Resurgent Chrysler, with money in the bank, now faces hungry UAW
If Chrysler workers vote ''thumbs down'' on the tentative one-year contract between the United Automobile Workers (UAW) and the company, will Chrysler Corporation be ''back in the soup,'' despite a year of surprising gains?
Probably not, according to David Healy, a New York market analyst with Drexel , Burnham, Lambert Inc.
''My guess is they'll go back to the bargaining table for a few more cents an hour and changes in the absentee part of the contract,'' he asserts.
The hard-fought contract was rejected 2 to 1 by the Newark, Del., plant, a key Chrysler facility, as well as by workers in Twinsburg, Ohio, and three Detroit-area plants. Twinsburg workers snubbed the pact 2,315 to 316. A total of 91,000 workers nationwide are eligible to vote.
When negotiations opened in July, Chrysler unsalaried workers made $9.07 an hour - $2.60 an hour less than Ford workers and $2.69 less than UAW members at General Motors.
But even if the workers say no to the tentative contract, the UAW is not expected to shut Chrysler down completely. Rather, the union will probably hit one plant at a time.
''It'll be more of a harassment than anything else,'' predicts Mr. Healy, who adds: ''I think there's room for nudging the contract up slightly.''
Meanwhile, a year ago Chrysler Corporation had a hard time even meeting the payroll. Deep in debt, few people gave it a chance.
Today, by sharp contrast, the resurgent company, despite $2 billion in debts and the worst recession in 50 years, has $1 billionm in the bank, including cash and securities, the most in the history of the company. General Motors, Ford, and Chrysler lost $12.5 billion in the last 30 months.
Indeed, union leaders blame the negative contract vote on Chrysler chairman Lee A. Iacocca, who has continued to tout the carmaker's huge cash reserve while the workers can only look at three years of concessions to save the company from going over the cliff.
If Chrysler can get its union problems out of the way, its immediate future looks as bright as it's been in a long time.
Chrysler has a new line of cars for '83 and the strongest management team in years, including many former Ford employees.
Beyond 1983, Chrysler has a long line of new models on the way - a 2-seater sports car and combination station wagon-van for 1984, for example - and the commitment and means to bring them about.
For 1983 it is introducing the fourth phase of its K-car program, the longer-wheelbase E-series cars, the Chrysler E-Class, and the Dodge 600.
In December it will introduce an E-series New Yorker, flagship of the new full-size car line, plus a LeBaron ''woody'' convertible, with simulated wood siding, and the Dodge Shelby, a high-output version of the Charger 2.2.
Later in the model year, the company will unveil an executive sedan with a 124-inch wheelbase and a 131-inch-wheelbase limousine, both extended versions of the K-car. Whether Chrysler will have any success in competing with Cadillac and Lincoln is anyone's guess.
The No. 3 carmaker also wants to get back into the 4-wheel-drive, small-utility-vehicle market as its new-product plans continue to move ahead.
A large part of the credit for the company's ''back-off from the brink'' goes to dynamic and tough Lee Iacocca, former president of Ford Motor Company, and the widespread support of the work force, both blue collar and white. The workers now own about one-third of the corporation.
Also, without the federal government's bail-out loan-guarantee program and the cooperation of the Chrysler workers and suppliers, the company wouldn't have had a chance.
By 1985, it hopes to wipe out the $1.2 billion in loans.
Chrysler Corporation made a profit in the first two quarters this year, the first back-to-back black quarters the company has put together in almost six years. It is expected to report a third-quarter loss, however, although far less than the $149.3 million deficit it posted in the third quarter a year ago.
The operating profit is a little better than break-even, Mr. Iacocca said at the company's press introduction of its new cars in Houston two weeks ago.
''It's the fourth quarter I'm worried about,'' he sighs.