Payola at Chrysler (Contd.)

The troubles of the harassed Chrysler Corp.--which burst into public view with the forced resignation of President William C. Newberg for profiting from suppliers' sales to Chrysler--showed no sign of letting up. Last week Chrysler reluctantly admitted--ten days after the fact --that another Chrysler employee, John E. Ruedisueli, a purchasing agent, had been fired for a "violation of company purchasing policies." After Newberg's ousting, company lawyers and accountants began an investigation of other Chrysler executives. Presumably more firings are to come.

For some stockholders, Chrysler's management was not moving fast enough. Three of them filed suit last week asking that Chrysler, ninth largest U.S. company, be placed in receivership. The three stockholders: Chief Chrysler Critic Sol Dann, a Detroit lawyer, Samuel S. Schwartzberg, a New York Chrysler stockholder, and Detroit Attorney Karl S. Horvath, a former production manager of Chrysler's Twinsburg, Ohio plant. Charging "gross and unconscionable mismanagement" and "fraudulent practices dating back to 1940," the suit--third to be filed by Chrysler stockholders in the past month--charges three top Chrysler officials with improper dealings with suppliers.

P:Chairman Lester Lum ("Tex") Colbert is charged with helping Budd Co. get die orders in 1957 and 1960 on a time-and-material cost basis, which the complaint terms "unheard of" in the auto industry.

P:Engineering Vice President Paul C. Ackerman is charged with acquiring interests in Creative Products, Inc., which supplies sample bodies to Chrysler.

P:Auto Manufacturing Vice President Rinehardt S. Bright is charged with accepting a gift of 13,000 shares of C. M. Hall Lamp Co. stock for himself and his family shortly after Hall became the exclusive supplier of headlights to Chrysler.

The suit also charges Chrysler's directors with making "extravagant and wasteful deals," e.g., for the marketing of the Simca French compact, a deal made, say the three stockholders, on "terms so disadvantageous that Chrysler has lost over $10 million." While swivel chairs spun in the law offices of Chrysler's attorneys, the word from the company's beleaguered executive suites was: "No comment."

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