The Law of Jeep Corporate Ownership

Earlier this week, reports began to circulate that China’s Great Wall Motors expressed interest in purchasing Jeep. Since then, further reports have indicated that discussions between the two companies have not taken place, and that Great Wall will have to overcome a great many hurdles before such a deal can even that can happen. Great Wall shareholders may therefore breathe a sigh of relief for now and hope no deal materializes in the future, because not buying Jeep could be the best decision that Great Wall ever makes. Why? There is an unwritten but irrefutable law of the automotive industry that states no matter how successful Jeep is, whoever owns them is doomed. Call it the Law of Jeep Corporate Ownership. As proof, consider the fates of Jeep’s corporate owners.

Fiat Chrysler: not dead yet, but Ferrari is now independent, Lancia is practically gone, Chrysler is down to two models, Alfa Romeo and Maserati may or may not be up for sale, and Sergio Marchionne really wants a merger. Meanwhile, Jeep is, on the whole, enjoying a fair amount of success thanks to the booming SUV market.

Chrysler LLC: bankrupt after two years thanks to the 2008 financial crisis, bailed out by the U.S. government, and then sold to the Italians. Admittedly, Jeep wasn’t doing well at the time either, but, then again, that was true for the automotive industry in general.

DaimlerChrysler: a merger of equals only in that it was equally disastrous for both parties. As for Jeep, sales were relatively healthy during this period, if not exactly steady, thanks largely to the WJ Grand Cherokee and the KJ Liberty.

Chrysler Corporation: the epitome of falling from grace. Chrysler enjoyed both commercial and critical success in the 1990s, but survived a hostile takeover attempt only to merge with Daimler. Jeep, on the other hand, rose to new heights with the ZJ Grand Cherokee.

Renault: purchased a substantial share of American Motors to obtain a bigger slice of the American market, but aging AMCs and Kenosha-ized Renaults weren’t up to the task. Also, chairman Georges Besse was assassinated in 1986. Renault sold their stake in AMC to Chrysler in 1987, and got out of the U.S. market for good. In contrast, the XJ Cherokee an YJ Wrangler brought Jeep into the mainstream and transformed the SUV market.

American Motors: gambled and lost on the Pacer, and then sought help from Renault, who had an even worse record in the U.S. market. The one thing AMC did right, however, was to introduce the CJ-7 and SJ Cherokee, along with numerous appearance packages, thereby transitioning the Jeep image from utilitarian workhorse to lifestyle accessory.

Kaiser: bought Willys in 1953 with the hope of becoming profitable. Both companies ceased manufacturing cars by 1955 (at least in the U.S.). Meanwhile, the Jeep line fulfilled the hopes of profitability, thanks to an expanded lineup including the evergreen CJ-5 in 1954 and SJ Wagoneer in 1963.

Willys: saved by the Jeep during WWII after struggling through the Great Depression by building compact cars. Introduced the Jeep to the civilian market after the war, and expanded the Jeep concept with station wagon and pickup truck models. Tried again with the compact car market in 1951, and went bankrupt in 1953 as a result.

American Bantam: developed the original design for what would become the Jeep. The production contract for the U.S. Army’s light 4x4 would have been salvation to Bantam, which had little success selling their Austin Seven-derived small cars. However, the Army was dubious of Bantam’s production capacity, and so solicited Ford and Willys for their own versions of the Bantam Reconnaissance Car (BRC). In the end, Willys’ design was deemed superior and selected for production, Ford received a contract production deal, and the Jeep went on to play a pivotal role in WWII. As for Bantam, they received a token contract for a few BRCs, went on to produce trailers during and after WWII, and never again built a motor vehicle.

So, you see, all of Jeep’s corporate owners have failed miserably, without exception and irrespective of Jeep’s own success. If fact, this Law of Jeep Corporate Ownership is perhaps the only thing that has remained constant for the past seventy-five years in the otherwise unpredictable automotive industry, and its hard to predict future success with a past failure rate of 100%. So as a would-be Jeep buyer, let Great Wall beware.