The Chrysler Mystery

Chrysler's brand-new President William Charles Newberg, 49, called in the press one day last week, smilingly posed beside brand-new 1961 models for pictures to be used when the cars go on sale in September and October. Elected president only nine weeks ago, he talked enthusiastically of plans for Chrysler's coming year. Two days later Chrysler Chairman Lester Lum ("Tex") Colbert called an emergency meeting of Chrysler's board of directors in Manhattan, and he and Newberg flew there from Detroit in two company planes. At the meeting, to the shocked surprise of Detroit insiders and outsiders alike, Newberg resigned.

Why? The board's terse official explanation: "His resignation was due to differences of opinion on certain corporation policies.'' When Colbert flew back to Detroit alone, leaving Newberg to follow via commercial flight, the first speculation was that the trouble was a personal squabble between Chrysler's two top men. But when Newberg was asked if he and Colbert were still friends, he replied: "Yes, as far as I'm concerned." It hardly seemed likely at this late date that Colbert and New berg could clash with such finality. Few executives in U.S. companies have been closer.

Friends for years, Newberg and Colbert both started to work for Chrysler in 1933. As Colbert advanced, Newberg was usually only a step behind. When President Colbert became Chrysler's board chairman, it was no surprise to anyone that Newberg was named president, bypassing able First Vice President Edgar C. Row, 64, who, Colbert said, was ailing and anxious to retire. When Newberg left last week the ailing Row was pronounced "recovered" of his ailment (deafness) by Colbert and given his job back, despite the fact that Row had already released his secretary and cleaned out his desk to retire. When everyone at Chrysler clammed up and no further explanation seemed forthcoming, Detroit went busily to work to try to find a solution to the mystery.

One speculation was that Newberg had been caught in unauthorized negotiations with American Motors' President George Romney about a Chrysler-Rambler merger. Romney promptly denied it. Chrysler Stockholder and Chief Gadfly Sol Dann (TIME, May 2) hinted to reporters about shady dealings within the company, fired off a telegram to the Chrysler directors requesting them to "name the certain corporate policies upon which they differed, and specify which of these men was attempting to correct or remove any acts of corruption." Chrysler's reply: "No comment."

At week's end the fog of mystery began to lift: insiders whispered that a conflict of interests in Chrysler's purchasing policies had brought about Newberg's sudden exit from the presidency. But as for details, most of Chrysler's management, along with everyone else, was still being kept in the dark.

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