1974-1977
The chaos of the embargo times and the immediate aftermath were stunning. The beleagured Nixon Administration, already smarting from Watergate, got hammered harder. America fell into a recession for the first time since WWII, and by the mid-70s it was being felt everywhere.
Car sales fell off again, and this time however new models from Honda, Toyota, Datsun and Volkswagen continued to eat away at the sales of the American makers. The decision to re-do the Camaro, Nova and Corvair in 1974 had served GM well, but they had other problems. Quality was comparable to the imports, but Detroit still had a few areas to fix.
All of the American automakers went on a crash course to drop the size and weight of their big car offerings, figuring - correctly as history would show - that new cars needed to be smaller, more space and fuel efficient than their predecessors.
GM, drawing onts past knowledge, began researching fuel injection for new models, and they also began working on the usage of aluminum and fiberglass in mass production car bodies, which had been done on a small scale in the 1960s. GM's first front wheel drive small cars, the X-bodies, went to production in 1977. Impressive cars from the start, the X-bodies would soon overshadow the old-school Nova, which would be retired in 1980. The Corvair, still a sporty coupe, still sold strong, largely to younger couples who wanted a car with style in the days of efficiency.
But even as the X-bodies went out to market, GM prepared to roll out the big guns. They in 1976 began planning a car to be launched in 1982, which they figured would put the imports on the back foot.....
GM also went to work on re-doing its massive plant infrastructure. Long put off, the reworks of dozens of GM plants would consume billions of dollars, but would ultimately put GM in good stead for the future.
Ford also went to work on its smaller cars. The steady Falcon, which had served since 1960, was redesigned in 1976, going to front wheel drive and taking much of its platform from its European siblings. The European Ford Escort took much of its chassis to the new Falcon. Ford also planned with a second shot, planning a worldwide car for 1978, the supermini to be called the Fiesta.
Brought back to life by the small car revolution, AMC also moved fast. The Gremlin and Hornet soon found the decent Offenhauser engine inadequate, particularly because of its 3.0-liter displacement and its costs. The engine's technology however began to hsow up in other models, as AMC began to focus efforts on new cylinder heads and other designs.
The safety hysteria brought on by Ralph Nader in 1966 had abated, but it also had raised that eyebrow for all of Washington to see. Insurance rises, new and over the top safety legislation, the removal of lead from gasoline and other aspects dropped the performance of vehicles across the board.