"Ten Years Is Enough"

Few U.S. companies have been hit harder by the recession than Chrysler Corp. Its losses have mounted--$94.1 million in the first quarter of 1975--and so has the pressure on its chairman, Lynn Townsend. Vacationing in Hawaii last month, Townsend decided that at 56 he had struggled with the problems of the nation's third largest automaker long enough. Last week he turned over the wheel to his hand-picked successor, John Riccardo, 51.

Like Townsend, Riccardo is a former accountant (both came into Chrysler from the auditing firm of Touche Ross) who has a reputation for being a cold-blooded cost cutter. Riccardo's replacement as president will be Executive Vice President Eugene Cafiero, 49, an affable, up-from-the-ranks production expert and the first member of Chrysler's top management since the early 1950s with a strong automotive background. Both men have won high marks for their performance at Chrysler so far: directors took just six minutes last week to approve their promotions.

Tough Decisions. Townsend's decision to retire even as a director on Oct. 1 caught the industry by surprise. At a Detroit press conference he rejected any suggestion that creditors or directors had hastened his departure. Later he expounded to TIME Correspondent Edward J. Boyer on the pressures of "14 stress-filled years" at the top: "I can't remember a day or week when I wasn't making decisions that would have an impact on this entire company. I never remember a period of relaxation when I wasn't concerned with some element of business. I do believe we ask more of an individual than we should when we ask him to bear the brunt of these decisions for an extended period of time. Ten years is long enough for a chairman or president." He feels able to leave now, Townsend said, because Chrysler's outlook is brightening, and the company should make a profit by the fourth quarter.

Even so, Riccardo and Cafiero face some tough decisions of their own if they are to make Chrysler consistently profitable. They will need to further revamp its product line, which is currently top-heavy with models that have sold poorly in spite of cash rebates. But the company has far less money than either GM or Ford to spend on developing new models. Its share of the new-car market has fallen to 15% now from 19% five years ago, mainly because, according to critics, Chrysler has paid too much attention to engineering and bookkeeping and not enough to figuring out what car buyers really want. "We've been criticized for being dominated by financial guys who had little feel for the market," acknowledges one Chrysler insider. By turning over the company to Riccardo and Cafiero now, he adds, Chrysler, will have "better balance at the top."

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