The winner of 2014’s car sales in America has not been the new Mustang or the new full-sized SUVs from General Motors, or even the new midsized pickup trucks at Chevy and GMC. No, without a doubt the biggest increase in sales in the automotive market this past year belonged to Jeep: With sales up an astonishing 41 percent for the year, the brand was responsible for almost 25 percent of the total increase in U.S. car sales.
For an automobile company that’s been bought and sold around the industry more often than any other manufacturer, that’s amazing. Then again, the original Jeep of World War II, which solidified the brand’s image for all time, started life as an orphan from a bankrupt car company and was designed in just five days.
Thank You, Karl Probst
It started almost two years before Pearl Harbor, when the U.S. government decided its military would need a small but tough four-wheel drive reconnaissance vehicle for use in any terrain in the world. It put just such a concept for a vehicle out for bids. The frontrunner was the American Bantam Car Company; the company’s strained finances, which had left it with little engineering staff on payroll, made it a most unlikely bidder for such a major military order.
But Bantam reached out to an independent Detroit designer, Karl Probst. He at first turned down their offer, but then agreed to design the vehicle because the commitment had the U.S. Army’s backing. He delivered his design and blueprints on July 22, 1940 — just five days after he started work on the Jeep.
Of course, knowing Bantam’s financial problems, the Army realized that, should America enter the war, the company could never achieve full-scale production of the vehicle. So the Army handed Probst’s design to Willys Overland and the Ford Motor Company, asking both to try improving it.
For the most part the improvements to the original Jeep design were negligible; Probst had wisely based most of vehicle’s underpinnings on parts already in production for other vehicles. Still, by the time testing of the hand-built models started in late September of 1940, it became obvious that Willys’ improvements to the Bantam design would win out.
To this day, however, one part of Ford’s experimental version still adorns all Jeep models. For it was Ford that created the Jeep’s highly identifiable grille.
Now “Jeep” Means Jeep™
Needless to say, the Second World War put the Jeep permanently on the map. Such was its success that Willys applied for a trademark on the name. This was unusual because, despite the many historical myths about how the Jeep came to get its name, that was the common nickname for many military equipment items up to that point, including the predecessor to Boeing’s B-17 Flying Fortress.
Nor was it true that Willys realized that a civilian consumer market for small, four-wheel-drive vehicles would develop after the war because GIs were buying war surplus Jeeps for their personal use. No, civilian production of the Jeep CJ series began in 1945, just as the war ended. Those who couldn’t afford brand new models were the ones buying the war surplus vehicles.
None of this means that the original Jeep’s success saved Willys. Jeep was sold in 1953 to Henry Kaiser, the famed American road and dam builder; Kaiser had also perfected Liberty Ship construction during the Second World War in an attempt to save his nearly failed car company. By the early 60s that company has become Kaiser Jeep; and, although Jeeps were built and sold throughout that period, the company was never considered a major success. And so in 1970 American Motors, another car company that in most years had finance issues of its own, purchased Jeep from Kaiser.
And sure enough, by the late 70s AMC Jeep was in such trouble that only Renault, stepping up to the plate with loads of European capital, moved in with a joint venture alliance to save the company. Few remember this now, but under Renault’s guidance it was actually Jeep that became the first American auto manufacturer to set up shop in China. Beijing Jeep started producing vehicles in 1984.
Still, by the mid-80s Renault was facing its own money problems in Europe. It promoted Georges Besse to take over the troubled firm in 1985, and he managed to put the company back into the black in record time. Meanwhile, AMC Jeep was still experiencing financial difficulties in the 80s in spite of the U.S. car market’s incredible recovery from the Second Energy Crisis. Yet, while many insiders at Renault were pushing to dump their American joint venture partner, Besse had championed new AMC Jeep products and sincerely believed the French automaker’s future lay in America.
The only problem was that on November 17, 1986, Besse was assassinated by Action Dirécte, an anarchist group, leaving Renault rudderless.
Such a Deal!
Enter the man who gave the world the Ford Mustang and the minivan, Lee Iacocca. For all his mistakes, Iacocca still had the best “car guy gut” in the world — he had an incredible instinct for predicting trends long before the public demanded something new. He managed to pick up both AMC and Jeep for around $800 million, an unbelievable bargain when one considers that the licensing rights to use the “Jeep” name brand for other products often exceed $500 million a year. Iacocca had become convinced that the SUV craze, already in progress, was about to change the automotive landscape forever, hence his reason for purchasing Jeep.
As for the AMC side of things, under Chrysler that would disappear quickly enough. But even here Iacocca found real value: AMC Jeep’s engineers, some of the scrappiest guys in the business, were used to bringing new vehicles to market on tight budgets, projects that no one else in the industry could even work on with so little R&D money. The AMC Jeep engineers were a key part of Chrysler’s renaissance in the 1990s.
By 1998 Chrysler — with AMC now a long-dead memory — and Jeep was the most profitable car company in America per vehicle built, and more popular with the public than the company had been since the days of Walter Chrysler himself.
“I’m Still Standing”
Then came the Daimler buyout, which was the turn in the road to Chrysler’s eventual bankruptcy. That was followed by the short ownership of Cerberus Capital Management and finally, in a moment of sheer desperation, our government simply gave the company to Sergio Marchionne of Fiat.
Ironically, in the late 80s, right after the AMC Jeep purchase, when Chrysler Jeep had again run into major financial trouble thanks to Iacocca’s other “bad automotive judgment calls,” he had tried to sell the company to Fiat. But a generation earlier, Fiat had wanted nothing to do with Chrysler Jeep.
And so, 74 years after a financially troubled American car company hired Karl Probst to create the original Jeep (grille courtesy of Ford), and after ownership under Willys, Kaiser, AMC, Renault, Chrysler, Daimler, Cerberus and Fiat, Jeep vehicles were the outright winners in overall sales for 2014.
Therein lies today’s history lesson. Just like in the Second World War, no matter how many different armies tried to destroy Jeeps at every possible turn, the brand proved indestructible, slogging through every disaster around and thereby ending up victorious. It hasn’t mattered whether the battles were in WWII or in the automotive industry; when the dust clears, Jeep is still standing.
© Ed Wallace 2015
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: firstname.lastname@example.org; read all of Ed’s work at www.insideautomotive.com.