Word: gm
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Dates: during 1970-1979
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...cars, vans and recreational vehicles. Since the gas crisis started, sales of these relics have, in lacocca's words, "been dropping like a rock." In this year's second quarter, unit sales were down 28% at Chrysler, compared with 27% at Ford and 15% at General Motors. GM and Ford, being bigger, are better able to withstand downturn. Also, they normally manufacture cars only after dealers order them; alone among the Big Three, Chrysler until recently produced autos essentially on speculation and then tried to market them to dealers. Because its dealers' lots are overflowing with slow...
...roots of this crisis are old and deep. In the 1960s, under Chairman Lynn Townsend, Chrysler glanced jealously at the worldwide power of both GM and Ford and tried to emulate them by expanding rapidly at home and abroad. The forced growth was ill-timed, haphazard and too fast. Chrysler entered the 1970s lacking the financial resources to weather three recessions, two oil crises and an enormous wave of environment, safety and fuel-economy regulations...
When Riccardo took over in 1975, the public was demanding smaller, more fuel-efficient cars, but Chrysler, unlike GM and Ford, lacked the money to retool and redesign quickly. With smaller sales than the other two automakers, Chrysler had to spend nearly twice as much per vehicle to meet Government rules. Pressed for cash, the company had to slash its budget for plant modernization...
...auto firms were caught off guard by the sudden buyer switch to smaller cars. Of General Motors' new X car line, President Elliot Estes notes: "We guessed in favor of the six-cylinder engines. But right now sales are running 60 to 40 in favor of the fours." GM is getting no help from its big cars either. Sales of the standard Chevrolet are off 20% since January; Buick Le Sabres are limping almost 29% behind 1978's pace, and purchases of the Oldsmobile 98 are down...
...Though GM Chairman Thomas A. Murphy maintains that the automakers will sell 11.5 million cars this year, other industry officials say they would not be surprised by sales of 10.5 million...