DETROIT -- Chrysler Corp., once again turning outside the corporate hierarchy for leadership in crisis, announced yesterday that it has chosen General Motors executive Robert J. Eaton to replace Lee A. Iacocca as chairman and chief executive officer at the end of the year.
Mr. Eaton, 52, will join Mr. Iacocca in a newly formed office of the chief executive. Mr. Iacocca will be 68 in October and plans to remain a Chrysler director and chairman of the board's executive committee.
Robert A. Lutz, Chrysler's president, said he would remain as president, though he was disappointed that he did not get the top job. He had been Chrysler's chief operating officer, but that title will immediately go to Mr. Eaton, who will also be vice chairman until Mr. Iacocca steps down.
"I respect the decision of the board," Mr. Lutz said. "Being a team player means you don't sulk or quit when someone else is named captain of the team."
Mr. Iacocca explained that Mr. Eaton had been chosen "because the board thought Mr. Eaton was the most qualified."
Mr. Eaton's age seemed to be an advantage, too, over Mr. Lutz, who is 60. Mr. Iacocca introduced Mr. Eaton at a news conference in Detroit yesterday as "the right man to lead Chrysler through the '90s and into the 21st century."
Mr. Iacocca said he had been impressed with Mr. Eaton's performance as president of GM Europe. "Under him GM became the low-cost producer and is making 25 percent more cars with 10 percent fewer people," he said.
Mr. Eaton will take command of Chrysler at a time when it is struggling to hold onto market share and regain profitability in a industry that has been battered by the recession. Chrysler lost $765 million in 1991, not nearly as much as GM or Ford but enough to raise doubts about the No. 3 U.S. automaker's future.
Because Mr. Eaton was recruited from outside Chrysler -- indeed, from one of its rivals -- several new questions now arise:
* Will Mr. Eaton be able to attract and maintain the loyalty of those Chrysler executives, engineers and managers who had rallied behind Mr. Lutz? Mr. Lutz built a team of executives responsible for a vast array of tasks including new vehicle development, sales and manufacturing.
* Will Mr. Lutz receive job offers, as often happens when an executive is passed over for a top post, and would he take one?
* How active will Mr. Iacocca be in Chrysler's business in %J retirement, especially if Chrysler is not able to put its finances on a more solid footing?
Trying to ease the sting of Mr. Lutz's defeat, Mr. Iacocca called him "a .400 hitter," adding: "He deserves all the accolades he gets. The two will complement each other beautifully."
But the company still faces the possibility of Mr. Lutz's departure. Mr. Eaton dodged the question of whether Mr. Lutz would be restored as chief operating officer on Jan. 1, saying the board would decide.
"In some sense, it's an admission of defeat when a monarch like Mr. Iacocca must go outside his company to find a successor because one of his most important jobs is to groom one," said Jeffrey Sonnenfeld, director of the Center for Leadership and Career Studies at Emory University in Atlanta.
Still, Mr. Sonnenfeld said, "Mr. Iacocca is to be commended for working with the board to find a strong, independent successor that wasn't being brought in just to pay homage to the Iacocca legend. It could have been a public brawl."
Mr. Eaton, a mechanical engineer by profession who worked in mostly technical positions at GM, said "having a chance to lead Chrysler at this point has to be the best job in the automobile industry, period."
The hiring of Mr. Eaton puts to rest, at least temporarily, widespread concern among dealers, investors and Chrysler employees over the lack of an executive succession plan.
Mr. Iacocca said he was relieved the 18-month search had ended. He said the board had considered about a dozen executives from inside and outside Chrysler, and that Gerald Greenwald, a former president, had been a candidate.
When asked what he would be doing as chairman of Chrysler's executive committee, Mr. Iacocca answered, "Playing golf." Elaborating, he said, "I will not be a big force."
He also does not want to appear in any more commercials for Chrysler -- the No. 3 American automaker after GM and Ford Motor Co. -- beyond one he is filming now. "It's a hundred takes, eight hours, and I don't get paid," he said.
In inheriting the mantle at Chrysler, Mr. Eaton could become a spokesman for protectionism and managed trade, policy viewpoints that have been favorite subjects of Mr. Iacocca.
That would be a departure from GM's official free-trade stance, but Mr. Eaton explained, "I haven't been a free-trader for 20 years. You've got to have a level playing field. There is a lot of work to be done in the area of trade."