staking the future of American Motors. He has already put $21 million into retooling for the '56 models (64% of the years' budget for improving company products), therby boosted production capacity 60% to 800 cars daily. In '56, three-fifths of all the cars American rolls off the assembly lines will be Ramblers.

The Challenger. Back of the gamble is Romney's conviction that the trend is toward a smaller car--especially for a second car. His competitors agree that cars may not get bigger, but do think that a smaller car will go over. Romney stands unshaken. He has crusaded against the "big, gas-guzzling dinosaurs," even though he admits: "We make them too." In fact, Hudson production for 1955 rose 30% to an estimated 24,700, and Nash 46% to about 43,300. But the big seller is the Rambler. Sales jumped 161% to 87,600 cars. One good sign that it is fast catching on is its average resale price, which topped the other low-priced cars all last spring and summer. Next year Romney hopes to boost Rambler sales to 150,000, its share of the market from this year's estimated 1.2% to about 2.2%.

But for the independents, competition from the Big Three is rough; and when American reported this week on its first full fiscal year since the Nash-Hudson merger, the balance sheet showed it. In the year ending Sept. 30, American lost $6,956,425. Stockholders found some cheer in the fact that it was only about half the 1954 losses (and it was well below Studebaker-Packard's $19,301,513 loss for 1955's first nine months). And 88% of American's 1955 losses came in the first six months, before savings made from the consolidation of Nash and Hudson.

Fruits of Merger. To cut production costs, American moved Hudson assembly lines out of Detroit, consolidated all finished-car assembly at Kenosha Wis It adopted the Big Three's practice of using the same body shells for several lines of cars, consolidated Hudson and Nash field operations and warehousing.

One of the company's big expenses is buying V-8 engines from Packard for Hudson Hornets and Nash Ambassadors. Early next year American will put into production its own $10 million, V-8 engine plant further cut costs.

The rest of American was doing well.

ReDisCo, the wholly-owned finance company with an annual volume of more than $100 million, was thriving, and the Kel-vinator and Leonard appliance lines were booming. Says Romney: "Our appliance business is up 30% this year." For the entire company, he is hopeful about the future. Though he expects to lose money m 1956's first fiscal quarter, he expects to go in the black in the second, stay there and show a profit for the year.

This file is automatically generated by a robot program, so reader's discretion is required.