An acticle Friday on Chryler Corp. earnings erroneously reported productivity improvements and the number of Chrysler imports. Chrysler now produces 20 cars per worker per year, versus 10 cars per worker four years ago -- a 100 percent increase in productivity. Chrysler also said it would import an additional 100,000 cars annually from Japan if import quotas are lifted.
Chrysler Corp. yesterday reported 1984 profits of $2.4 billion -- the highest annual earnings in its 60-year history.
Added to the year-end earnings of General Motors and Ford, the nation's Big Three car companies last year made $9.8 billion, a 58 percent increase over their combined earnings of $6.2 billion in 1983.
Chrysler's performance last year translates to per-share earnings of $18.88, a 226 percent increase over earnings per common share of $5.79 in the previous year.
The earnings reports have prompted criticism that the Big Three's record profits are ill-gotten gains from four years' of quotas limiting the shipment of Japanese cars to the United States.
"This is real money, but it's not real economics," said James A. Mateyka, automotive analyst with New York-based Booz-Allen & Hamilton Inc. "This is clearly a situation where somebody is paying for destroying the balance of supply and demand in America, and that somebody is the consumer."
The analyst said that the quotas are giving the Big Three an "economic umbrella" to recoup their tremendous losses from 1979 through 1982. Chrysler, General Motors Corp. and Ford Motor Co. collectively dropped $7.29 billion during that period.
Chrysler Chairman Lee A. Iacocca rebutted the critics in a televised news conference broadcast from Detroit to 33 cities, including the District of Columbia.
The critics "don't know arithemetic," Iacocca said. He said they are ignoring savings Chrysler made by increasing its productivity by 50 percent over the last four years. The company uses 10 workers per car today, versus 20 per car in 1980, Iacocca said.
Chrysler, whose product lineup includes mostly small cars, is competing well and fairly against the Japanese, who mostly rely on small cars sales in this country, Iacocca said.
The current quotas expire March 31. They officially are supposed to hold the shipment of Japanese passenger cars to this country to 1.85 million cars annually. But the Japanese actually sold 1.96 million cars in this country last year, largely because of imports brought in through third-party territories such as Puerto Rico, according to figures compiled by the U.S. International Trade Commission.
Both Iacocca and Gerald Greenwald, Chrysler executive vice president for finance, repeated their threat to start building or buying small cars from overseas if the quotas are lifted next month.
The reason is the huge production-cost advantage -- put between $1,500 to $2,000 per car by industry analysts -- that the Japanese have over their U.S. rivals.
"We believe that the Japanese will be able to ship 650,000 more cars into this country in the first year that quotas are lifted," Greenwald said in an interview here. He said that increased imports at that level would add $5 billion annually to the current $36.8 billion trade deficit with Japan and would wipe out several hundred thousand domestic auto jobs.
"We're not going to just sit here and wait. . . . The real open question for us is where we're going to invest the $10.5 billion" that Chrysler has set aside for new product and plant development over the next five years.
All of the Big Three auto makers have either plans or programs in place to buy or build less expensive, high-quality cars from Japan. GM, which opposes the quotas, wants to bring in up to 400,000 cars annually from its Japanese partners Isuzu and Suzuki, and from its Korean ally, Daewoo Motor Co.
Chrysler now imports 87,500 passenger cars from Mitsubishi of Japan. Greenwald said yesterday that Chrysler "would not hesitate" to increase that number by about 200,000 cars a year if quotas are lifted.
Chrysler officials yesterday gave "valentines" to workers and customers -- partly in an attempt to offset public reaction to their profits report, and partly to say "Thank you, America" to those people who helped to keep the company running during the recent bad years.
The company awarded each of its 100,000 nonbonus employes a total of $1,000 -- $500 in a direct cash payment, and a $500 certificate to put toward the purchase of a new Chrysler car or truck. (Company officials conceded that those employes would have collected an average of $2,300 in 1983 and $4,700 last year had they agreed to a profit-sharing plan in their soon-to-expire 1982 contract.)
By June 6, an estimated 4.4 million customers who purchased Chrysler cars and trucks between 1979 and 1984 will receive a $500 certificate to be applied toward the purchase of a new Chrysler car or truck made in North America, Iacocca said.