Business Notes AUTOS

For Chrysler's ebullient chairman Lee Iacocca, it was a humiliating moment. "We're all culpable, and we made a mistake," he declared at a news conference last week. It was "dumb" and "unforgivable," he said, for Chrysler to have allowed employees to test-drive some of the company's new autos with their odometers disconnected and later sell the cars as new. That practice led to a grand-jury indictment against the company and two of its executives two weeks ago. Chrysler had vigorously defended its actions as normal quality-testing procedures in the industry, but amid a storm of adverse publicity, Iacocca decided that the smart thing to do was to make amends.

Accordingly, the chairman announced, and Chrysler advertisements subsequently declaimed, that the owners of some 60,000 affected cars built between July 1985 and the end of 1986 would get two extra years -- or 20,000 additional miles -- on their auto warranties. Another 40 customers whose cars were damaged during the test-driving period will receive new vehicles.

Chrysler's problems with the test-driving fuss are not over. The No. 3 U.S. automaker (1986 revenues: $22.6 billion) faces at least three lawsuits, a trial that could begin as early as August, and possible fines of up to $120 million in connection with the furor.