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Chrysler's management will have to yield some of its autonomy. A board, consisting of senior federal financial officials as well as the Secretaries of Labor and Transportation, will oversee the firm's operations in detail. Congress's general accounting office will have the right to audit the company's books.
By the time the two houses of Congress began debating the Chrysler bill last week, the threat of bankruptcy was intensifying at an alarming rate. Because of the current general slump in auto sales, down 21% last month, Chrysler has been running out of money faster than had been anticipated. The giant corporation could be broke by mid-January, a month ahead of its projections. To give Chrysler the time to raise the funds it needs, Congress had to act before the holiday break. In a rare emotional appeal to the House of Representatives, Speaker Tip O'Neill brought a hush to the chamber as he recalled the dark days of the Great Depression and warned that failure to save Chrysler would result in worker layoffs large enough to trigger a new depression. Said he: "We won't be able to dig ourselves out for the next ten years." In the Senate, Massachusetts Democrat Paul Tsongas described how his home town of Lowell, Mass., had been crushed by the decline of the textile industry and declared that he "did not want to do to Detroit what others have done to my city."
Even more effective than these appeals was the lobbying offensive launched by Chrysler, the U.A.W. and the Administration. Jimmy Carter got on the phone to urge key legislators to back the bill, as did Chrysler Chairman Lee Iacocca, who placed a series of calls from his corporate suite in Highland Park, Mich. Meanwhile, U.A.W. President Douglas Fraser (who is now also a Chrysler board member) cornered Senators in the chamber's ornate reception room. These pro-Chrysler forces stressed the argument that the collapse of the firm would be an economic disaster for the nation. This contention, however, is disputed by a number of experts. Under bankruptcy proceedings, for example, most of the plants could be kept running under a court-appointed trustee. And even if Chrysler were forced to liquidate, which is a worst-case situation, a number of its operations would presumably be bought and revitalized by other firms.
But in the end, economic issues seemed to count for less in the cloakrooms on Capitol Hill than a powerful political argument: Did legislators, in an election year, want to risk appearing unconcerned about Chrysler workers' jobs?