American automobile industry in the 1950s
In 1954, the smaller American Motors Corporation (AMC) was formed when Hudson merged with Nash-Kelvinator Corporation in a deal worth almost USD $200 million ($1.735 billion in 2013 dollars) the largest corporate merger in U.S. history at that time. Other mergers with smaller independent manufacturers followed. Although AMC was moderately successful it was never sufficiently large to challenge any of the Big Three, and was eventually bought by Chrysler in 1987.
Wankel engine
American Motors Corporation (AMC), the smallest U.S. automaker, was so convinced "...that the rotary engine will play an important role as a powerplant for cars and trucks of the future...", that the chairman, Roy D. Chapin Jr., signed an agreement in February 1973, after a year's negotiations, to build Wankels for both passenger cars and Jeeps, as well as the right to sell any rotary engines it produced to other companies. American Motors' president, William Luneburg, did not expect dramatic development through to 1980. However, Gerald C. Meyers, AMC's vice president of the engineering product group, suggested that AMC should buy the engines from Curtiss-Wright before developing its own Wankel engines, and predicted a total transition to rotary power by 1984. Plans called for the engine to be used in the AMC Pacer, but development was pushed back. American Motors designed the unique Pacer around the engine. By 1974, AMC had decided to purchase the General Motors Wankel instead of building an engine in-house. Both General Motors and AMC confirmed the relationship would be beneficial in marketing the new engine, with AMC claiming that the General Motors' Wankel achieved good fuel economy. However, General Motors' engines had not reached production when the Pacer was launched onto the market. The 1973 oil crisis played a part in frustrating the uptake of the Wankel engine. Rising fuel prices and talk about proposed US emission standards legislation also added to concerns.