The campaign to bail out Chrysler Corp., which was waged sub rosa on Capital Hill for months, will be argued in the open during the weeks and months to come.
The rhetoric has begun to fly already.
Chrysler Chairman John J. Riccardo points his finger at the federal government and says the company's difficulties can be laid at the door of the Energy Act of 1975, which set stiff mileage requirements for all automakers.
As a result, the company says the government should lead Chrysler $1 billion to help to bridge the gap between now and the fall of 1980, when Chrysler will introduce a set of models (read smaller) that will make it competitive to the domestic auto market.
But Chrysler's problems date long before the 1975 Energy Act. Chrysler, with fits and starts, has seen its position in the domestic market erode for the past 20 years. Chrysler advocates forget that at the start of the Eisenhower era, it was the second biggest auto maker.
Today it is mired firmly in third place, far behind giant General Motors and Ford, which swept past Chrysler in the 1950s.
Suppose Chrysler does go backrupt, Who should care?
Take the worst-case scenario: The Company is forced into liquidation.
The shareholders will probably take a beating. But they have taken a serious beating anyway. Chrysler stock that sold for $72 a share a decade ago is selling for about $8 today.
Creditors such as banks and insurance companies might also be forced to take something less than a full return on the dollars they have lent the auto giant. But making loans involves risks. Sometimes loans are not repaid in full.
Chrysler executives already have begun to work up sympathy for the 125,000 direct employes of the company and the hundreds of thousands more who owe their jobs to Chrysler: workers at the company's 19,000 suppliers, car salesmen, dealers and the like.
But while most of these individuals might face short-term difficulties such as layoffs, most would be able to find jobs in the automobile industry.
As Alan Greenspan, former chairman of the president's Council of Economic Advisers, notes, the car buyers that Chrysler now serves will not disappear merely because Chrysler does.
While some of the purchasers might buy foreign cars, most will remain in the market for U.S.-made cars.
Suppose Ford and GM take up much of the slack. They will have to hire more workers, may even have to buy some Chrysler plants and will be forced to buy parts from many of the suppliers who now deal with Chrysler.
Does a worker or supplier really care if his or her check is drawn on a Chrysler or Ford account? Or, in the event a foreign producer bought Chrysler's assets, would a Bolkswagen or Mitsubishi check be any less palatable than a Chrysler one?
But a liquidation is a highly unlikely outcome, according to most analysts.
Chrysler Corp., if its executives are to be believed, is still a viable company. They say they are asking only for money from the government to help them bridge the gap between today and the fall of next year.
Chrysler still has assets it can sell, such as a profitable Mexican operation. It has a defense-space subsidiary, a Canadian subsidiary and a real estate subsidiary, not to mention its finance subsidiary.
Such a partial liquidation would make Chrysler a smaller company and might cause management and shareholders some pain. But businesses are forced to retrench all the time. Chrysler has done a good bit of it already, selling off many of its marginally profitable foreign foreign operations that the company added in the 1960s and early 1970s.
Chrysler might be forced into a formal, court-approved bankruptcy if its creditors find Chrysler in violation of certain loan agreements (such as the size of its working capital) and are unwilling to waive such covenants.
Forcing a company into bankrupcy is a painful, emotional affair, one banker said. But a company that is forced into bankruptcy is not necessarily a company that disappears.
Penn Central, which went into bankruptcy in 1970, is still around. Although a much different, and much smaller, company than it was when it was the largest railroad in the country, it also is in much better shape.
Had bankers pushed W.T. Grant into a court-approved bankruptcy a year earlier, one banker said, the giant retailer might have been saved.
If Chrysler is forced into bankruptcy and the court appoints a committee of creditors to oversee a reorganization, the results probably would be a little different than if Chrysler itself decided to continue to sell assets to provide the cash it needs to keep the core company going.
Chrysler would be a smaller company, concentrating on small car production. (Much of its problem today is that it makes a raft of big cars it cannot sell and it doesn't have the capability to make enough of its highly popular small cars.)
Shareholders might find themselves with a more highly valued stock than they have today if Chrysler was a smaller company, a banker noted.
The doomsayers will argue that no one will buy a car from Chrysler as long as the company is in bankruptcy proceedings. But few were buying big cars or trucks from Chrysler in recent months anyway and there is no evidence that the company's big losses and speculation about its future have hurt sales of either its Omni or Horizon models.
In any event, Chrysler Corp. provides no essential service that would doom the American economy should the unlikely happen and it disappears from the American scene.
That alone argues against any government assistance, although a case can be made that the corporation might be given a waiver for some of the more stringent mileage standards under the 1975 energy act.
If Chrysler disappeared, cars would still be provided to the American consumer and tanks would be built. Most Chrysler workers would find jobs in the auto industry and most Chrysler suppliers would find outlets for their wares.