flared_fender
New Member
This is an article from Fortune from April 1970 about Chrysler Corp. and its economic situation.
It's a lengthy read, but I found it interesting nonetheless, especially for Fuselage addicts. The paragraphs that are more interesting in that respect are in blue so you can skip directly to them.
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The sign, on the window of White Plains (New York) Dodge, bespeaks the anguish of Chrysler's dealers around the country.
CHRYSLER'S PRIVATE HARD TIMES
Townsend's toughness turned the trick, and then the trick turned Townsend. Now the directors are getting tough too.
Once again, Lynn Townsend is picking up the pieces at Chrysler. After taking charge of a scandal-ridden and nearly moribund company in 1961, Townsend had restored its honor, improved its cars, revamped its dealer system, and almost doubled its share of the U.S. automobile market. Yet last year, Chrysler's heroic chairman found himself presiding over a precipitous return to hard times. During 1969, Chrysler fell prey to some bad luck and some bad economic conditions. But it also suffered from some bad management decisions. Townsend's success had made him overconfident, and for a while he relaxed his grip; the tight operational controls that had characterized his reign suddenly slackened. Almost overnight, Chrysler's profits plummeted, and many of the gains Townsend had labored for years to achieve were obliterated.
In 1968, Chrysler had climaxed its spectacular comeback by setting all-time records for revenues, earnings, earnings per share, and just about everything else. The final quarter of that year, in which Chrysler earned $112 million, was the most profitable in the company's history. Last year, earnings and earnings per share fell almost 70 percent, to their lowest levels since 1962. For all of 1969, Chrysler netted just $88,800,000, on revenues of $7.1 billion; during the final quarter, the company had a $4,400,000 deficit, the first time it had been in the red since the third quarter of 1961. And it is expected to report an even larger loss for the first quarter of 1970. The company's stock, which reached a peak of $72.75 a share late in 1968, was selling for somewhat more than a third of that early last month, which is about where it was seven, years ago.
Townsend has made a succession of swift moves similar to the tactics he used during the early Sixties. The most painfully reminiscent are his austerity measures. Chrysler has sharply curtailed its capital-investment program, postponing the completion of one plant and the expansion of two others. It has made three across-the-board cuts in the operating budget. And it has fired - "indefinitely laid off," to use the industry jargon - more than 12,000 of its 140,000 U.S. employees, white-collar and blue-collar alike. Among the casualties were several hundred hard-core trainees. Under the U.S. Labor Department's JOBS program, Chrysler had a contract to train 4,500 production workers, but it had to cancel that commitment early this year. This was a particularly desperate action for Chrysler, since Townsend recently became chairman of the National Alliance of Businessmen, which ardently supports JOBS.
In perhaps his most controversial effort to resuscitate Chrysler, Townsend hastened the departure of Virgil E. Boyd from the company's presidency at age fifty-seven. Last January, Boyd, an easygoing man who had been distinguished for his amiable relations with Chrysler's dealers, was given the newly created, and largely ceremonial, position of vice chairman. It appeared as though Boyd was being made the scapegoat for Chrysler's collapse, despite statements to the contrary by Townsend and by Boyd himself.
Replacing Boyd was Townsend's long-time protégé, John J. Riccardo, a forty-five-year-old accountant who had served as group vice president of the U.S. and Canadian automotive division, the third-ranking position in Chrysler's hierarchy. Eugene A. Cafiero, forty-three, an engineer who had held the obscure job of vice president in charge of Latin-American operations, was vaulted over several higher-ranking executives into Riccardo's job.
Earlier, Townsend had acted to prevent a recurrence of some major problems that contributed to last year's profit plunge. He ordered the restyling and re-engineering of the company's top-of-the-line, or C-body, cars for the 1970 model year. The C-body cars - Imperial, Chrysler, Plymouth's Fury, and Dodge's Monaco and Polara - had been restyled and re-engineered for the 1969 model year, but the public had found them unappealing; normally there would have been no important alterations until the 1972 model year.
