Chrysler's Blue-Collar Director

A St. Valentine's Day deadline for a lot of federal aid

Next March an unusual name will appear on the list of 17 nominees to the Chrysler Corp. board: Douglas A. Fraser, 62, president of the United Auto Workers. The nomination of this hardy adversary from Big Labor is part of the price that the automaker had to pay last week to win from the union economic concessions essential to corporate survival.

The first election of a U.S. union chief to the board of such a large company may be a symbolic victory for labor, but it will not necessarily set a precedent. Chrysler's plight makes it unique, and this is not a deal that many other companies or other unions will want to accept in better times.

Still, Fraser has a yen to see European-style ''co-determination'' spread in the U.S. In West Germany, Sweden and Denmark, workers sit on supervisory boards. Studies suggest that they have little impact on corporate policy--for good or ill. Notes one German industrialist:

''We have let the workers into the executive washroom, but we have still kept the keys.''

The key to the boardroom was part of a trade in which the U.A.W. chiefs let Chrysler off with an easier three-year wage pact than those recently signed with General Motors and Ford. The company will save about $200 million by deferring payments into its pension plan next year and a further $203 million over the next two years by delaying some wage raises and benefit improvements. By the end of the three years, however, Chrysler workers will be earning the same as GM and Ford employees, and the industry's hourly labor costs--wages, fringe benefits and pensions--will have jumped about one-third, to $20.

The labor settlement will help Chrysler to get federal aid. The Carter Administration has insisted that as a precondition for help Chrysler must win concessions from its bankers, dealers, supliers, executives and workers. Everyone las been reluctant to be the first to act, and some have been downright ornery. Only three weeks ago, nearly one-third of Chrysler's 180 bankers voted against renegotiating its credit lines, arguing that even a federal bailout might not save ;he company. Now that the U.A.W. has Broken the logjam, and with the presidential primaries approaching, support for Chrysler is gaining momentum in the White House, the Treasury and Congress.

At a breakfast last Wednesday attended by Vice President Walter Mondale, Treasury Secretary G. William Miller, and Fraser, the Treasury dropped its earlier insistence that aid be limited to $750 million. This raises the chances that Congress will give the company more, probably in the form of federal loan guarantees. Chrysler had asked for $1.2 billion. One worry: Booz, Allen & Hamilton, the company's management consultants, suggested that even $1.2 billion might not be enough. This week Chrysler will announce a third-quarter loss of about $460 million, more than double its previous record deficit of $207 million in the second quarter. The full-year loss could top $1 billion.

The weak sister of the auto industry is not suffering in isolation. In the third quarter, GM's profits fell a staggering 96%, from $528 million to $21.4 million. In the same three months, Ford lost a frightening $637 million before taxes on its U.S. operations; strong overseas earnings and a tax break in Britain gave it an overall profit of $103 million, but that was down 66% from last year's third quarter. The common problem is weak sales, especially for the more profitable larger cars. So far this year, domestic car sales are down 7% at GM, 13% at Chrysler and 15% at Ford. Indeed, so gloomy is the immediate outlook that Chairman Lee lacocca has taken on the job of pitching Chrysler cars on TV, and the company may re-introduce rebates to buyers.

While even opponents are convinced that the company will get a big bailout, the House is set to recess in about four weeks, and Chrysler's backers are putting on heavy pressure to pass a bill before next year. They argue that the company needs to secure federal aid, persuade possibly recalcitrant banks to put up loans, and get the rest of its financial jigsaw in order very soon. In a warning of just when bankruptcy would hit if help does not come through, lacocca told TIME: ''The bad news comes around Feb. 15. Let's say St. Valentine's Day.''

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