Chrysler Ups the Ante

Amidst the usual glitter, most of Detroit's 1969 model cars have already been unveiled. Now the price tags are coming along. The first to present its new cars, Chrysler Corp., last week was also the first to present the bill that goes with them. In its fourth hike in three years, the company announced that, on the average, its 1969 cars will cost $89 more.

The White House's Arthur Okun promptly called the increase "manifestly excessive" and "a severe setback to the cause of price stability." He said: "We urgently request the other automobile manufacturers to head off this dangerous inflationary threat." President Johnson added his own warning: "If this price increase prevails throughout the industry, it will take three-quarters of a billion dollars out of the pockets of American families."

Washington can do little more than wag a finger. Earlier this year, President Johnson succeeded in rolling back Bethlehem Steel Corp.'s price boosts of almost 5% with threats of diverting Government steel orders. The Administration has no such leverage over the car industry. Instead, it must count on the keen competition among automakers themselves to do the job of keeping prices down.

Fall into Line. In the past two years, Chrysler announced price tags for new models, then scaled them down when the industry pacesetter, General Motors, announced lower price hikes. Both G.M. and Ford are planning to post their own new lists this week, and inflation watchdogs in Washington expect increases of about one-third of Chrysler's. They hope that such competition will force the No. 3 carmaker to fall into line once again. To help matters along, Okun and other top Administration people huddled last week with executives of both General Motors and Ford, including G.M. Chairman James Roche and Henry Ford II.

If Chrysler keeps the present list, dealers' prices on 137 models will go up from $38 on certain Dodge Darts to $173 on the Chrysler Town & Country station wagon. Plymouth's bestselling Fury III will be priced at $3,126 (up $109), the Plymouth station wagon with V-8 engine at $3,292 (up $139), the popular Dodge Charger at $3,125 (up $85), the Road Runner at $2,974 (up $78). On the other hand, the price of the slow-selling Barracuda fastback will be cut by $71.

Optional equipment will cost an average of 3% more, which will add at least another $10 to the price of 1969 models. Automatic transmission, installed on 92% of all Chrysler-made cars sold last year, for example, is listed at $223.20 instead of $216.85, and radios, another favorite option, will cost a couple of dollars more.

In addition, Chrysler hopes to save money by cutting its two-year or 24,000-mile general warranty to one year or 12,000 miles and restricting it to the original owner instead of the first two. The company will retain the five-year or 50,000-mile "power train" warranty, which it devised in 1963 to cover defects in such things as the engine, transmission and differential.

Greatest Stake. Chrysler cites increases in the cost of materials and labor as the reason for its price rises. But the President's Council of Economic Advisers insists that material costs rose by only 2 1/2% to 3%, and labor costs by 5% to 10%. These two rises together, the council figures, should be reflected in a $30 to $40 increase in the price of new cars, not an $89 one.

Besides, the car manufacturers may be in a position to absorb some of the added costs. Chrysler, with first-half profits running double what they were last year, expects to top 1967's fat $200 million profits on $6.2 billion in sales. General Motors' earnings rose to $960 million for the first six months of this year, compared to last year's first-half record of $912 million. Car sales are currently running at an annual rate of 10 million, and all Big Three carmakers are close to equaling the previous records set in 1965.

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