Chrysler's new line of 1981 front-wheel-drive cars, which carries the automaker's hopes for recovery, will not have to meet the more stringent 1981 emission control standards for carbon monoxide, the Environmental Protection Agency has ruled.
EPA administrator Douglas M. Costle concluded that enforcement of the 1981 monoxide standards on the new Chrysler line could make the cars more difficult to start and cause other operating problems, affecting consumer acceptance.
Because of Chrysler's "relatively unstable" financial condition, EPA was unwilling to impose the risk of "severe" adverse economic consequences" on the automaker, Costle said.
Chrysler, which received a $3.5 billion aid package late last year to stave off bankruptcy, is counting on the front-wheel-drive cars to improve sales in the new model year. The new models, code-named "K-cars" by Chrysler, will replace sedans and station wagons in the Dodge Aspen and Plymouth Volare lines.
The 1981 standard limits carbon monoxide emissions to 3.4 grams per mile. The four-cylinder engines used in the K-cars will be permitted to discharge 7 grams per mile, the current standard.
Primary control of carbon monoxide is achieved through catalytic converters in the muffler system, but modifications of carburetors, ignition systems and other equipment is necessary to achieve the standards. Chrysler's financial condition has limited its ability to make these technological changes, Costle concluded.
Costle's waiver, signed March 11, was disclosed this week by Chrysler in an amended statement to the Securities and Exchange Commission concerning debentures the company hopes to sell as a major part of its contribution to the bail-out plan.
In its statement, Chrysler reported its losses in 1980 could reach $650 million rather than its previous estimate of $500 million.
Costle is permitted by law to consider the public interest as well as public health in deciding appeals for exemptions from the air pollution control standards. That permitted him to take into account the impact of a Chrysler failure on the economy, EPA officials said.
Costle had granted exemptions from pollution standards last August to other 1981 Chrysler models, as well as several models built by American Motors Corp., Toyota Motor Co. of Japan, and two other foreign auto manufacturers.