Chrysler Corp. President Lee A. Iacocca, predicting a third-quarter loss of more than $400 million, said today the ailing automaker was seeking as much as $1.2 billion in federal aid to help solve its financial problems.
Iacocca indicated the aid request probably would be in the form of loan guarantees. The company plans to present its aid plan formally to the Carter administration by the weekend.
Claiming the company could make a case for a billion dollars in tax-credit aid, Iacocca said it did not appear tax aid was politically feasible. Treasury Secretary G. William Miller has opposed strongly any tax aid for Chrysler.
Iacocca, who met with Miller Sept. 7, said the feedback he has been receiving in Washington indicates loan guarantees are the only possible way Chrysler can get the money it needs to carry it through the next 18 months.
He said the company's losses have been at least doubling each quarter this year and will be substantially more than $700 million for the year. Chrysler reported a $50 million loss the first quarter and a $207 million loss in the second quarter. Iacocca predicted a third-quarter loss of approximately $410 million.
Although Iacocca said today that the Chrysler request could run as high as 1.2 billion, the administration has indicated it may only be willing to go as high as $750 million in bail out aid.
Iacocca blamed the federal government for much of Chrysler's financial troubles. The lack of a federal energy policy, he charged, has almost ruined the automaker.
The government, Iacocca said, has caused at least half of Chrysler's troubles.He said the government is now rewarding "size and not efficiency" with its regulations on emissions and fuel efficiency.
Therefore, Iacocca said, "the Feds bailed us in and they can help bail us out.
Iacocca's attitude today seemed to reflect one of the problems Chrysler has been encountering during its recent congressional lobbying campaign for aid. The company has ruffled the feathers of more than one congressman for its refusal to come hat in hand for aid.
There are indications that Chrysler will not have easy going in Congress no matter what form the aid request eventually takes. But the Carter administration seems ready to push for loan guarantees to help out the company.
Labor Secretary Ray Marshall told a Washington news conference today "it is not in the national interest for Chrysler to go under . . . but I do not believe we ought to anticipate a permanent subsidy to keep them from going under." Marshall said he favors the loan guarantees provided the company's troubles appear to be only temporary.
Marshall said he was not intrigued by a United Auto Workers proposal to have the federal government become a part owner of the company.
Iacocca said today that Chrysler has been accused of building gas guzzlers when, in fact, 70 percent of its cars are compact models or smaller while only 50 percent of Ford cars and 70 percent of General Motors cars are intermediate size or larger.
Chrysler claims it already has cut $650 million in fixed costs by laying off 8,500 workers, freezing salaries for most workers and cutting executive salaries 10 percent. Iacocca said "not one cent" has been cut from the cost of future producer programs.
At today's news conference, Iacocca gave reporters a brief glimpse of the company's 1981, front-wheel-drive luxury car Chrysler hopes will prove its financial salvation. Pointing to the car, Iacocca said "that's where the profit is, and the company should earn $150 million with it. The family jewels are wrapped in that."
The 1981 models will be the first Chrysler cars over which Iacocca will have an influence.He was hired as president of Chrysler last year after being fired as president of Ford after a dispute with Henry Ford II.
The auto industry as a whole is expecting to sell 10.6 million cars in 1980, Chrysler officials said today. Chrysler's 1979 model sales are expected to total 1,143,375 cars.