The top executive suites at troubled Chrysler Corp. all became occupied by former Ford Motor Co. officers yesterday, as the company's directors completed one of the most thorough management shakeups in Detroit history.
As expected, Lee Iacocca was elected chairman and chief executive officer to succeed John Riccardo, who signaled the end of his 20-year association with Chrysler earlier this week.
But the auto company's board also selected several other former Ford Motor executives for top positions, effective immediately, in a step that came as a surprise even to long-time Chrysler officials.
Separately, informed sources in Washington said yesterday that a White House regulatory task force virtually has ruled out proposing any relaxation of federal auto standards for Chrysler, which the company has sought as one remedy to its growing financial crisis.
Former Ford Motor president Iacocca was hired personally by Riccardo, about a year ago, as Chrysler's president after Iacocca was fired by Ford Chairman Henry Ford II. At the time, Iacocca was scheduled to succeed Riccardo this December as chief executive.
Earlier this week, when Riccardo announced that he would seek early retirement because of ill health and the need for Chrysler to have a new management in place as it seeks federal government assistance, Iacocca was expected to succeed Riccardo and remain as president.
But, apparently with Iacocca's urging Chrysler's directors picked J. Paul Bergmoser as president, chief operating officer and a director. Bergmoser, 63, retired from Ford after 30 years in 1976. He was hired by Iacocca as a Chrysler consultant only last January.
In addition, a position of executive vice president for finance was reestablished and given to Gerald Greenwald, 44, who moved to Chrysler from Ford last May. Greenwald, also was elected to the auto company's board, from which Riccardo also retired.
The appointments of Bergmoser and Greenwald are regarded as especially significant, but not just because they are former colleagues of Iacocca at Ford Motor Co.
Bergmoser's career has been concentrated in purchasing operations and he was Ford vice president for purchasing before his retirement there. Greenwald, former head of Ford's subsidiary in Venezuela, has been Chrysler's controller.
Both men are expected to be particularly involved in cost-cutting operations, including crucial decisions on the possible sale of some Chrysler assets as the company struggles to stay afloat. Last week, Iacocca called Bergmoser the "best" purchasing executive in the auto industry.
Financial management is expected to be a key ingredient in Chrysler's strategy for surviving its current cash squeeze, until new models are expected to regain market share for the company in the early 1980s.
For the interim, Chrysler last week proposed $1.2 billion in federal government loan guarantees, a suggestion dismissed by Treasury Secretary G. William Miller. Company executives currently are working on a revised plan to submit to the Treasury, and congressional sources expect ultimately to approve a package of between $700 million and $800 million in loan guarantees.
Bergmoser will continue to supervise procurement and supply operations (the firm purchased $9.1 billion of goods and services last year) and will also be in charge of international, manufacturing, engineering, product development, sales and marketing operations.
Chrysler also named John Withrow Jr. as vice president for product planning and John Day as group vice president and controller.
Meanwhile, the decision by administration officials to oppose any waiver of federal safety and anti-pollution standards for Chrysler was reached after the conclusion that federal alws would have to be amended, sources stated.
According to these informants, the administration decided that Chrysler suffered no competitive disadvantage because of standards that apply to all auto manufacturers.