Earlier this week, Fiat Chrysler Automobiles (“FCA”), technically a Dutch Company, proposed a marriage with the seriously-French automaker Renault.  Initial investor reaction to the marriage was strong.  If the deal is approved by shareholders and regulators, it would create the world’s third-largest automaker, behind Volkswagen and Toyota, but ahead of General Motors and Ford.  One of the most valuable children in the family would be the Jeep line.  Few great brands have had so many owners and such a tortuous history.

The Jeep story began in June of 1940.  American military leaders foresaw the coming of war, and needed a light, all-terrain reconnaissance vehicle.  In less than a month, they created specifications and sent them to 135 potential manufacturers, requesting bids.  The only hitch was that plans were required in less than a month, by July 22, to be followed by a “finished” prototype within 49 days.  Due to the impossible deadline, only two companies responded, American Bantam and Willys-Overland.

Willys-Overland, built by the ambitious car salesman John North Willys, had in 1915 been America’s second-largest carmaker after Ford.  In the 1920s, it remained among the five or six largest producers.  But the 1930s witnessed the rise of General Motors and Chrysler in the midst of the Great Depression.  Willys-Overland crashed, was reorganized, and barely survived.  Still, they had large factories in Toledo.

American Bantam was a tiny company based in Butler, Pennsylvania.  Only ten days before the tight deadline, they convinced automotive engineer Karl Probst to design the vehicle for them.  He started on a Wednesday and had plans drawn by Friday.

When the military opened the two bids, Willys-Overland’s was incomplete.  They begged for more time.  American Bantam won the initial design contract, and delivered the first prototype on time.

Realizing that they’d need many more of these little vehicles than American Bantam could build, the government also gave Willys-Overland and Ford Motor the rights to produce the Bantam-designed vehicle with Willys motors.

While it is generally thought that the name “Jeep” came from GP for “general purpose” vehicle, there were other possible sources.  Before the war, the Minneapolis-Moline agricultural implement company had called some of their tractors Jeeps, and Popeye cartoons had a character named “Eugene the Jeep.”

In any case, Jeeps in various models became critical to the war effort.  Between November of 1941 and September of 1945, American Bantam built 2,675 Jeeps, Ford built 282,356, and Willys-Overland 362,896, for a total of 647,927.  Only a dreamer would think America would ever again need Jeeps in such enormous quantities.

After the war, only Willys-Overland stayed in the business, providing Jeeps in various forms to the government, businesses, and a few consumers.  In the late 1940s, production was around 100,000 per year and the company was finally profitable, even without the demands of war.

In the interim, the great Oakland-based industrialist Henry J. Kaiser, who had helped build Hoover Dam and provided ships, steel, and aluminum to the war effort, decided to enter the auto industry.  In partnership with experienced auto executive Joseph Frazer, he created Kaiser-Frazer to build cars.  Unsuccessful in competing with General Motors, Ford, and Chrysler, Kaiser-Frazer bought Willys-Overland for $60 million in 1953.  Kaiser’s automotive interests were soon renamed Kaiser Jeep.

Jeep added new models, including the famous Wagoneer, and modified the traditional CJ line.  Nevertheless, by the late 1960s, annual U.S. Jeep sales dropped below 40,000.  Henry Kaiser’s son Edgar finally tired of the auto business.

On the other hand, American Motors’ (AMC) CEO Roy Chapin, Jr., was seeking new opportunities.  Formed in 1954 from the failing independent automakers Hudson and Nash, AMC had briefly prospered in the 1960s under CEO George Romney with its bestselling Rambler line of compact cars.  (Romney went on the become Governor of Michigan and a Presidential hopeful like his son, Mitt.)

Chapin, whose father had run Hudson, had tried to convince his boss Romney to buy Kaiser Jeep, to no avail.  But Chapin thought the brand had an upside, so after he became head of AMC, he re-opened talks with Edgar Kaiser.  In early 1970, AMC bought Kaiser Jeep for $82.5 million in cash and stock.  Kaiser’s company ended up owning 20% of AMC, making it the largest shareholder.

In 1970, AMC made 45,000 Jeeps and 276,000 other cars.  With AMC’s retail expertise and dealer network, Jeep sales boomed.  Only eight years later, in 1978, the company made 153,000 Jeeps and 214,000 other cars.

In 1979 and 1980, French automaker Renault bought 46% of AMC, gaining effective control.  But the partnership did not work, and AMC’s sales of cars other than Jeeps declined.  In 1986, after another eight years, the company produced 243,000 Jeeps and only 49,000 other cars. 

Meanwhile, former Ford executive and creator of the Mustang Lee Iacocca was “turning around” the ever-cyclical Chrysler Corporation.  Iacocca believed that, despite troubles and losses, AMC had potential, but only because it owned the Jeep brand.  He thought the demand for “recreational vehicles” would grow in coming years.  The original “sport utility vehicle” (SUV), the Jeep, had a strong tradition and reputation.  In 1987, Chrysler paid about $1.5 billion to buy AMC from Renault and the other stockholders. 

The roller-coaster ride of Chrysler could fill several books.  From its stunning start in the 1920s under the brilliant former GM executive Walter P. Chrysler through post-war struggles, the Iacocca “turnaround,” two government bailouts, and failed ownership by both Germany’s Daimler-Benz and U.S. private equity firm Cerberus, the company has been through the wringer.  Nevertheless, between 1990 and 2000, Jeep sales rose from 196,000 to 495,000.

In 2009, Chrysler went bankrupt, wiping out its shareholders.  The company appeared hopeless, despite the continuing success of its Jeeps and its Ram trucks, spun off from the Dodge division.

Italy’s largest automaker, Fiat, controlled by the wealthy Agnelli family, had a similarly troubled history and seemed the unlikeliest of saviors for Chrysler.  But Fiat’s CEO, Sergio Marchionne, merged the companies, creating Fiat Chrysler Automobiles (FCA).  Marchionne seemed to understand the U.S. auto buyer more than many Americans, boosting the Chrysler brands, particularly Jeep, Ram, and Dodge.  He pulled off the miraculous and the combined company prospered.

In 2018, FCA sold 2.2 million cars and light trucks in America, ranking 4th, after GM, Toyota, and Ford, but well ahead of Nissan and Honda.  Of those 2.2 million, 973,000 were Jeeps, up 17.5% from 2017, ranking as the 6th best-selling and the fastest-growing of the top fifteen brands.  Ram sold 587,000, up 7.3%, the second-largest increase among the top fifteen.

Marchionne’s success in America and abroad led to the proposed FCA-Renault merger now proposed.  Marchionne had advocated such an alliance but died in 2018.  His successors and the Agnelli family moved ahead with the deal, which seems likely to happen.

Despite some bad owners, numerous near-bankruptcies, and continuously changing ownership, the venerable Jeep has not only survived, but prospered.  Without the vision of men like Henry Kaiser, Roy Chapin, Jr., Lee Iacocca, and Sergio Marchionne, the Jeep might have died and been long-forgotten, alongside many other formerly famous American brand names.

Subscribe To Our Free Newsletter

Subscribe To Our Free Newsletter

Sign up for business history stories and news from the American Business History Center.

You have Successfully Subscribed!