The Battle at Chrysler

Hardly had Chrysler President Lester Lum ("Tex") Colbert gaveled the annual meeting to order last week than Detroit Lawyer Sol A. Dann, owner of 5,100 Chrysler shares and a self-styled management "gadfly," started a harangue that lasted better than half of the 2 1/2-hour meeting.

To hear Dann--who has turned in similar performances at Studebaker-Packard and American Motors--tell it, Chrysler's directors were guilty of "nepotism, favoritism, payola, reckless disregard for the rights of shareholders, bribery, misconduct, perpetuation of themselves in office, creating a Pearl Harbor that would lead Chrysler to the same fate as Packard."

Colbert, at one point: "Are you finished, Mr. Dann?"

Dann, refusing to yield the floor: "No, but I wish some of the directors were [loud laughter]. Oh, I wish I had an isolation booth for you. I'd ask some $64,000 questions, and you wouldn't get the answers beforehand, either."

The attack blunted what Chrysler's management intended as a moderately optimistic report on the company's affairs. After losing $5,400,000 in 1959 and $33.8 million in 1958, said Colbert, "in the first quarter of 1960 we are definitely in the black." The company got off to a slow start on the 1960-model run. had run into heavy expenses in buying premium steel during last fall's strike, spent millions tooling up to produce the Valiant compact and to convert body shops to the new unibody construction. But now sales are climbing, reported Colbert, and all divisions, even high-priced Chrysler Imperial, are operating at a profit. Chrysler's share of the market: 16.1% in March v. 14.4% in January.

Valiant, after starting later and well behind, is beginning to roll; last week's production of 7,000 units edged Chevrolet's Corvair out of third place behind Ford's Falcon and American Motors' Rambler. This fall, announced Colbert, Chrysler will market another compact, the Lancer, as a somewhat larger stablemate for the Valiant. It will have a 30DEG-inclined, six-cylinder engine turning up 101 h.p., and a price tag just a bit more than the Valiant's factory list price of $1,900.

The meeting was probably the last that Tex Colbert, 54, would preside over as president and chief executive. Chrysler is about ready to change its top management, move Colbert up to board chairman, and name Executive Vice President William C. Newberg, 49, as boss. The shift has been in the works for months, and is not the result of last week's criticism at the annual meeting. Newberg is the man who succeeded Colbert at Dodge in 1951. has been groomed for the presidency for two years. And after ten years of fighting Chrysler's battles. Tex Colbert himself thinks it is time to turn over the headaches to someone else.

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