How Mitt Romney’s Dad Convinced America to Give Compact Cars a Chance

George Romney was a governor, civic leader, and a presidential candidate—but before all that, he was America’s preeminent pusher of compact cars at AMC.

byJoe LigoJul 26, 2022 10:47 AM
How Mitt Romney’s Dad Convinced America to Give Compact Cars a Chance
Patrick Foster
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You don’t need to be an economics expert to realize that Americans like big cars, right up until a spike in gas prices prompts a reckoning. It’s been that way for decades, with the average size of domestic passenger cars rising and falling inversely with the price of a gallon of regular. And with the national average currently hovering at $4.46 in the midst of an ongoing SUV boom, a familiar refrain can be heard across the land: why can’t we all drive smaller cars?

Back in the 1950s, that was the question American Motors CEO George Romney eagerly sought to answer. Conventional retellings of how America first learned to at least tolerate small cars usually focus on waves of imported VWs and Toyotas coming ashore in the '50s and ‘60s, showing people the value of downsized driving. But before that, there was George and his Rambler, steadfastly dedicated to modest motoring in an age of excess , practically cementing the modern compact car as a legitimate market segment.

As a filmmaker working on a documentary about AMC (more on that later), I’ve spent a decent amount of time studying George Romney’s tenure at the company. The story of his quest to make Americans fall in love with small cars is worth sharing for a couple reasons. First, because I was fortunate enough to sit down with his son, former presidential nominee and current U.S. Senator, Mitt Romney, and discuss his father’s automotive legacy.

The conversation ranged from childhood memories of his father’s work to George’s feelings about the end of AMC, and regardless of whatever you think of his politics, the whole time Senator Romney was incredibly gracious to our film crew.

And two, because even though the current automotive market has people once again considering the wisdom of small cars, it’s different this time. Electric vehicles offer total immunity to gas prices, and with less incentive than ever to make small cars, many automakers are skipping their usual model downsizing and going straight to electric SUVs instead. There’s no one like Romney in the American auto industry, safeguarding the very idea of compact cars at a time where fewer and fewer people seem to care. 

"Everyone's Second Car"

As the United States was coming out of World War II, George Romney was working as head of an industry trade group known as the Automobile Manufacturers Association. In 1948, he was recruited by Nash-Kelvinator president George Mason to join the automaker as Mason's protege, with the intention to lead the company after Mason's retirement.

At the time, 90% of the U.S. car market belonged to Detroit's Big Three: GM, Ford, and Chrysler. The remaining 10% of the pie was split between the smaller “independent” manufacturers, like Studebaker, Hudson, Nash, Willys , Kaiser-Frazer, and Packard. Imported cars totaled less than 1% of national sales, with European sports cars being the best-sellers. VW had just begun U.S. operations in 1949 and sold a whopping two cars their first year.

Patrick Foster

A key factor in Romney accepting the job was a prototype Mason showed him for a new Nash vehicle that was shorter and smaller than typical U.S. cars, while still offering more room than most imports. At the time, nearly all American cars could be considered mid-size or full-size, depending on how you classified them. The average new car wheelbase measured around 115 inches; the new Nash came in at an even 100. Eventually, that prototype became the 1950 Nash Rambler. Romney was impressed and immediately recognized the potential.

Mason wisely predicted that Nash-Kelvinator didn't have the financial strength to compete head on with the Big Three, and saw small cars as a potential market niche where the company could thrive. Within the industry, automakers still assumed that families primarily needed big cars for long-haul travel, but Romney knew from survey research during his time at the AMA that Americans were increasingly using their cars for shorter but more frequent drives. Suburban populations were surging, and thousands of American families needed vehicles to run errands, buy groceries, and make small daily trips that previously could be done in cities without a car. In single-income households where the husband drove to work, a second more-affordable vehicle could be a godsend for a busy stay-at-home mom. 

“His view was that [Nash] should make everybody's second car,” Sen. Romney said. “That if they want to have a fancy Ford or Chevy or whatever, great, but the right car for the second car, in every driveway, should be a Rambler.”

