How Castaing helped fuel the SUV craze
Whose idea was the Chrysler purchase of AMC?
It came from Chrysler Chairman Lee Iacocca. Renault was in trouble. Some of the Renault people were blaming the venture in America as a reason for the trouble. (Renault acquired 46 percent of AMC in 1979 to gain US market share.) Iacocca was interested in AMC for a good reason: Jeep. AMC had invented the first sport-utility for young urban professionals called the Jeep Cherokee Limited. The money it was bringing to the company was tremendous. I still believe the sale was the biggest tragic mistake of Renault. Over time, Jeep has proven to be the 'golden goose' of the new Chrysler.
When did you see the potential for sport-utilities?
We saw the potential for sport-utilities at AMC. With the success in 1985 of the four-door, black-painted, gold-striped Cherokee Limited, we realized that we had found the beginning of a craze that became sport-utilities. In 1986, we decided to invest in the production of the Grand Cherokee.
What did Chrysler bring to the deal after the AMC purchase in 1987?
Chrysler brought the weight of the company, more money to invest and the new production facility at Jefferson Avenue in Detroit. So Jeep got horsepower behind it.
Jeep is now one of the most recognized brand names in the world. Who gets credit for that?
Brand recognition starts with the product itself. The name of Jeep (today) was created by the success of the Cherokee and the Grand Cherokee.
When you conceived the Grand Cherokee, did you already sense that these were going to be personal-use vehicles?
As soon as the Cherokee was in production in 1983 as a 1984 model, we saw it was perceived as a car. People started enjoying it as a fashionable station wagon on a high performance four-wheel-drive system.
I remember saying, 'How about if we were just to dress up the car like an import luxury vehicle? The suspension is fine. We have a wonderful powertrain.' So we painted it black with gold wheels and gold stripes. We created a craze with the Cherokee Limited. Overnight it became a hot seller.
AMC discovered and exploited what became the sport-utility craze?
We had Jeep. We decided to do something with Jeep, instead of staying with the traditional market which some people at AMC were advocating.
The sport-utility craze went on to dominate the US industry for the next decade. Did you have to sell the idea to Chrysler?
In 1986, we were already designing the second one, the ZJ (Grand Cherokee). Going into Chrysler, the ZJ (program) was postponed almost two years from 1989 to 1991 even though people at Chrysler were convinced a sport-utility market was going to work. It took some time for (former AMC President) Joe Cappy and I to convince everyone that we had to stick to the plan.
But Chrysler went on to market both the Cherokee and the Grand Cherokee.
Six months before the start of the Grand Cherokee, Chrysler sales and marketing people were still convinced the Cherokee should not be around. They convinced Iacocca.
We went through a crisis in the spring of 1992 because we had run out of parts for Cherokee when the market was still clamoring for it. Here we are in 2000 today, and Cherokee is still humming along.
You are suggesting AMC brought not just the Jeep brand name to Chrysler but a product philosophy and strong voice for Jeep within the company?
Yes, that is true. Not making Cherokee could have been a very costly mistake because in 1991 and 1992, Chrysler was not out of trouble. Making Cherokees or not making Cherokees was a huge swing financially in terms of saving the company.