automobile industry executives and other leading business leaders declined yesterday to assess the plight of Chrysler Corp., tenth largest of America's corporate giants.
But consumer advocate Ralph Nader, stating he was "talking like a conservative ecomomist," said flatly that the Detroit-based automobile manufacturer should be allowed to file for bankruptcy.
"Mismanagement at the company has been incredible . . . why should a subsidy solve Chrysler's problems? . . . Let is go bankrupt," Nader said in an interview, in which he argued that Chrysler's business soon would be assumed by other American and foreign car builders.
Chrysler, with some $1.2 billion of debts and losses of $261 million in the first half of 1979, is seeking $1 billion of tax relief from the federal government plus a two-year delay in meeting exhaust emission standars for the early 1980s.
Although Chrysler's declining fortunes have been known for sometime, the public appeals by Chrysler executives this week were reminiscent of the early 1970s, when the Penn Central Railroad and Lockheed Corp. both sent their officers to Washington to plead for financial support.
Penn Central lost its lobbying appeal and within weeks had become the largest bankruptcy case in businesss history. Lockheed won loan guarantees from the government -- primarily because of its role as a major defense contractor -- and today has been restored to relative financial health.
Early soundings on Capitol Hill indicate that key senators and representatives from states where Chrysler has large employment bases are inclined to support some sort of aid to Chrysler -- either the tax break the company is seeking or a loan guarantee package similar to that which helped Lockheed.
Nationwide, Chrysler has some 130,000 employes plus dealerships in every state and suppliers that add up to about 500,000 persons who would be affected directly by an insolvency. Many of these persons are concentrated in the key industrial states of Illinois, Indiana, Michigan, Ohio and New York.
General Motors Corp. officers, including Chairman Thomas Murphy, declined through spokesmen yesterday to discuss the Chrysler situation. "We don't want to get into it . . . we don't see any point," was all that GM "public Relations Vice President Anthony De Lorenzo would say.
Similarily, Ford Motor Co. spokesman William Harris said "it doesn't appear that anybody will be jumping up to comment."
Typical of executives in other industries, the normally outspoken Irving Shapiro, chairman of E. I. du Pont de Nemours & Co., said through a spokesman that "comment would be inappropriate because Chrysler is a customer" of Du Pont.
Although GM's Murphy would not talk yesterday, he has said previously that he is opposed to any special dispensation for Chrysler on emission or mileage standards. And Ford President Philip Caldwell said in recent days that he "hoped" some other way could be found besides a government investment to prevent a failure at Chrysler -- which ranks a distant third behind GM and Ford in the U.S. auto business.
Although there was official silence from Detroit's board rooms yesterday, Wall Street analysts said both GM and Ford wanted Chrysler to remain a viable company if for no other reason than to prevent government antitrust action against what would become the two surviving giants. Since 1976, the Federal Trade Commission has been studing the competitive situation in the auto industr and some sort of attempt to divide GM's empire is anticipated by many analysts. GM's share of the U.S. market has been rising steadily and now approaches 60 percent, a success Murphy has attribued to his own firm's management achievements.
The potential for antitrust action against GM was one reason Nader cited yesterday for his opposition to any government subsidy or financial aid. "A Chrysler failure sets them [GM and Ford] up for a break-up," he charged, by "monopolistic practices" of GM and Ford, such as exclusive dealership requirements.
Nader said many current Chrysler workers soon wo!ld find jobs with such firms as Honda and Volvo, which he forecast would quickly act to establish manufacturing a Chrysler failure. Normal unemployment programs would help these workers in the meantime, he said.
But the impact on various state economies goes far beyond Chrysler's regular payroll. In Michigan, for example, Chrysler has 66 facilities with more than 40 million square feet, including 25 auto or truck manufacturing and assembly plants. Chrysler has 87,000 workers in the state, an annual payroll of more than $2.3 billion; 6,238 suppliers; 189 dealerships with 5,000 workers and an annual tax bill of $89 million. The firm purchases $2.5 billion of goods a year in the state from other compaines.
In Delaware, were Chrysler has a major assembly plant at Network, employes number about 6,000 and the annual payroll is $123 mmillion. In Maryland, Virginia and the District, the auto firm has more than 200 employes, a payroll of about $6 million ayear, more than 200 dealers with 5,000 workers and annual local taxes of about $1 million.
These figures don't include taxes paid by dealers, the business of diners adjacent to manufacturing plants or charitable and civic contributions by Chrysler or its suppliers, among other factors. Among the largest bankruptcies or potential failures of the 1970s have been:
The collapse of the Penn Central Railroad in mid-1970, after an ill-fated merger of the old New York Central and Pennsylvania railroads. Congress killed a Nixon administration plan for $200 million for guaranteed loans.
That was not the end of the Penn Cenral saga, however. Faced with threats by trustees of the banrupt firm to begin shutting down rail services, the government poured millions of dollars into the Pennsy and six other smaller lines that also failed. Eventually, the government helped establish a new firm called Consolidated Rail Corp. to make an attempt at returning the rail system to profitability.
Lockheed Corp., which faced potential bankruptcyy in 1971. Congress enacted the Emergency Loan Guarantee Act, authorizing up to $250 million in guaranteed loans.
By mid-1975, Lockheed had used up $245 million of the loan guarantee provisions but, as business turned around, a slimmer company began to retire these loans. At the end of 1977, banks said they no longer needed a government guarantee for $60 million of loans then remaining, and the loan program was ended.
Government Employees Insurance Co., a large national automobile insurer based in Washington, was headed for insolvency in 1976. Because of the costs involved in having other firms and state government pools assume more than half a million auto policies, the adverse impact on financial markets was judged to be severe. State regulators kept the firm in business until Geico had new management, as well as new capital.
The demise to W.T. Grant Co., in the biggest retail industry failure on record. In 1975, Grant had 1,100 stores, 70,00 workers and $2 billion of annual sales -- plus a $20 million-per-month loss. In this instance no government agency stepped forward and no bailout was sought.
Franklin National Bank of New York failed late in 1974, the victim of foreign exchange speculative losses. The Federal Deposit Insurance Corp. intervened as receiver for the defunct Long Island bank and sold major assets to a consortium of European banks CAPTION: Picture, Lee Iacocca, left, checks statistics as John Riccardo announces Chrysler's deficit on Tuesday. AP, Map, Chrysler Work Force Concentration Number of Workers & Annual Payroll, By Dave Cook -- The Washington Post