Nash introduced the Rambler in April of 1950, and more small car competition came hot on its heels. Kaiser-Frazer's “Henry J” debuted later that year as a 1951 model. The Willys Aero came to market in 1952, and the Hudson Jet followed in 1953. But unlike its competitors, Nash didn't market the Rambler as a miserly little runabout, but as an upscale small car. If you subscribe to the belief that the majority of Americans see themselves as temporarily embarrassed millionaires, then it naturally follows that nobody wants to be seen driving a “cheap” car, lest the neighbors assume they're actually poor.

The Rambler's $1,800 price tag was significantly more than other small cars and even slightly more than the cheapest Ford, Chevy and Plymouth models, but the Rambler included a slew of standard features that typically cost extra with other brands. AM radio, fresh air ventilation, courtesy lights, and chrome wheel covers may sound unimpressive today, but they went a long way to bolster the little car's image. The Henry J may have cost less, but it didn't even have a trunklid or glove box, let alone a radio. With a Rambler, buyers could get all the gadgets of a well-equipped mid-size car for less money, with better mileage to boot. The little Nash became a big hit, but trouble was on the horizon.

The 1953 Rambler Line (Alden Jewell)

Romney Dreams of Ramblers

George Mason may go down as one of the most prophetic automotive leaders in history. As early as 1946, he had proposed that multiple independent automakers should merge to better compete with the Big Three. Sadly, his advances were rejected until it was almost too late. By 1953, Ford and GM were engaged in an all-out sales war, driving new car prices down to unbelievably low levels and causing sales of independent brands to nosedive. Reeling from the failure of their new small car, the Jet, the Hudson Motor Car company finally accepted Mason's offer to merge with Nash-Kelvinator.

The new company came into being on May 1st, 1954 and would continue to sell both Nash and Hudson products, along with Kevlinator appliances. It would be called American Motors Corporation.

Although Romney had been hired with the assumption he would one day lead the company, the transition came sooner than anyone expected. Less than six months later, George Mason suddenly fell ill and died on October 8th. After a brief debate with AMC's board of directors, George Romney became chairman, president, and CEO of a company going through an arduous corporate merger and losing buckets of money.

“When George Mason died and my dad was made CEO of the company, he had just sold our home in Bloomfield Hills,” Sen. Romney said. “He took the money from the sale of the home, and used it to buy American Motors stock. So he thought enough about himself to do that!”

Joe Ligo

By the end of 1954, the Henry J and Hudson Jet were both dead, and the Willys Aero wasn't far behind. However, Nash managed to produce 36,000 Ramblers that year. Believing there was still room in the market even below the Rambler, Nash had also launched the tiny Metropolitan in 1953, a European-built captive import that gained a loyal following if not the impressive sales of the Rambler.

As the jet-age styling of the ‘50s took off, mainline American cars kept getting longer, lower, wider, and more powerful. Gas was cheap and money was plentiful for large swaths of the population, which was reflected in the cars they bought. Still, the public was gradually warming up to small cars, and even VW managed to sell over 6,300 units to Americans in 1954.

As he took the helm, Romney made clear one key difference between himself and his predecessor, saying in an old interview, “[Mason] visualized the Rambler as a supplemental line to the Nash and Hudson cars, while I had become convinced that Rambler was the car of the future.”

Alden Jewell

Romney began cleaning house and removing any members of management who were not on board with the Rambler. He slashed executive perks and fought desperately to improve efficiency at both AMC's automotive and appliance manufacturing plants. But no amount of cost cutting could remedy the company's sales slump. American Motors' financial picture was simply not improving quickly enough.

“The stock price had gone from I think $30 down to $7,” Sen. Romney said. “It'd come down a lot. The banks were kind of circling around like buzzards, and he was able to convince them to stay with the company.”

The senator explained that his father rarely let work intrude on his family, but as a young boy he would eagerly read the national sales figures published in his dad's copies of Automotive News.

George and Mitt Romney in 1957 (Getty Images)

“...and I remember saying to my dad, we make the best cars, don't we? He said, absolutely. Then, why doesn't everybody agree with us?”

