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The Fall of Chrysler Corporation: 1972-1980

1864-19111912-191920-391940-49 1950-63 1964-19711972-801981-921993-97
History By Year • Coming: 1998-2007 (disastrous Daimler deal) • 2008-2013 (re-rebirth)

Complacency, the gas crises, penny-pinching, bureaucracy, and inflation pushed Chrysler to the verge of bankruptcy. Still, engineers met challenges with imaginative solutions such as electronic ignition, engine control computers, and weight reduction, while working on the first truly new domestic Chrysler Corporation cars since 1960. By 1980, Chrysler was a shell of the global powerhouse it had been; and the government “bail-out” (loan guarantees) would, for some, discredit the company for the rest of its life. Two turnarounds and transformations were coming...

1972: electronics, emissions reductions, net horsepower

  • 1972 Plymouth carsThe auto industry switches to net horsepower ratings, confusing many with sudden drops in power ratings.
  • The Street Hemi and many other high performance engines do not return for 1971. High build costs, high insurance rates, and a plethora of muscle cars on the market made high performance unaffordable for Chrysler, and less attractive to GM and Ford.
  • The Valiant and Dart, boosted by strong Duster sales, grabbed 40% of the U.S. compact car market; with Cricket and Colt, the company had 25% of the domestic small car market as well. Dodge Truck had an 11% share while cars had a 17% share (including Colts and Crickets).
  • Chrysler's Electronic Ignition System is phased in, ending up on all engines late in the 1972 model year; it boosted voltage by up to 35%, helping starting and reducing misfiring.
  • The Cleaner Air System used exhaust gas recirculation to route re-burn some exhaust gas, lowering peak burn temperatures. An electric assist choke prevented the mixture from being overly rich after the car warmed up, and orifice spark advance was included; this tended to break down quickly and was often bypassed by owners or mechanics.
  • Huntsville produces AM/FM automotive radios for Chrysler, as the division transitions from aerospace and defense to automotive products.
  • Lynn Townsend continued as chairman, John Riccardo as president. Chrysler’s net assets were $955 million at the end of the year, a new record. Both domestic and international sales surged to new highs, with a total of two million vehicles sold. The company had 5,466 dealers in the U.S.

1973: the last year of cheap gas

1973 dodge car line

  • Engine power fell across the board due to primitive emissions controls.
  • Chrysler's Electronic Ignition System became standard across the board.
  • Bumpers able to withstand 5 mph front and 2.5 mph rear impacts were mandated by law, causing significant front end styling changes to the Fury, Satellite, Valiant, and various Dodge and Chrysler cars.
  • EGR altered to proportional system to increase driveability, mileage.
  • Interior noise was reduced on B-body cars, and Charger, Coronet, and others with the new Torsion-Quiet Ride system; this isolated the passenger compartment from road and engine noise through rubber mounts, extra padding, and other materials. Charger SE was “super quiet” with extra silencing materials. The downside was more steering isolation and looser handling, now not quite as far above similar GM and Ford cars.
  • The Kary Van was created with a 10 foot body and a six-foot-two-inch height for easy walking.
  • Pickups now had a Club Cab option (rear wheel drive models only), which was unique for the time, adding a foot and a half of space behind the rear seat for storage; jump seats could be folded down to carry people or folded up for more storage, and windows extended along the full side of the cab for visibility.
  • A new high speed starter was used on the 360, 400, and 440 engines.
  • Disc brakes became standard on all cars except the six-cylinder Valiants, where they were optional. Power assist was standard on all Furys, Monacos, Duster 340s and Dart 340s, and all wagons.
  • Security Alarm System was available on Fury and Monaco.
  • Chrysler's corporate production increased 13.1 % over 1972, beating the industry's 9.5% improvement and garnering an industry share of 16%. Plymouth sales rose 21% but the brand was still number six in the US.
  • The GTX returned as the 440 engine package on Road Runner.
  • Valiant, Duster, and Dart went to the look they would have until their end, in 1976.
  • Space Duster revived the old Barracuda concept of a folding rear seat and fully carpeted trunk and cargo space that could extend to 6.5 feet.
  • The British-built sub-compact Plymouth Cricket was launched in four-door sedan and wagon models; poor sales and quality led to the Hillman Avenger clone being quietly dropped before year's end. Chrysler Canada transferred Cricket nameplates to the Mitsubishi-made Dodge Colt, calling it Cricket OHC.
  • Sales continued to rise around the world, hitting a record $12 billion and 2.2 million vehicles. Net assets of the year were $1.1 billion, a new record.
  • Also see:

