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It's a Black-Widow Thing: Why Does Every Company that Owns Jeep Die?

Car and Driver logo Car and Driver 12/5/2017 DANIEL PUND

1941 Jeep Willys MA It's a Black-Widow Thing: Why Does Every Company that Owns Jeep Die? - Feature From the December 2017 issue

Jeep has the tendency to send the company that owns it to its death while the brand itself thrives.

Research

Remember the facehugger from the movie Alien? That was awesome, right? Well, we in the auto biz have our own facehugger. Its name is Jeep. Now, Jeep isn’t gross and doesn’t have a proboscis or acidic blood. But Jeep does have the tendency to send the company that owns it—let’s call it a host company—to its death while it thrives. When was the last time you bought a Kaiser?

Willys-Overland (1941–1963)

What we now know as Jeep is born in 1941 at the behest of the federal government. Willys-Overland and Ford Motor Company essentially crib the design from American Bantam. This makes American Bantam both Jeep’s parent and its first victim. The origin of Jeep’s name is up for debate: Some say it’s named after the Popeye comic-strip character Eugene the Jeep; others claim it’s simply the phonetic combination of the letters G and P, the military abbreviation for general purpose. The name doesn’t become official until 1950, when Willys is awarded a trademark for “Jeep.” In 1953, Kaiser-Frazer purchases Willys-Overland for $62.3 million. Willys produces its last passenger car in 1955, but Jeep production continues. In 1963, the Willys name is dropped entirely and the company comes to be known as the Kaiser Jeep International Corporation.

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Kaiser Jeep International Corporation (1963–1970)

In 1970, Kaiser sells to American Motors Corporation and gets out of the auto business entirely. Jeep survives.

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American Motors Corporation (1970–1987)

By 1977, AMC is staggering along after losing $73.8 million over the previous two fiscal years. In 1977, Jeep sells a record 124,843 vehicles in the U.S.

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Renault (1979–1987)

The French company Renault buys into AMC in 1979.

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Chrysler (1987–1998)

Chrysler, under the leadership of Lee Iacocca, buys American Motors for $1.5 billion in 1987. The prize is Jeep, which an analyst at the time estimates to be worth $850 million. A few years earlier, Jeep had introduced its most significant and popular model since the CJ (civilian Jeep): the XJ Cherokee. AMC becomes Jeep-Eagle. Eagle lasts about a decade before being euthanized. Jeep does just dandy. With the introduction of the Grand Cherokee for the 1993 model year, Jeep sales improve by 66 percent within the span of a year. For calendar year 1993, Jeep sales in the U.S. top 400,000 for the first time in the brand’s history.

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DaimlerChrysler (1998–2007)

In a “merger of equals,” Daimler buys Chrysler for $36 billion in 1998. By then, Jeep reliably sells around half a million vehicles per year in the SUV-hungry U.S.

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Cerberus Capital Management (2007–2009)

In 2007, eager to unload Chrysler, Daimler foists it off on a private equity firm that has zero experience running a car company but is named after the three-headed dog who, in Greek mythology, guards the entrance to the underworld. Oddly, this does not go well.

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Fiat Chrysler Automobiles (2009–present)

In a scant two years, Cerberus-controlled Chrysler seeks bankruptcy protection and is rescued by the U.S. government. (Yes, the same government that ordered Jeep’s creation in the first place.) The company emerges from bankruptcy thanks in large part to Fiat. Dodge sales decline, dropping from 594,865 in 2013 to 506,858 in 2016. Chrysler-brand sales slide from 302,995 to 231,972 during the same period. And Jeep? Well, in that time frame, its U.S. sales nearly double to 926,376 (with 1.4 million sold worldwide).

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