Although the Rambler remained popular, sales of the senior Hudson and Nash cars were down. American Motors couldn't compete with the Big Three's powerful new V8 engines and annual styling changes. But at least they had an all-new Rambler for 1956. It offered much fresher styling than the old “bathtub style” Nash, and a slightly longer 108” wheelbase. It was no longer a truly small car, but it was still dwarfed by most of what Detroit was putting out that decade.

Romney had another force to compete with—imports. Volkswagen alone sold 50,000 vehicles in the U.S. in 1956. There was some overlap in customers, but American Motors and VW approached the small car market with very different products. The Beetle was succeeding where others had failed by providing a bare bones car that almost anyone could afford to own and operate. The Rambler was more expensive, but still offered an economical alternative to Detroit's large cars without sacrificing too much comfort or performance. Ramblers were driven by schoolteachers and traveling preachers; Beetles were driven by broke college students and starving artists.

The Turnaround

With American Motors still swimming in red ink, Romney reinvigorated AMC's advertising efforts, pouring resources into the new medium of television advertising.

“I believe he was one of the very first advertisers on the Wonderful World of Disney,” Sen. Romney recalled during our interview. (The show was actually called Walt Disney’s Disneyland at the time and was later renamed.) “He would do the ads himself. Sitting behind his desk, he would sit there, there was a sculpture of a dinosaur next to him, and he'd say, 'America doesn't need to drive gas guzzling dinosaurs. You need to have these cars that have good mileage, they last a long time, they won't rust because they've got unibody construction that have been dipped in anti-rust coatings.' He was very passionate about the product.”

Alden Jewell

The partnership grew, and eventually American Motors sponsored its own exhibit at the Disneyland theme park in California.

“Disneyland had screens, a big huge room that had screens the whole way around it, it was 360 degree vision of scenes in America,” said Senator Romney, “And you stood in the center with a couple hundred people.”

Known as CirCARrama, the circular theater played footage of famous American landmarks, along with promotional materials for American Motors cars.

George Romney also took to the road personally, speaking at automobile clubs, Rotary meetings, county fairs, and hundreds of other engagements where he could share the gospel of the Rambler. Sometime during this period, he was credited with creating the term “compact car,” as he generally avoided referring to any Rambler products as “small.” Like the word “cheap,” “small” had a negative connotation, but words like “compact,” “economical,” and “efficient” sounded positive. Channeling the same energy from his days a Mormon missionary, he put up persuasive arguments and commanded rooms with his uniquely stilted way of speaking.

George Romney in 1956

“My English professor came to me and said, your father is ruining the English language!” Sen. Romney laughed. 'I said, what do you mean?' [The professor] said, 'Something that's small is com-PACT. Not “COMM-pact.” A “COMM-pact” is what a woman uses to powder her nose. He's out there calling it a “COMM-pact” car, and it's a com-PACT car!'”

Regardless of how he pronounced it, the speeches slowly helped turn the tide. Rambler sales continued to improve, while Hudson and Nash sales entered a death spiral. As AMC readied the 1958 models with only enough capital to redesign one bodyshell, Romney decided to dump everything into the Rambler and axe the entire Hudson and Nash brands (the little Metropolitan soldiered on as an American Motors model). Rambler itself would become a new brand name with a variety of models: the Rambler Six, Rambler Rebel, and Ambassador by Rambler.

Brutal cost cutting continued all the way down to replacing roll-style toilet paper with cheaper folding sheet dispensers in company restrooms. Lavish office Christmas parties gave way to employees simply caroling together, led by Romney's booming voice. Despite the bleakness of it all, he never lost hope.

With the loss of Hudson and Nash models, dealerships desperately needed more products besides the new Ramblers and the tiny Metropolitan. In a decision virtually unimaginable today, AMC management decided to dust off the old tooling from the smaller 1955 Nash Rambler and start building it again—almost completely unchanged! Now known as the Rambler American, it only cost $800,000 for AMC to tweak its appearance and restart production.