It's a lengthy read, but I found it interesting nonetheless, especially for Fuselage addicts. The paragraphs that are more interesting in that respect are in blue so you can skip directly to them.
----------------------------------------------------------
The sign, on the window of White Plains (New York) Dodge, bespeaks the anguish of Chrysler's dealers around the country.
CHRYSLER'S PRIVATE HARD TIMES
Townsend's toughness turned the trick, and then the trick turned Townsend. Now the directors are getting tough too.
Once again, Lynn Townsend is picking up the pieces at Chrysler. After taking charge of a scandal-ridden and nearly moribund company in 1961, Townsend had restored its honor, improved its cars, revamped its dealer system, and almost doubled its share of the U.S. automobile market. Yet last year, Chrysler's heroic chairman found himself presiding over a precipitous return to hard times. During 1969, Chrysler fell prey to some bad luck and some bad economic conditions. But it also suffered from some bad management decisions. Townsend's success had made him overconfident, and for a while he relaxed his grip; the tight operational controls that had characterized his reign suddenly slackened. Almost overnight, Chrysler's profits plummeted, and many of the gains Townsend had labored for years to achieve were obliterated.
In 1968, Chrysler had climaxed its spectacular comeback by setting all-time records for revenues, earnings, earnings per share, and just about everything else. The final quarter of that year, in which Chrysler earned $112 million, was the most profitable in the company's history. Last year, earnings and earnings per share fell almost 70 percent, to their lowest levels since 1962. For all of 1969, Chrysler netted just $88,800,000, on revenues of $7.1 billion; during the final quarter, the company had a $4,400,000 deficit, the first time it had been in the red since the third quarter of 1961. And it is expected to report an even larger loss for the first quarter of 1970. The company's stock, which reached a peak of $72.75 a share late in 1968, was selling for somewhat more than a third of that early last month, which is about where it was seven, years ago.
Townsend has made a succession of swift moves similar to the tactics he used during the early Sixties. The most painfully reminiscent are his austerity measures. Chrysler has sharply curtailed its capital-investment program, postponing the completion of one plant and the expansion of two others. It has made three across-the-board cuts in the operating budget. And it has fired - "indefinitely laid off," to use the industry jargon - more than 12,000 of its 140,000 U.S. employees, white-collar and blue-collar alike. Among the casualties were several hundred hard-core trainees. Under the U.S. Labor Department's JOBS program, Chrysler had a contract to train 4,500 production workers, but it had to cancel that commitment early this year. This was a particularly desperate action for Chrysler, since Townsend recently became chairman of the National Alliance of Businessmen, which ardently supports JOBS.
In perhaps his most controversial effort to resuscitate Chrysler, Townsend hastened the departure of Virgil E. Boyd from the company's presidency at age fifty-seven. Last January, Boyd, an easygoing man who had been distinguished for his amiable relations with Chrysler's dealers, was given the newly created, and largely ceremonial, position of vice chairman. It appeared as though Boyd was being made the scapegoat for Chrysler's collapse, despite statements to the contrary by Townsend and by Boyd himself.
Replacing Boyd was Townsend's long-time protégé, John J. Riccardo, a forty-five-year-old accountant who had served as group vice president of the U.S. and Canadian automotive division, the third-ranking position in Chrysler's hierarchy. Eugene A. Cafiero, forty-three, an engineer who had held the obscure job of vice president in charge of Latin-American operations, was vaulted over several higher-ranking executives into Riccardo's job.
Earlier, Townsend had acted to prevent a recurrence of some major problems that contributed to last year's profit plunge. He ordered the restyling and re-engineering of the company's top-of-the-line, or C-body, cars for the 1970 model year. The C-body cars - Imperial, Chrysler, Plymouth's Fury, and Dodge's Monaco and Polara - had been restyled and re-engineered for the 1969 model year, but the public had found them unappealing; normally there would have been no important alterations until the 1972 model year.