Bad Day for Tex

"The year was an unusual one." With this understatement, Chrysler President Lester Lum ("Tex") Colbert invited stockholders to Chrysler's annual meeting last week. Despite the majority of proxies safely in his pocket, Colbert knew that he was in for a rough day from a hard core of dissident minority stockholders. Chrysler's first quarter shipments in 1961 were down 57% from last year, with no great upturn forecast for the second quarter. To cut costs, nearly 7,000 salaried workers had been fired. "If we had been able to combine our progress in cost reduction with a comparable improvement in sales." sighed Colbert, "we would have a highly satisfactory report for you."

Up popped a stockholder to read a statement from ex-Chrysler Executive William C. Newberg, who was fired last summer after only 64 days in office as president because of his personal financial interest in Chrysler suppliers. "It is my conviction," said Newberg, "that we cannot ever again have a strong Chrysler under the czarist rule of Mr. Colbert." Under Colbert, said Newberg, Chrysler's share of the U.S. market had dropped from 21.5% in 1949 to 12.5% in 1959; in the past three years, the company lost $7,000,000 on sales of nearly $8 billion, lost another $20 million in the first quarter of this year. Newberg wrote that Chrysler had no policy "except that of frequent and unpredictable change that throws off balance not Chrysler's competitors, but Chrysler itself." Replied Colbert icily: "It is unfortunate that the author of this statement did not see fit to be here."

But Colbert won little sympathy from the audience. Newberg's selection as president "doesn't reflect very well on your judgment, sir," said a stockholder from Chicago. "Don't you think it's time to sweep clean?" To a rumble of boos, Colbert answered: "Mr. Newberg concealed his interests."

The Investigators. How much had it cost to investigate Chrysler officers after the Newberg scandal, inquired a stockholder, and then to hire Tom Dewey's law firm to investigate the investigation?

Colbert said that he did not know. Came a voice from the audience: "Don't you know anything about your company?" A flustered Colbert looked to one of his aides for help, finally announced that the total investigating cost was $210,000.

Next stockholder on his feet was former Chrysler Executive Karl Horvath, who left the company in 1959. He accused Colbert of providing excuses every year to explain Chrysler's poor showing. Last year, said Horvath, the glass and steel strikes were blamed, this year the profit squeeze and the "campaign of vilification" against management. "Who are you trying to fool, Mr. Colbert?" asked Horvath. "You've got your head in the sand and your flanks exposed to attack. You do all your planning with one hand on the panic button and the other in the till." Countered Colbert: "Chrysler has no problem that increased sales wouldn't cure."

"Do you feel that you have a right to remain as president of this company?" asked another stockholder. Colbert winced. "The president of this company is named by the board of directors." A show of loyalty came from a middle-aged woman shareholder who pledged Chrysler her moral support "for continued--Oh, I guess I shouldn't say 'continued'--success."

New President? But the heaviest fire came from Detroit Lawyer Solomon Archie Dann, who has been attacking Chrysler management for nearly three years and who is now being sued for $30 million by Chrysler on libel charges. He requested that he be allowed to speak last. For 70 minutes. Dann raked Chrysler management, proposed that Chrysler corruption be investigated by Bishop Fulton Sheen, Bishop James Pike, Rabbi Louis Finkelstein and Theologian Reinhold Niebuhr. "These people don't want to hear all this," Colbert said. "Let's get on." Shouted voices from the audience: "Shut up, Colbert. Let him talk."

"Does that conclude your remarks?" Colbert finally wearily asked.

"That should conclude you," said Dann.

But the meeting did not reflect the mood of the majority of stockholders. With full knowledge of the Newberg and other troubles, they had gjven 7,000,000 proxies to management. Thus, by an overwhelming majority, it voted down all censure proposals. Nevertheless, the growing opposition has not passed unnoticed. After the four-hour meeting, Tex Colbert, who had taken over the presidency after Newberg left, told reporters that an executive committee of board members was on the lookout for a new president. He would probably stay on as chairman.

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