Alden Jewell

Romney traveled tens of thousands of miles to give more speeches, still railing against “gas guzzling dinosaurs,” and carrying a handful of tiny ceramic dinos with him for dramatic effect. Nash and American Motors had long marketed their cars to women, and with a growing number of two-car families and women drivers, he often spoke to economically-minded homemakers around the country.

“Ladies, why do you drive such big cars?” he'd say, pulling out a favorite argument. “You don't need a monster to go to the drugstore for a package of hairpins. Think of the gas bills!”

While such examples seem cringeworthy by modern sensibilities, market research showed that the message resonated with female audiences at the time. Metropolitan advertising took it a step farther, marketing the car directly to unmarried “career girls” as affordable transportation.

Despite having cordial relationships with other industry executives, even to the point of being godfather to GM president Bunky Knudsen's daughter, Romney's repeated dinosaur attacks did make him some enemies in the motor city.

“He felt for instance... that General Motors was too big, and it had too big of a market share, and it should be broken up so it would be more competitive,” Senator Romney explained. “That didn't make him real popular in Detroit, as you could imagine. But he expressed those viewpoints openly.”

The public loved it. After an arms race of chrome and horsepower, consumers were finally ready for something different by the end of the 1950s. Fueled in part by a mild recession and soaring inflation, the 1958 Rambler lineup became a smashing success as customers flocked to economy cars. American Motors' car production more than doubled from 1958 to 1959, and even the foreign-built Metropolitan saw a sales increase. After years of bleeding cash, the company finally turned a healthy profit.

Alden Jewell

“George Romney has brought off singlehandedly one of the most remarkable selling jobs in U.S. industry. He has taken a company that only three years ago was on the brink of the grave... and given it a new and vibrant lease on life,” a profile in Time magazine gushed at the time.

Long before Elon Musk or even Lee Iacocca, George Romney had become a celebrity CEO. He wasn't just selling cars; he was selling a mindset, and it resonated with a lot of people. Letters poured in from around the country praising the car, the company, and even Romney himself.

“He somehow believed that the Rambler was the answer to everyone's problems,” Sen. Romney chuckled. “And spoke about the car and company and the people as if it was a great cause.”

Joe Ligo

Compact Competition

Over a decade since he’d looked at the first Nash Rambler prototype together, Romney had turned it into a nameplate that sold 400,000 cars a year. What once seemed like a long shot was now a mainstay of the U.S. auto industry. While Romney didn't invent the idea of a small car, he certainly did a lot to legitimize them in the eyes of the American public. Unfortunately, that came with consequences.

After a few pages of praise, that profile in Time took a more ominous turn, pointing out that imported car sales were expected to reach 560,000 that year. VW alone would sell 120,000 units in the U.S. in '59 and showed no signs of stopping. Fiat and Renault were making inroads, and Toyota had become the first Japanese company to sell cars in the U.S. (ironically, setting up headquarters in an old Rambler dealership.)

Tantalized by American Motors' success, Studebaker launched the compact Lark for '59. More ominously, the Big Three were readying compact(ish) cars of their own. In 1960, the Chevrolet Corvair, Chrysler (later, Plymouth) Valiant, and Ford Falcon hit the streets, too.

“I don't want to give him all the credit for that happening,” Senator Romney said, talking about his dad. “But I think, in the industry generally, his promotion of the compact car and the popularization of it, obviously led to... them following what he was doing. They had to.”

As a result, the market niche that had saved American Motors became a lot more crowded.

Despite the onslaught of new competition, American Motors had a banner year in 1960. Production rose to an unbelievable 458,000 cars. The rising tide of interest in compact cars actually benefited Rambler, and the brand continued to cement its image of building reliable transportation for economically-minded drivers. Following his dad's work, young Mitt loyally tracked sales figures in Automotive News.

Celebrating a million sales in 1960

“We'd get that, and look to see how many cars had been sold by each company, and there were a number of times when Rambler was the number 3 selling car in America,” he said. “It was either Ford or Chevy, and then Rambler. Now of course, the car companies it was competing with had multiple brands, but if Rambler could be up there with those two big brands, that was extraordinary.”

