The Story Of IKA and WOB

In my opinion, the dumbest mistake American Motors ever made was not buying Jeep earlier. Doing so would have made them a world-class automaker. The failure to buy Jeep in 1963 was probably a main factor in their eventual takeover by Chrysler.

In 1953, Jeep builder Willys-Overland’s assets were assumed by Kaiser Industries as a way for Henry and Edgar Kaiser to salvage something out of their doomed Kaiser-Frazer company. At the time, Kaiser-Frazer was losing vast sums of money while Willys-Overland was a money-maker, and it seemed likely to remain so for a long time because it had essentially no competition in the four-wheel-drive market.

Willys could price its vehicles without worrying about being undercut by another company.Under Kaiser, the renamed Willys Motors greatly expanded its profitable overseas businesses. By 1963 it was a major stockholder in the two largest automobile and truck builders in South America: Industrias Kaiser Argentina (IKA) and Willys-Overland Brazil (WOB). IKA built Kaiser, Rambler, and Renault automobiles, and would soon create its own IKA-branded car. IKA also produced large numbers of Jeep-branded vehicles. Meanwhile, WOB also built Jeep vehicles along with the Willys 2600, a restyled and improved version of the old Aero Willys. Both companies were so significant that at the conclusion of the 1963 model year they had produced a total of 94,500 passenger cars and Jeep vehicles, more than Jeep produced in America. Suffice it to say, IKA and WOB were very profitable.

Sometime around 1959, Kaiser Industries’ Vice President Edgar Kaiser contacted Roy D. Chapin, Jr., who he knew, to ask if AMC wanted to buy Jeep. The Kaisers had found they didn’t really enjoy the car business. They had been badly shaken by the failure of Kaiser-Frazer and were anxious to sell Jeep to concentrate on businesses like extractives: things dug up from the earth. Chapin went to his boss, George Romney, with a proposal that AMC acquire Willys Motors.

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• AMC