clock menu more-arrow no yes

Filed under:


Chrysler Corp. is scrambling to realign its top management and fill gaps created at a critical time by the resignation of Vice Chairman Gerald Greenwald and other executives.

Responding to the surprise resignation of Greenwald, heir apparent to Chairman Lee A. Iacocca, Chrysler named Robert S. Miller, its executive vice president and chief financial officer, as vice chairman.Greenwald, 54, quit the nation's No. 3 automaker to lead a $4.54 billion employee buyout of UAL Corp., parent of United Airlines.

Miller, 48, and Chrysler Motors President Robert Lutz had been considered likely successors to Greenwald. Lutz, 58, was given slightly expanded responsibilities.

Greenwald's resignation was the latest in a series of top-level depatures at Chrysler, which is struggling to halt the erosion of its market share and earnings in the face of a weak U.S. auto market and stiff competition from foreign automakers.

Michael Hammes, the company's international operations vice president, quit to head Black & Decker's tool division. Chrysler Treasurer Frederick Zuckerman said he would leave the automaker this summer to pursue other interests.

Also, 62-year-old Bennett Bidwell, chairman of Chrysler Motors, has cut his work load.

Iacocca had said he would leave more of the day-to-day operation to other executives. But his recent remarks that he may remain as chairman beyond 1991, combined with the rash of top-level departures, have increased speculation that he might increase his role in the company's operations.

The talent drain on Chrysler's upper level management began after a similar depletion started late last year when Chrysler adopted a $1.5 billion cost-cutting program to trim white-collar work force by about 2,500 people.

"The (stock) market probably views this as a further indication that the operating problems at Chrysler are really severe and probably increases the potential for Chrysler losing its independence in the future," auto analyst John Kirnan of Kidder, Peabody & Co., said Thursday.

Chrysler's U.S. market share for cars and light trucks fell to 12.4 percent at the end of April from 14.1 percent a year earlier.

The automaker's profit dropped by nearly 80 percent in the first quarter of this year, although analysts said the results would have been worse if not for a company austerity program.

Greenwald said the challenges of financing the UAL buyout - which would be the largest employee buyout of a U.S. company if it succeeds - were too good to ignore.

"Here I am having a second chance to go through a major industrial event in American history," Greenwald said.

Greenwald was a major player in Chrysler's winning of loans and federal loan guarantees to pull the company from the brink of bankruptcy in the late 1970s and early 1980s.