Chrysler Corp. Chairman Lee A. Iacocca threw an elaborate product party here today in an attempt to convince Wall Street that his company, once near bankruptcy, has returned to prosperity road.
The day-long song and dance for bankers and securities analysts seemed to achieve Iacocca's objective, despite his announcement that Chrysler may have to report an operating loss for 1982.
"This show is a confidence-builder," said Ann Knight, an analyst for Smith Barney, Harris Upham & Co. "Eighteen months ago, I would have said that they were in a lot of trouble. But I'm impressed with what they've done since then."
That was the kind of talk Iacocca wanted to hear as he unveiled the Dodge Daytona and Chrysler Laser, the first American sports cars to feature front wheel drive and a turbocharged engine. The modern-day "muscle cars," designed to deliver high performance and fuel efficiency, will be introduced in the 1984-model year which begins next fall.
"This is our response to our skeptics who continue to ask: 'How will you compete with the big boys when they hit you with new products?' " Iacocca said. "We're here to show them that we're for real."
Also for real, however, is the projected operating loss for 1982, the product of a "lousy market" aggravated by a five-week strike last fall against Chrysler's Canadian operations, Iacocca said. Chrysler Vice Chairman Gerold Greenwald said the strike cost the company about $100 million because it affected Chrysler's van and full-size, rear-wheel-drive New Yorker passenger car operations in Windsor.
"We already were in short supply in those units when the strike started," said Greenwald, adding that the walkout wiped out about 32,000 sales. That means Chrysler probably will report a fourth-quarter loss when final 1982 figures are released next month, Greenwald and Iacocca said.
Settling its contract with the United Auto Workers union last year cost Chrysler an estimated $125 million, an expensive settlement for a company recovering from serious financial wounds, Greenwald conceeded. But he said the expense was preferable to an even longer Canadian strike that could have led to a walkout by the company's U.S. workers.
"We'll pay for this settlement with future reductions in operating costs, not with price increases or with money from our product development programs," Greenwald said. The company has effectively frozen prices on its 1983 models at 1982 levels and is investing $6.6 billion in new models to be introduced by 1987.
Although it lost money making cars in 1982, Chrysler expects to report an overall profit for 1982 because of its sale last year of its profitable defense unit to General Dynamics Corp. The profit earned by selling the defense operations would be the company's first in five years.
Today's showing seemed to indicate that Chrysler is moving away from its basic-transportation, blue-collar image. There were the usual economy models, such as the Omni and Horizon; but today's emphasis was on high style, the market niche where the company gained its greatest success last year.