1974

market share

  • Fuel Pacer activated the optional fender-mounted turn signals to warn the driver of heavy gas usage.
  • Chrysler’s brand new C-bodies were unveiled, just as a gas crisis hit and large cars were suddenly unfashionable. These included the Fury, Monaco, and various Chrysler-brand cars.
  • As luxury buyers downsized, Chrysler met them with popular “luxury versions” of the compacts: Valiant Brougham and Dart SE both added the trimmings of high-end cars, and were popular with many downsizing from larger cars. Over half the company’s production was now the A-body line.
  • Dodge Ramcharger and Plymouth Trail Duster (4x4 SUVs) launch.
  • “Compact multi-purpose wagon” Plymouth Voyager, essentially Dodge Mini Ram Van, is launched.
  • New for 1974 was a collapsible steering column, side door impact beams, a new hydraulic impact-absorbing bumper system, a coolant reserve system (that avoided having antifreeze splashing wastefully onto the roads, and made it easier to check coolant levels), and seat belts with a starter interlock — only used in 1974.
  • On Chrysler brand cars, the fuse box now swung down from the dash for easier access, and a tilt - telescope steering column was available. A larger dash panel liner cut noise.
  • Oil changes were extended to six months / 5,000 miles across the board. They would stick with the six-month minimum through 2012.
  • Cordoba , a B-body with Chrysler sound-insulation and luxury-feel treatment, dominated Chrysler brand sales, with 150,000 Cordobas made in 1975. This was the first “junior Chrysler.” 
  • Market share rose to 17% in the US; compact car market share was 40%; truck market share was 11%.
  • The company slashed the number of parts it used at car assembly plants from 21,000 to 15,000.
  • Ed Cafiero was Executive Vice President. Lynn Townsend continued as chairman, John Riccardo as president.
  • Also see Chryslers of 1974 - 1975: New Yorker, Newport, Town & Country

1975

  • New emissions controls, “unnecessarily strict” according to Chrysler leaders, require catalytic converters on cars sold in California and most cars sold elsewhere. Chrysler developed their own system. Notably, Volkswagen would use multiple-port fuel injection to avoid converters until 1980.
  • Plymouth Fury was moved to the smaller B-body platform — or, if you prefer, Belvedere was renamed to Fury. The big C-body Fury, using a still-new body, was called Gran Fury. Plymouth could now talk about its downsized, “small” cars.
  • The Plymouth Fury and Coronet both got a facelift. Two door versions were added to the lineup, replacing the base Chargers.
  • Huntsville makes four-speaker stereos with eight-track tape options; before long they would also make CB radio and tape deck options.
  • 1975 brought in the Phase II Electronic Ignition System (for the New Yorker).
  • The United Kingdom agreed to give Chrysler up to $100 million in 1976 to keep manufacturing going in hard-hit areas, despite losses at Rootes Group. Chrysler was in the process of launching new, much more competitive vehicles engineered cooperatively by Simca, Rootes, and Chrysler US (mainly engineered by Simca and styled by Rootes).
  • Ten heavy-duty trucks were dropped due to slow sales; as the bottom dropped out of the motor home business, chassis sales slowed. Dodge still supplied around 75% of all domestic motor home chassis.
  • In July 1975, following investor demands for his resignation, Lynn Townsend — once the architect of Chrysler’s resurgence, booster of muscle cars, and creator of the international corporate presence — resigned. John Riccardo was elected chairman, and Ed A. Cafiero was bumped up to president.
  • Plymouth loaded the premium Valiant Brougham sedan with even more luxury appointments, as “luxury” outfitted small cars were selling well. GM, Ford, Chrysler, and AMC all found it hard to make enough six-cylinder engines to satisfy owners downsizing from V8s.
  • Radial tires, a more widely available fuel-pacer system, and tighter torque converter were used across the line to increase mileage.
  • Chrysler Corporation sales in the US dropped by 24% from 1974, and worldwide sales fell to 2.5 million. The company lost $260 million for the year, including a booked loss of $55 million from selling Airtemp (as the company was valued more highly on the books than the sale price). Market share was down to 15%, with trucks up to 13% thanks to the sale of “sport trucks.”
  • Chryslers of 1974 - 1975 • Jeep for 1975-76 • Plymouths of 1975

