Quick Wash

For ailing American Motors Corp., Model Year 1967 was bound to be a year of change--if not in the company's sad sales record, then in its Detroit executive suite. Having spent $60 million on restyling, beleaguered President Roy Abernethy, 60, all but abandoned the head office for the hustings to drum up dealer interest in the new models. In Detroit, A.M.C. Chairman and No. 1 Stockholder Robert B. Evans, 60, settled back to watch the progress on his own pledge to "turn this company around."

Last week there was turning aplenty--though it was not exactly the kind Evans had in mind. After a long and contentious board of directors meeting in Detroit came the "early retirement" of Abernethy and the "resignation" of Evans. Into their places went new Chairman Roy Chapin Jr., 51, whom Evans had hand-picked as general manager last September, and new President William V. Luneburg, 56, a vice president who joined A.M.C. in 1963 as an Abernethy recruit.

Down the Middle. It was Evans who brought on the changes. A flamboyant Grosse Pointe investor-sportsman who late in 1965 began building a $2,000,000 A.M.C. stock holding (now worth $1,500,000), he has been at odds with Abernethy ever since he became board chairman last June. Onetime Auto Salesman Abernethy delighted in hooting that New Boy Evans knew nothing about the business. Evans, for his part, upstaged Abernethy at press conferences, privately complained that his suggestions were being ignored. Friction grew worse when A.M.C. wound up fiscal 1966 with a $12,648,000 loss--its first since 1957. Finally, for all of Abernathy's cigar-chomping ebullience, sales of "Roy's Cars," as the new models are called at A.M.C., have been so disappointing as to force a ten-day shutdown of plants in Milwaukee and Kenosha, Wis.

Evans therefore entered last week's board meeting planning to stay on as chairman but urging that his friend and

Grosse Pointe neighbor Chapin be made president, with Luneburg as his No. 2 man. Both Evans and Abernethy argued their cases--while the other was out of the room. When it came to a vote, the twelve-man board was split down the middle. Trying for compromise, they told Evans that while Chapin and Luneburg could replace Abernethy, the company had little cash to spare for three top-level salaries. Evans got the hint, and bowed out with Abernethy.

Still A.M.C.'s biggest stockholder, Evans will keep his seat on the board and remain on the executive committee. "The company has cleansed itself out, so to speak," said Evans at a press conference next day, but "I will have my little cotton-pickin' hands in this pie for quite some time."

The corporate cleansing is intended to please A.M.C.'s creditors, including a group of 24 banks, headed by Chase Manhattan, which last year advanced a $75 million line of credit in return for a mortgage on A.M.C. property. The credit line, which will be exhausted in May, must be renewed or replaced. The new team, moreover, brings to A.M.C. something it has never had at the top management level: solid financial experience.

The wealthy son of the founders of the Hudson Motor Car Co., which merged with Nash-Kelvinator Corp. to form A.M.C. in 1954, Chairman Chapin worked as a Hudson test driver after Yale ('37), eventually became A.M.C.'s treasurer under onetime President George Romney. Shunted into the limbo of A.M.C.'s international operations by Abernethy in 1961, Chapin turned semi-exile into considerable success. He revived a once unprofitable Canadian subsidiary, built A.M.C.'s European sales to 74,000 cars a year, even managed to get a dressed-up Classic selling well in the Common Market.

A Sporty Specialty. Helping Chapin will be President Luneburg, a Ford alumnus, who had been chief of its cost-control and budget departments and later general manager of its Dearborn assembly plant. Abernethy recruited Harvard Business School Grad Luneburg and set him to establishing cost-accounting procedures, which had been nonexistent in the Romney-era rush to take the lead in compacts. At the cost of severe strikes, Luneburg also helped break the hold union leaders had gained on work practices and wage policies during the same period.

Looking ahead, Chapin plans to drop Abernethy's tactic of matching the Big Three nearly model for model. "We are not going to attempt to be all things to all people," he says. Instead, A.M.C. will put its diminished resources in a few distinctive, and hopefully lucrative, new cars. One possibility: a sporty new compact-size specialty car, which is now being developed to compete with the Ford Mustang and Chevrolet Camaro and could be introduced next fall. Until then, 1967 will have to be sweated out.

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