Chrysler's New Bosses

Ever since the resignation of Chrysler Corp. President William C. Newberg a year ago on conflict-of-interest charges (TIME, July 11, 1960 et seq.), the directors of the nation's third biggest automobile company have been knocking on corporate doors across the U.S. seeking a new president. Last week, in a move that caught Detroit by surprise, the Chrysler board called off its hunt for an outsider and turned inside to tap Administrative Vice President Lynn Alfred Townsend, 42.

Before settling on Townsend, Chrysler's president-hunters got turndowns from a bevy of top-ranking U.S. executives, including American Motors President George Romney, Chevrolet General Manager Edward Cole, Ford Vice Presidents James O. Wright and Irving Duffy, and, most recently, General Motors Vice President James E. Goodman. Most who said no were not fearful of Chrysler's long-term future, or dissatisfied with the offer (along with the customary six-figure salary, Chrysler's directors were offering three-year stock options that could be worth $1,500,000). What helped to scare them off was the determination of Chairman Lester Lum ("Tex") Colbert, 56, prime target of a vocal group of dissatisfied Chrysler stockholders, to stay on as Chrysler's chief executive officer until next year, when he hoped company finances would look better.

"Unwarranted Harassment." Last week, persuaded by his fellow directors to face up to the facts, Colbert abruptly resigned all other duties with Chrysler to become chairman of the company's small Canadian subsidiary. Said Colbert in his resignation statement: "Having been the undeserved target of a great deal of unwarranted harassment, any personal desires on my part to continue to head Chrysler should give way to considerations of what seems to be best for the company."

In a major change of direction for Chrysler, a five-man executive committee, composed of President Townsend and four directors from outside the ranks of Chrysler management, collectively took over the duties of Colbert's post as chief executive officer. Pittsburgh's personable, plain-spoken George H. Love, 63, who heads the new committee, agreed to resign as chairman of the M. A. Hanna Co. and as a member of the executive committee of National Steel Corp. (He will remain chairman of Pittsburgh's Consolidation Coal Co.) For Chrysler, this was clearly the beginning of the transition from one-man rule to the committee management system that works so smoothly at Ford and General Motors.

Cut to Fit. Even under committee rule, however, prime responsibility for Chrysler's operations will rest with Lynn Townsend, an assured, articulate man who divides his spare time between water skiing and reading history. (He prefers to read about ancient civilizations "because, after all, I'm living in this one.") Orphaned at 14, Townsend put himself through the University of Michigan washing dishes, and worked for ten years with Touche, Ross, Bailey & Smart, Chrysler's auditors. He got into the auto business formally four years ago, when he joined Chrysler as controller.

Townsend became administrative vice president last December, proved himself a man with a sharp pencil. He set about the payroll slashing that Tex Colbert, always loyal to his friends, could not bring himself to do. Townsend insists that Chrysler must recognize it now has only 11% of the auto market v. the 22% it had a decade ago, and must tailor its overhead accordingly. He has already lopped off 14,000 white-collar workers, plans to drop another 1,000 by year's end. With a $22 million loss in the first quarter. Chrysler seems almost certain to end up in red ink for 1961, but the company's balance sheet is improving, and 1961's second quarter showed a $6.2 million profit.

To boost Chrysler's sales, Townsend urgently needs to revive the morale and profits of Chrysler dealers. To do this, he has back of him highly efficient plants, modernized under Colbert, and--thanks in part to his own insistence on last-minute changes--a collection of handsomely styled 1962 cars.

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