1976

  • On February 23, 1976, the AirTemp division was sold to Fedders, after years of losses. The pioneering company had fallen behind, and also still emphasized quality over price; Fedders decidedly was a price-first outfit. Chrysler continued to make its own automotive heating and air conditioning parts in Dayton, Ohio.
  • Launched in 1976 on the premium 400 and 440 engines, the “Lean Burn” system, developed by Huntsville, marked the first time a computer was used for spark control in a car. It cut emissions enough to avoid use of catalytic converters but was not known for trouble free operation, due to materials technology and some packaging decisions.
  • The Plymouth Volare and Dodge Aspen, originally intended to be called Valiant and Dart and replacing the old stalwarts, were launched to great fanfare and lauded by Consumer Reports and other publications (Motor Trend Car of the Year). They quickly turn out to be nightmares, rushed into production with far too little testing and development, and destroy Chrysler’s reputation for quality — unfortunate since they were, otherwise, the right cars for the time. Sales are actually lower than the older cars; Valiant, Dart, Duster, Aspen, and Volare, all together, took 30% of the compact market in January 1976.
  • Dodge Coronet two-doors are renamed to Dodge Charger Sport.
  • Chrysler Cordoba is launched; it will be the company’s most successful larger-than-Volare car, and the only one other than Volare, Aspen, and Fury to sell in reasonable numbers in 1977. The car was originally earmarked for Plymouth.
  • The unfinished plant in New Stanton, Pennsylvania, was sold.
  • Huntsville launches the first Vacuum Fluorescent display digital clock; it is also the first automotive timepiece certified as having Chronometer accuracy.
  • Chrysler won the contract to develop its XM-1 turbine-powered tank for the Army, a program valued at $4 billion. It also got $465 million in contracts to build M-60 tanks.
  • Market share rose to 16%; truck market share to 14% (both in the US). Worldwide sales were $15.5 billion, up from $11.6 billion; that represented 3.1 million units. The company had a $423 million profit.
  • The Simca 1307-08 were named Europe’s Car of the Year, the first time a subsidiary of an American company won the award. It would soon win it again, for the Horizon.
  • Also see Jeep for 1975-76

1977

  • Trying to repeat the success of the upscale Valiant Brougham, Chrysler releases, somewhat late, the Dodge Diplomat and Chrysler LeBaron. Essentially Volares with upscale styling, the cars are a fortunate addition given the horrible reputation Aspen and Volare quickly gain. Sales are minimal but will climb. The company designates the new “M bodies” to be intermediates, not compacts.
  • Dodge follows Plymouth’s move with Fury replacing Belvedere: Dodge Coronet is renamed “Dodge Monaco,” preserving the larger-car names. Coronet, one of Chrysler Corporation’s oldest nameplates, is quietly dropped.
  • Restyled Cordoba hits the streets along with improved Volare and Aspens.
  • A.G. Loofbourrow retires.
  • A new 225,000 square foot plant was built on Wynn Drive, Huntsville, to support the growing need for automotive electronics.
  • The company declared a $163 million profit.
  • Also see Chrysler Corporation cars of 1977 and 1977 Dodge trucks

