The Chrysler Corporation was in trouble. Again. During the oil crisis of 1979, people were scrambling for smaller, more economical cars but, despite the hard lessons learned in the similar shock event six years prior, Chrysler had little that was competitive to offer. Its sales subsequently tumbled, its coffers emptied, and customers walked away in droves. The company still managed to set some records, but not good ones: as 1980 rolled around, it posted an annual loss of $1.1 billion, which at the time was reported to be the largest in the history of corporate America.
Lee Iacocca, then the company’s Chief Executive Officer, knew the organisation was on the brink. Ultimately that’s what he’d been brought in to fix. Following a successful and storied stint at Ford, he’d been hired at the end of 1978 to patch up and refloat the rapidly sinking ship that was Chrysler. The stakes were high, the U.S. Department of Transportation estimating that 400,000 people could lose their jobs if the corporation folded, directly and indirectly, while the economy would take a $30 billion hit. And those were only the headline loss and decline forecasts.
The turnaround, suffice it to say, was dramatic. Iacocca had been working on a government bailout, which was signed into effect at the start of 1980 and staved off the immediate threat. He also obtained numerous concessions and slashed through dead weight and inefficiencies. Sadly, that also included the abandonment of the promising Chrysler turbine engine programme. But not all innovation went out the window: the company’s new K platform made its debut later in the year, and the streamlined and flexible setup was soon underpinning a host of efficient and affordable cars.
