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Floors & Figures. Within two months after Townsend's appointment, says George Love, Chrysler's directors knew that "more by fortune than deliberation" they had hit upon exactly the man needed. Born in the automaking town of Flint, Mich., strapping (6 ft. 2 in., 195 Ibs.) Lynn Townsend spent most of his youth in Los Angeles, where his father had an auto repair shop. Lynn's mother, a gifted teacher, pushed him so fast with home tutoring that he started school in the second grade. As soon as he mastered arithmetic, his father put him to work helping with the repair-shop books.
Orphaned at 14, Lynn headed back to the Midwest to live with an uncle. He put himself through the University of Michigan by peeling potatoes, scrubbing floors and working in a local accounting office. He was also a top student. Says Economics Professor William Paton (who also taught G.M. Chairman Frederic G. Donner): "I've never had a student who had a greater flair for accounting and financial analysis than Lynn Townsend."
After graduation (class of '41), Townsend took his flair for figures into a Detroit accounting office, soon found himself auditing Chrysler for the firm, of Touche, Ross, Bailey & Smart. He became so knowledgeable on Chrysler's finances that in 1957 Tex Colbert brought him into the company as controller. Assigned to revitalize Chrysler's overseas operations, Townsend rapidly expanded them—among other things, he persuaded Chrysler to buy a profitable 25% interest in France's Simca—and launched a program that has boosted Chrysler's share of U.S. auto and truck exports from 14^% to 20%. He was made a Chrysler director at 39, administrative vice president at 41.
Down to Size. Unlike other Chrysler executives, who continued to spend as though the company still held a quarter of the auto market, Townsend with cold-eyed realism recognized that Chrysler must tailor its spending to its reduced sales. Even before he became president, he began a series of sweeping dismissals that eventually cut 7,000 white-collar workers from Chrysler's payroll. Once installed in the presidency, he closed outmoded plants, shut down one office building, and sold off Chrysler's executive planes.
All told, Townsend took some $100 million a year off Chrysler's production and operating costs. The experience was a traumatic one ("Nobody," says a Chrysler executive, "likes to be told that he has to get rid of half his department"). It was also dramatically successful. In 1959. Chrysler lost $5,000,000 on $2.6 billion in sales. In 1961, having reduced its break-even point, Chrysler earned $11 million on smaller sales of only $2.13 billion.