Announcing the birth of "The New Chrysler Corporation," company chairman Lee Iacocca today began to sketch out recovery plans for the nation's third largest automaker in the wake of yesterday's congressional approval of $3.5 billion in federal loan guarantees.
An exuberant Iacocca, puffing confidently on a Havana cigar, told a roomful of reporters that "The Chrysler Corporation is here to stay." He repeated earlier statements that the company -- which will lose $1,047 billion this year -- will be operating in the black a year from now.
Asked if he would appeal again to the government if Chrysler found it difficult to raise the necessary funding under the congressional plan, Iacocca said emphatically, "No, never . . . never."
Meanwhile, Iacocca implored customers to "come in . . . and buy our cars." He said that during the past few weeks, partially because of public doubt over passage of the congressional bailout, the company has stockpiled thousands of cars, including 90-to 100-day supplies of the popular, gas-thrifty Dodge Onni and Colt and Plymouth Horizon and Champ.
The congressional bailout offers the troubled automobile $1.5 billion in federally guaranteed loans, provided that the company comes up with $2 billion in unguaranteed funds or concessions from sources with a stake in Chrysler's survival -- stockholders, employes, suppliers and dealers.
Iacocca said a congressional requirement that the 110,000 Chrysler-employed United Auto Workers union members give up $462.5 million of an estimated $1.3 billion in raises over the next three years would be "difficult" for those workers. But, he added, he would not call their loss a "disproportionate share" of the overall sacrifice.
Union officials have scheduled a Jan. 2 meeting in Detroit to begin the three-year contract they signed with Chrysler in early 1979. Although several have expressed unhappiness with the congressional mandate most say they have little choice, but to accept it.
Meanwhile, Chrylsler's 25,000 non-union employes will be obliged to give up about $125 million in pay raises previously budgeted for the next three years. Still, Iacocca said he was confident there would not be much of a "brain drain" -- loss of key skilled and management personnel to other higher-paying auto companies.
"There won't be many bonuses in the whole industry next year," he said, pointing to a bleak outlook for all domestic car makers in 1980.
He said the company is now negotiating the sale of its 15 percent interest in the French automaker Peugeot. When asked how much Chrysler's Peugeot stock might be worth, Iacocca said, "Oh, a couple of hundred million, give or take a hundred million."
Iacocca said he also had positive indications from the state of Michigan and the city of Detroit that they would be forthcoming with financial aid of some sort. Michigan appears nearly ready to approve a $160 million loan package, for which Chrysler will put up its Highland Park assembly plant as collateral.
The company failed to get from Congress a $500 million interim "bridge" loan that would have helped it finance operations until the large bailout package comes together.
But Iacocca downplayed this, saying it now appeared that Chrysler's interim needs were only about half of what had been forecast for January. He said both he and Treasury Secretary G. William Miller were confident the company could put together its own interim financing with the help of some creditors now that the full package was in place.
He said, for example, that suppliers would probably agree to some slippage in the $800 million owed them alone for January transactions. That figure represents a significant portion of total expected January disbursements of about $1.1 billion, he said.
But despite the predictions of a rosy future for Chrysler, Iacocca said his company and the rest of the industry face a very tough year competitively.
Iacocca said Chrysler's revised forecasts are that total 1980 auto sales in the United States would be about 9.25 million units -- far less than the 10.5 million sales that had been foreseen only a few weeks ago.
To make matters worse, Iacocca said, "the imports are having a field day." He said that, based on sales figures for the past 60 days, foreign car makers could sell as many as a record 2.5 million units out of next year's total.
Finally, asked if he would be replacing former major league baseball catcher Joe Garagiola as the company's advertising spokesman, Iacocca -- with a clear reference to his successful management of the congressional bailout effort -- said, "No, I've pitched most of my life."