Word: chrysler
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Dates: during 1970-1979
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...quick federal fix is right-and will be enough The Carter Administration decided last week that now was the time to come to the aid of the nation's most beleaguered major company. After weeks of rising pressure for a federal fix for the multiplying problems of Chrysler Corp., Treasury Secretary G. William Miller produced-and Jimmy Carter approved -a Government bailout. It was designed to prevent the nation's No. 3 automaker (1978 sales: $13.6 billion) from sliding into a bankruptcy that could have put many thousands out of work and sent a shudder through U.S. financial...
...Beamed Chrysler Chairman John Riccardo "We are extremely encouraged. This fits the bill...
...first public act at the Treasury, Miller spelled out the ideological ground rules of federal aid and warned other troubled companies against expecting similar help. Such assistance, he said, "is neither desirable nor appropriate, being contrary to the principle of free enterprise." But Chrysler was an unusual exception, he added, in which the Administration "recognizes that there is a public interest in sustaining [its] jobs and maintaining a strong and competitive national automotive industry...
There are strong arguments against giving Chrysler the cash. Opponents cite the British experience of never-ending subsidies to sick companies and its disastrous effect on the taxpayers. G.M. Chairman Thomas A. Murphy argues that federal aid insulates companies from the effects of competition in the marketplace, perpetuates inefficiency and creates unfairness. There is no precedent for what Chrysler wants. In 1971 Lockheed was rescued with a federal loan guarantee for $250 million of its private debt. But that cost the taxpayers nothing, and by the time the Lockheed loans were paid off in 1977, the Government made a profit...
Still, Congress seems to favor doing something for Chrysler, although $1 billion in tax refunds is distasteful to legislators who yearn to narrow the federal deficit. They may move instead for a loan guarantee. Senate Finance Committee Chairman Russell Long has pledged some aid for Chrysler. Says he: "It is better than letting the company fold. That would cost a lot of revenue and jobs." House Ways and Means Chairman Al Ullman is unenthusiastic but promises to expedite whatever bailout measures the Carter Administration proposes...