Chrysler Corp. Chairman Lee A. Iacocca told shareholders today that the company is doing all it can to repair the huge financial damage of the past 2 1/2 years and that its future now depends heavily on a decline in interest rates.
Iacocca repeated previous predictions that Chrysler would end the string of nine successive quarterly losses in the three months ending in June. "If we can get any kind of a break in interest rates, we have a good shot at reporting a profit when we announce second-quarter results," he said at the annual meeting here.
"The struggle for survival is behind us," Iacocca said. But he added: "We need a monetary policy that assures us a steady supply of money at a rate the country can afford. That is the absolute top priority."
Even if Chrysler can turn a profit for the second quarter, it will face a heavy cash drain in the third, when spending will soar as the new 1982 model line is introduced.
The cash situation will be "tight, but do-able" in the third quarter, said Chrysler Vice Chairman Gerald Greenwald, who was promoted to that position in April and is one of three former Ford Motor Co. officials who now run Chrysler. The others are Iacocca and Hal Sperlich, president of Chrysler's North American auto operations.
Earlier, Iacocca met with Chrysler dealers, backing their lobbying campaign for lower interest rates that they call "Operation Prime Cut."
The annual meeting was held in Wilmington to permit shareholders to visit Chrysler's Newark, Del., assembly plant, one of two plants that produce Chrysler's K-car front-wheel-drive compacts, the Plymouth Reliant and Dodge Aries. He praised the quality of the K cars, which probably have saved Chrysler, noting that so far there have been no recalls. He knocked on wood.
The 800 shareholders were told they face a long waiting period before they can hope to see a recovery in the value of their stock. "The odds are that for the next few years we will not be paying any dividends," Iacocca said.
And he acknowledged that Chrysler faces a tough new challenge from General Motor Co. in particular, which is introducing several competing lines of front-wheel-drive compacts this year. "I'm not here to announce that Chrysler is completely out of the woods," he said. "We are not."
Judging from the reception, Iacocca was not held personaly accountable for the company's continuing plight, at least not by those shareholders at the meeting. One said that his young son, who owns 50 shares of Chrysler stock, has Iacocca's picture on his bedroom wall across from one Pittsburgh Steelers quarterback Terry Bradshaw.
And there was only scattered applause for one shareholder who protested the decision by Chrysler's board in March to restore a part of Iacocca's 1980 salary. He had agreed to work for $1 a year, but the board's decision gave him $116,321 in salary for the final four months of 1980 -- his normal compensation minus the 10 percent pay cut that Chrysler's top officers accepted. Iacocca said he donated all of this money to a charitable fund supporting the treatment of diabetes.
Iacocca also received $500,000 from Chrysler last year as the final installment on a $1.5 million payment Chrysler promised to make when he switched over from Ford. This offset compensation that Iacocca forfeited when he left Ford.
Douglas A. Fraser, president of the United Auto Workers Union and a Chrysler board member, said he had voted against the "back pay" for Iacocca on principle, noting that his union had been unable to get an agreement on deferred compensation from Chrysler. UAW memebers have been picketing Chrysler headquarters outside Detroit recently to protest contingency plans to make up all, if not most, of the pay concessions made by company officers last year.