sales by car

1978

  • Lee Iacocca, newly appointed president of Chrysler Corporation, quickly takes charge, drops projects, demands changes, and insists on higher quality from production. A flood of new products and innovations would start hitting the market within three years, partly due to the new CEO’s decisiveness. (John Riccardo remains chairman.)
  • Huntsville people dreamed up and built the world’s first mass-produced integrated trip computer. 176,000 square feet were added to Huntsville for making auto electronics.
  • Re-engineered B-vans (Dodge Sportsman and Plymouth Voyager) launched; Chrysler still dominates the van market.
  • Chrysler Horizon (code C2), a true partnership across the ocean and Channel, launched and named Europe’s Car of the Year. More than three million would be built from 1978 to 1990.
  • Omni O24 and Horizon TC3, later retitled Charger and Turismo, appear.
  • The first turbine-powered XM-1 tank is delivered to the Army for pilot testing.
  • Chrysler Marine launches restyled outboard motors, a new deep-V hull cruiser, and a new 20-foot sailboat.
  • Dodge trucks set a sales record with B-van continuing to be first place in sales. Jefferson Avenue was converted to truck sales and Pillette Road expanded.
  • Trenton Engine expansion started, to build 2.2 engines.
  • Introduced the first modern lockup torque converter
  • Dayton started making a lightweight rotary air conditioner compressor.
  • Chrysler Australia launches Mitsubishi Sigma.
  • Computer controls were added to several factories.
  • Neil Armstrong joined Chrysler’s R&D Committee.
  • Chrysler started full production of the turbine powered XM1 tank, soon to be renamed M1 Abrams.
  • In a deal of little real significance, Chrysler signs an agreement with Maserati and deTomaso for design and engineering collaboration. The primary result will be the TC by Maserati — which arrives too late to serve its primary purpose.
  • The first front-wheel-drive subcompact car ever to be built in America hits the showroom...the Dodge Omni and Plymouth Horizon, Americanized versions of Chrysler Horizon. Thanks to much more extensive customization and quality control, they become instant successes.
  • Chrysler lost $200 million for the year.
  • Chrysler Sunbeam launched in the UK.
  • Also see Chrysler Corporation 1978 and Plymouths of 1978

1979

iacocca and other leaders

  • Creditors cut Chrysler off, forcing Lee Iacocca to ask the Federal government for help. The Carter administration inspected the company’s product plans and provided $1.5 billion in loan guarantees (no actual Federal money changed hands), provided Chrysler slash its costs and get $2 billion more in unguaranteed loans. States with Chrysler plants made loans to avoid unemployment, and PSA (Peugeot) lent $100 million. Both unions and salaried employees took pay cuts. The “bailout,” costing the government nothing but risk, is highly controversial and many buyers left. Most pundits said Chrysler would die anyway.
  • Lee Iacocca replaced John Riccardo as chairman of the board on September 20, 1979. J. Paul Bergmoser was elected President. Gerald Greenwald was elected EVP-Finance, E.F. Laux was elected EVP-Sales and Marketing, Hal Sperlich was named EVP-Engineering and Production Development, and R. Vining was promoted to EVP-Manufacturing. John Riccardo retired.
  • Market share fell to 10% for cars, 11% for trucks, in the US.
  • The company created the first money-back guarantee (30 days or 1,000 miles) with no-cost maintenance for two years and two year emergency towing.
  • The net loss for 1979 was $1.1 billion. Worldwide sales fell to 1.8 million.

1980

  • Thanks to its subsidiaries in Europe, Chrysler could boast that it had “10 billion miles of front wheel drive experience,” more than GM, Ford, Datsun (Nissan), or Toyota.
  • Chrysler Boat (not including the engine businesses) sold to Texas Marine International (TMI), which was formed by ex-Chrysler executives; it would fail in the bad economic times at the beginning of the 1980s, but some of the designs would continue to be built for some time as the molds were passed to other companies.
  • Chrysler lost $1.7 billion but was still able, late in the year, to launch its front wheel drive 1981 Plymouth Reliant and Dodge Aries, the best domestic replacement for traditional rear wheel drive mid-sized and compact cars. Total worldwide sales, nonetheless, plunged to 1.2 million... but the turnaround was in sight. When the Reliant and Aries debuted the long night was over, and the sun was starting to rise.
  • The AMC Eagle beats Subaru Outback to the “sport utility wagon” by 17 years, using the revolutionary New Process Gear NP119 transfer case; it had full time four wheel drive, dubbed Quadra-Trac (a name first used in 1973 for a different system).
  • Renault purchased 25% of AMC and began selling their 18i sedan, Fuego sports car, and LeCar mini at AMC dealers. AMC dropped their V8 option completely and put the Pontiac four-cylinder into the Jeep CJ.
  • See 1980 Chrysler cars 

1864-19111912-191920-391940-49 1950-63 1964-19711972-801981-921993-97
History By Year • Coming: 1998-2007 (disastrous Daimler deal) • 2008-2013 (re-rebirth)

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