Detroit's Uphill Battle

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models as "the American way to beat the pump" will be Chairman Lee A. Iacocca. With a savvy and pound-on-the-fender style learned during 34 years in the auto business, he hopes to sell every one of the 600,000 K-cars that the company can produce this model year. So far, the public's response is good. Even before the cars have moved into dealer showrooms, Chrysler has sold 45,000 to fleet buyers like Xerox and AT&T and another 45,000 to dealers and individuals.

Though the K-cars are expected to support 50% of Chrysler's total sales this year, the firm has a few other cars in its garage. The flamboyantly plush Imperial, which has not been sold for five years, will be reintroduced. It will carry a $19,500 price tag and be promoted by Frank Sinatra. The rest of the company's product line is less impressive. Its older big cars, such as the Chrysler Cordoba and Dodge Mirada, look like forgotten orphans on the market. The small fuel-efficient Dodge Omni and Plymouth Horizon are now three years old; they face stiff competition from both Japanese imports and new American cars like the Ford Escort.

Iacocca brashly predicts that Chrysler will show a profit in the fourth quarter, but the company is still likely to lose more than $1 billion this year. Concludes the Chrysler Corp. Loan Guarantee Board that acts as a watchdog on the company: "The judgment [on Chrysler's viability] is now a more marginal one."

If Chrysler can survive for another twelve months, its prospects look somewhat brighter. Waiting on the test tracks are several new cars. Flouting industry tradition, Chrysler has already been showing off its new models for the next three years. Next fall a luxury version of the K-car will be introduced. In 1983 new "stretch K" mid-size cars will replace the moribund Chrysler LeBaron and Dodge Diplomat line. Also in the planning stages are a mini-van and an Italian designed sports car.

FORD. Delays in down-sizing its cars and a cash bind have made Ford in many ways an even sicker company than Chrysler. Ford's big models are selling poorly, and it lags behind both Chrysler and GM in the production of small, front-wheel-drive cars. Says Auto Analyst Maryann Keller of Paine Webber Mitchell Hutchins: "Caught between GM, with all its money, and Chrysler, with a federal sugar daddy, Ford has to husband its limited resources."

Ford's new offering this year, in addition to the Escort and Lynx, is a redesigned Ford Granada. The car, which will be marketed also as a Mercury Cougar, is 500 lbs. lighter than the old Granada and Mercury Monarch. But, like other standard Ford products, it has a "big car" look, which could hurt in a market that is demanding small autos.

GENERAL MOTORS. "GM looks so good that by 1985, it will end up with a higher percentage of the market than it has now," says Auto Specialist James R. McElroy of the U.S. International Trade Commission. Indeed, last week GM announced that it expects sales to pick up and that it will recall 18,700 hourly workers. Despite the Japanese auto invasion, GM has increased its share of the U.S. market from 42% in 1974 to 45% this year.

In this kind of car market, however, even GM has troubles. Its profits as a percentage of sales have slumped from 10.3% at their peak in 1965 to 4.4% last year. The firm's