Having righted the ship, management began plans for new models which, sadly, did not include a refreshed Metropolitan. The British-built Met was allowed to sputter out in 1962, while AMC tooled up for all-new Ramblers. Romney oversaw a revolutionary new profit-sharing agreement with the United Auto Workers Union, while another economic downturn depressed car sales across the country. Although American Motors took a big hit, the rest of the industry took a bigger one, and the Rambler brand managed to claw its way up to a distant third for total 1961 sales behind Chevy and Ford. It was the highest the American Motors would ever rank.

Long before I had the chance to interview Senator Romney, I was able to test drive a 1962 Rambler, which still used the basic architecture from the ‘56 model. Although unremarkable in both appearance and performance, the car had a certain honesty to it that really appealed to me. I felt like a sensible, thrifty person driving it, even all these years after it was built.

The End of Romney's AMC

His work at American Motors had given him both wealth and fame, but George Romney began feeling a calling to do more in life. During this time, he developed a keen interest in state politics. Michigan's government had become an outdated, underfunded mess, and Romney helped create two different non-partisan citizen's committees to address the issues. Eventually this led to helping re-write the state's constitution to better meet the needs of its citizens.

Even with its new constitution, the state of Michigan was in financial crisis, and the siren song of politics proved too strong to resist. On February 10th, 1962, George Romney announced his intention to run for governor of Michigan, and took an unpaid leave of absence from American Motors. Although running as a Republican, he criticized both parties for allowing unions to control the left and big business to control the right.

Governor George Romney outside the Michigan Capitol Building in March 1964. Getty Images

This fiercely independent streak drew fire from both sides, but he managed to pull off a win. He was sworn in on January 1st, 1963, officially ending his time in the automotive industry. I asked Senator Romney how the career change from dedicated auto industry executive to politician affected his father.

“I think it had to be hard leaving American Motors, because he had wonderful friends there that had been loyal to him throughout their careers,” he said. “And of course he left at a time when the company faced new competition, and I do remember he wasn't enthusiastic about the course the company took after he left... But he didn't criticize them, certainly not publicly and not even privately, that I could recall.”

Throughout the 1960s, American Motors moved in a very different direction from Romney's original plan. Cars got bigger, fancier, and even dropped the Rambler name entirely as the company moved upmarket. As Romney predicted, compact car sales continued to grow, and no amount of Detroit muscle could push back the swarm of smaller imports. In 1966, Volkswagen, which had already been out-producing AMC on an international level, finally outsold American Motors in its home market. AMC tried to fight back with the Rambler American and later the AMC Gremlin, but the Beetle proved almost unstoppable. By 1977, AMC was reduced to buying fuel-efficient 4 cylinder engines from VW because the company couldn't afford to design and manufacture its own. It was a disappointing reversal of fortune.

Although George Romney never returned to the automotive business, he always remained loyal to American Motors.

“He drove American Motors products until he passed away,” Senator Romney told me. “And when American Motors was purchased by Chrysler, he continued to buy their products.”

It had been an incredible ride. From his uneasy days as George Mason's protege, to the trenches of a sales war, to the cover of Time magazine, Nash-Kelvinator and American Motors had given George Romney the career of a lifetime. And in turn, he not only saved the company but helped revolutionize the industry as well.

Of course, the Romney era is only part of the fascinating history of AMC, which I’ll be exploring in a six-part series on the story of the company for public television. We’ve talked to dozens of former employees, everyone from the C-suite down to the factory floor, and yes, even one sitting U.S. Senator. AMC’s history is a fascinating one, with a lot of lessons that are more applicable than ever to this current moment of upheaval and transition the industry is in. You can watch the trailer for the series and learn how to help support our project, here:

George Romney passed away in 1995, but the indelible mark he left on the automotive world endures.

“He was a man of extraordinary character; he had a strong backbone and knew what he believed.” Senator Romney said with a smile. “People used to say he had “missionary zeal.” He was very very passionate, and I remember he felt that way about American Motors.”

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