How Chrysler downsized the entire line in the 60s and lost

Chrysler's entry into the leading roles in the American auto industry happened after its successful acquisition of Dodge shares. This happened in 1928, and after all, the enterprise organized by Walter Percy was then only a few years old.


During the war, they had to get on the "army rails", but with the onset of peacetime, Chrysler Imperial returned to civilian technology. A little later, in the early 60s, European expansion began. By buying up controlling stakes in transport companies from different countries (Spain, Great Britain, France), overseas businessmen have prepared excellent ground. After some time, a European branch of Chrysler appeared.


But in all this successful history there was also a fly in the ointment. We will remember her today. The case took place around the same period and is associated with an unsuccessful decision by the new leader and the loss of a leading position among American automotive manufacturers.

Crisis and new president

In 1957, Chrysler Corporation brought an incredible profit of $120 million. The main merit in this belonged to the lead designer of the enterprise Virgil Exner. After all, it was his famous Forward Look (“look forward”) that was used by almost all models of the company. If we add to this a torsion bar suspension and an automatic transmission from talented Chrysler engineers, then it is not surprising that so many people wanted to become the owner of a car of this particular brand.

Surprisingly, in that year, the build quality, on the contrary, caused a lot of criticism. Therefore, the whole year of 1958 was held under the slogan: quality and once again quality. What was the result? The company received ... 34 million loss. And all because of the recession and the imminent crisis. The next year also brought losses, but not on such a huge scale. The situation seemed to be getting better, but a change in leadership was overdue in the corporation.



In less than two months, he became famous for his decision to downsize his entire line of cars (which immediately threw the company to the margins of the American auto industry) and for his "nepotism", when lucrative corporate contracts were distributed within his family clan. In general, a typical mafia, so corruption is not only now, and not only here.


So, the story begins shortly before the appointment of Newberg to a leadership position. In those days, among successful businessmen from the automotive industry, it became fashionable to hold parties or corporate parties. They were attended by colleagues and competitors. If conversations were held with the former, useful contacts were established and some issues were resolved, then they tried to find out confidential information from the latter. Something similar happened at this Detroit party.

Seemingly carefree strolling, the future head of Chrysler overheard a conversation between the general manager of Chevrolet and his subordinates. They were talking about a new compact 1962 model. Having drawn the wrong conclusions, the impromptu spy decided that we were talking about reducing the entire line of a competing company.

That is why, having stood at the helm, the businessman made a fateful, but erroneous decision. Indeed, against the background of the fact that several leading American manufacturers, one after another, presented their compact models at once, the conclusion seemed quite obvious. Plus to this - Rambler, which headed the list of sales of AMC and was in fourth place among all models of the continent.

Yes, and the popularity of European and Japanese cars of small and middle class grew in America year by year. It's just that many residents of the country no longer wanted to drive bulky American cars, preferring nimble and compact vehicles. This process was further intensified after the 1973 oil crisis.


In general, William Newberg decided that he felt the promising market conditions, but everything turned out to be a little different. Firstly, Chevrolet just wanted to have its representative in the middle class, while not completely abandoning the full size. So, based on only one moment and without examining the issue in depth, the newly minted leader made a life-changing decision for the company.

Changing horses at the crossing

By decision from above, all production shops were instructed to reduce the size of all executive class cars at minimal cost. And all this had to be carried out urgently until 1962. But all the documentation and developments were completely ready, and Exner created a design for them corresponding to the full-size classification. The engineering department was the first to react, which reported on changes in the parameters of the new line:

✅ 20 cm shorter
✅ 10 cm narrower
✅ the height was kept the same

Such news simply shocked the leading designer of the company. After all, the fruits of his two years of hard work flew into hell. The almost finished body of the new models was simply not needed due to serious changes in their parameters. And that is not all. The upcoming savings made it impossible to use several promising developments at once:

✅ curved side glazing
✅ huge panoramic rear windows on the bodies
✅ elegant rear bumpers with chrome decor

Virgil Exner bluntly stated that in the requested short time frame, his team could only produce something disproportionate, unbalanced and ugly. Moreover, he clearly indicated that the result would be a complete failure in the market, loss of positions and a difficult financial situation. Nobody listened to the artist, because the company's management at that moment was doing more interesting things. A financial corruption scandal was brewing in the corporation.


The audit showed that the new leader, together with his wife, own a controlling stake in three Chrysler subcontractor companies at once. It is clear that this could not be a mere accident, a real mafia structure was ripening in the shadows. This scheme allowed the family business to generate half a million dollars in revenue the previous year. But the matter was not limited to the Newbergs. Other members of the board of directors were also involved in the scandal.

The most radical among the main shareholders of the company even voiced a proposal to declare it bankrupt and introduce external management. Things did not come to this, but the perpetrators were punished immediately. One of the accomplices - Colbert was sent to Canadian exile. But Newberg himself quickly lost his chair, after sitting in it for only two months and three days.

But what about the prophecy of a talented designer? It has been fully fulfilled. The resulting models looked bizarre and underdeveloped, which is not surprising given the tight deadlines for getting them ready for production. Moreover, the corruption-financial scandal did not allow for a full-fledged advertising campaign. Future customers could be explained that smaller models have become lighter, and therefore more economical and faster.


The result was a sharp decline in sales. It amounted to only 1961 thousand units in 340 (while competitors from Chevrolet had 1,4 million). The following year brought an 11 million loss, and this despite the policy of severe savings introduced by the new head of the company, Townsend. The crisis continued and now all the bumps fell on the designer: Ekner was also fired from the company. Ironically, it was his earlier line design for the next season that allowed Chrysler to slightly improve its position in 1963.