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For Iacocca, the former top Ford executive signed on a year ago by Chrysler to save the day, the victory in Washington was just the beginning of the struggle. The engaging and voluble troubleshooter looked more relaxed than he had in months as he told TIME Detroit Bureau Chief Barrett Seaman: "Chrysler has to start a new inning. We've got to turn around a car company, get the quality in the cars and get them out on time." His first priority is what he calls a "confidence program." As soon as Carter signs the loan guarantee, Chrysler will blanket the country with television, newspaper and magazine ads flashing the word that the company has come back from the brink. Says Iacocca: "I've got to convince the public that we're in business to stay." Chrysler employees will be treated to pep talks videotaped by Iacocca and be given T shirts proclaiming WE CAN DO IT.
If he can get his cash, Iacocca hopes to save Chrysler by introducing next fall his so-called K cars: fuel-efficient, front-wheel drive compacts that will replace the company's Volare and Aspen models and compete with the similar and fast-selling X cars of General Motors. In addition, Iacocca plans to expand production of Chrysler's popular subcompact Omni and Horizon. Says he: "We're set up to build every small car we can. By 1981, 67% to 70% of our total cars will be small, front-wheel drive, compact and subcompact cars—far more than anybody else—getting 25 to 30 miles per gallon and up." But Iacocca also plans to field a big, new Imperial next year. Though he realizes that he will be criticized for building this kind of auto when demand is mounting for small cars, he argues that not only is there still a market for a luxury vehicle but that its potential for profits is enormous. He adds that the investment will be relatively modest because the new Imperial will be a modification of an existing Chrysler model. Says he: "Big deal. I did it with the Mark at Ford; it was a Thunderbird with a new wrapper. I took a Falcon and made it into a Mustang."
Iacocca's optimism is not universally shared. Market conditions could be worse next year than Iacocca anticipates, and the competition will be cutthroat. For example, though Chrysler plans to invest some $12.6 billion in new cars and trucks over the next five years, GM will be pouring $38 billion into new models, and Ford will be committing $20 billion. But Iacocca is philosophical about being the smallest of the Big Three. Says he: "That's the way it is. I've always said that we've got to play it smarter. I love to play poker with these big guys. But I go in with this little stack of chips and I look over at these guys with big stacks and it scares the hell out of me."
Before Iacocca plays poker with GM and Ford, he must sit down with an equally tough card shark, the U.A.W.'s Fraser, to renegotiate Chrysler's new contract with its workers. If they fail to find a wage formula that meets the requirements set by Congress, the federal guarantee package will fall apart, and Chrysler's very survival will again be in grave doubt. ∎