Mr. Auto surveys Chrysler's survival course

When Lee Iacocca strides into a room, it's no small event. The Chrysler chairman is in charge. Period! And so it was in Boston when, after hard-selling the local market analysts on Chrysler's new common-stock issue, Mr. Iacocca spent an hour and a half with a few auto writers, providing some insights on the auto industry and sharing a light lunch.

The point is, Lee A. Iacocca is Mr. Auto, a spot that Henry Ford II, Mr. Iacocca's one-time boss, filled before he gave up the reins as Ford chairman. Few people outside the auto industry might know the name of the General Motors chairman at the time, but who didn't know the name of Henry Ford?

His name is on the building. Right?

But now it's Iacocca who has succeeded in doing precisely what the former chairman of Ford Motor Company feared he might do at Ford; simply, become a ''big name.''

And there is no doubt that Lee Iacocca is a ''really big name'' in the car business - and even outside it. He's head of the commission to refurbish Ellis Island and the Statue of Liberty, for example.

The fact that Chrysler Corporation appears on the mend is due in no small measure to Mr. Iacocca, whose charisma and doggedness as well as his know-the-industry-inside-out brilliance are beginning to pay off. Chrysler Corporation came about as close to the abyss as it could without actually falling inside.

Without his magnetic pull on the work force, blue collar and white; his powers of persuasion on the US Congress and the banks; not to mention his Mr. Good Guy image on the TV tube, he might never have pulled it off.

Yet, Iacocca admits, for Chrysler Corporation to prosper from here on in, ''the economy has got to really turn around.''

Chrysler is strongest in the middle of the market, although, the chairman reports, ''we're selling a lot of big cars these days'' - and this bothers him. The price of gasoline has a lot to do with what cars sell.

The Dodge Aries and Plymouth Reliant K-cars, for example, get 25 percent of the compact market in the United States with gasoline selling at not much over a dollar a gallon. ''In Canada, with gasoline at $1.88, it gets 50 percent of the compact market.

''These floating gas prices are just like floating interest rates; they're terrible for us. We can't plan a thing,'' he protests.

The low end of the market, the subcompacts, are a disaster, he reports. ''The Japanese are taking whatever's there, but nobody seems to want them. That's because the blue-collar guy isn't back in the market yet. He's afraid of losing his job.''

The sale of 26 million shares of common stock in late March gave the resurgent carmaker some $432 million and helped it reduce its long-term debt.

''It's helping us win our way back financially,'' Iacocca declares. ''The banks now become equity partners, or stockholders, and they start to root for us.'' Even the customers are beginning to root.

''Those guys do things right,'' the happy owner of a new Reliant K-car declares.

Mr. Iacocca is particularly happy with the new hardware. Chrysler has just introduced its downsize front-drive New Yorker. In late summer it will unveil its new turbocharged sports-car derivatives of the K-platform, the 2+2 Dodge Charger and Plymouth Laser, followed by its minivan.

''Then we follow with some European-type 4-door sedans and a couple of knockout turbo coupes,'' Iacocca says.

He doesn't see anything special about building compact cars, sports vehicles, and even an executive-size car and limousine off the K-car platform. What's so new about that? he asks.

''I've derived Lincolns off of Fords for years,'' he adds, ''and GM's been doing it to a fare-thee-well. All of a sudden it's fashionable. We used to have V-8s that went from 100 cubic inches to 450. So it's no different today except that the new technology is front-wheel drive with 4-cylinder engines.

''We just take the derivatives up and down the scale.

''If you did it all unique, you'd go bankrupt. The cars would go for $15,000 instead of the $8,000 or $10,000 of today,'' he asserts.

Looking ahead, the chairman says: ''I think the whole world by 1990 will be all kinds of joint ventures. We'll build automatics and some European guy'll buy the automatics from us and we'll buy a small engine from him. We'll buy turbos or supply turbos. It won't be mergers, but some kind of joint ventures, because you have to do that to survive in this business.''

Iacocca knows a thing or two about survival, at both Ford and Chrysler.

The Chrysler chieftain sees maybe five big survivors, plus some of the smaller companies which play in their own small-size markets. ''Japan Inc. and General Motors for sure,'' he says. ''Those two I'm sure of. The rest, the jury is still out.''

As for the cooperation among the carmakers, banks, and government in Japan, he asserts: ''We shouldn't get mad at them; we should try to imitate them through cooperation between management, labor, and government, especially on projects where there really isn't that much competition.

''You're going to have to learn to get together or you get run over. The Japanese have been masters at doing this. So yes, we'll have to have a lot more cooperation without affecting competition.''

Yet Iacocca takes a dim view of the cooperative pact between GM and Toyota to build a small Japanese-designed car in a vacant GM plant in Fremont, Calif.

''You mean to tell me the biggest company in the world really needs 12 years to learn how to build a little car and that Japan needs 12 years to teach GM how to lay out one little plant?'' he protests. ''You're kidding me!''

Comparing the domestic auto industry of today with that of 18 or 20 years ago when the Ford Mustang was born, he reminisces:

''Well, we were making a ton of money then and people loved the car. The Mustang was right for the market.

''But now the world has changed and we've got to figure out how to put value into cars again - and it's tough. I'm not here to try to lead the market or follow it. I want to be on the market.

''Anytime you get ahead of the market, you go bankrupt; and anytime you lag too much you go bankrupt,'' he concludes.

''You've got to be right with it.''

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