Chrysler Corp. disrupted by power struggle Automaker split over Iacocca's successor

March 14, 1992|By Donald Woutat | Donald Woutat,Los Angeles Times

DETROIT -- It seemed inevitable that Lee A. Iacocca would not leave Chrysler Corp. in an orderly fashion, and now evidence of a boardroom quarrel over who will succeed him as chief executive is spilling awkwardly into the open.

Members of Chrysler's board are reportedly to meet in New York this weekend in hopes of hastening the selection of a successor. The 68-year-old Mr. Iacocca has said that he will retire as chief executive at the end of this year.

Speculation has centered on various combinations of the three top posts at the company: chairman, chief executive and president. It is unclear whether Mr. Iacocca will remain as chairman.

People close to Chrysler say that Mr. Iacocca is attempting to install outsiders atop the automaker and cut out his current president, Robert A. Lutz. But key shareholders and some board members are backing Mr. Lutz.

Mr. Iacocca's apparent opposition to the respected, strong-willed Mr. Lutz has dragged out the selection process, created uncertainty throughout the company, and has provoked criticism from shareholders and other top executives.

One former candidate for one of the top jobs, Chrysler Vice Chairman Robert S. Miller, left the company this month to become an investment banker after writing a memo said to have criticized Mr. Iacocca's lack of plans for a successor.

Soon after, John Neff, who runs the Windsor Fund Inc., one of Chrysler's largest shareholders, called on Chrysler to quickly anoint Mr. Lutz to clear up the uncertainty and avoid disruption at the company.

"There's obviously a battle going on," one Lutz backer said yesterday. "I wish to hell the board would just take over. When Iacocca finally leaves, they're going to say, 'Thank God.' "

Chrysler officials would not confirm or deny plans for a special board meeting, while others said that the board's three-man nominating committee planned to convene, perhaps by phone. One published report said that the panel would meet in New York with the latest candidate whose name has surfaced publicly.

He is General Motors executive Robert J. Eaton, 52, president of GM's highly profitable European operations. Mr. Eaton confirmed to The New York Times this week that he had discussed a job with Mr. Iacocca and would consider an offer.

The Zurich, Switzerland-based Mr. Eaton was in Hungary yesterday to preside over the opening of a GM plant. In Detroit, GM officials said that they had no information on any of Mr. Eaton's other travel plans. GM also declined comment on the reported wooing of Mr. Eaton.

Mr. Eaton is the latest of several outsiders approached about a post-Iacocca job at Chrysler, any of whom would probably block Mr. Lutz's path and trigger his departure from the company.

Mr. Lutz's critics charge that he is mainly a car buff and has too prickly a personality for the top job. But backers contend that he is well suited to Chrysler's probable long-term role in the auto industry, as a small producer of cars and trucks.

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