1984, he sought election as leader of the Liberal
Party but was defeated by his rival, John Turner. In a
political autobiography titledStraight from the Heart
(1985) Chrétien reflected at length on the signifi-
cance of that loss. After serving briefly as deputy
prime minister of Canada in 1986, he took a break
from politics and practiced law until Turner re-
signed as party leader in 1990.
Impact Historians have described Jean Chrétien as
one of Prime Minister Trudeau’s most faithful lieu-
tenants. Chrétien’s opposition to Québécois sover-
eignty and his leadership in the constitutional de-
bates of the early 1980’s were instrumental to the
realization of the Liberal Party’s push for a stronger
federal government in Canada.
Further Reading
Martin, Lawrence.The Will to Win.Vol.1inChrétien.
Toronto: Lester, 1995.
___.Iron Man: The Defiant Reign of Jean Chrétien.
Vol. 2 inChrétien. Toronto: Viking Canada, 2003.
See, Scott W.The Histor y of Canada. Westport, Conn.:
Greenwood Press, 2001.
Jan Pendergrass
See also Canada Act of 1982; Canadian Charter of
Rights and Freedoms; Lévesque, René; Meech Lake
Accord; Minorities in Canada; Quebec English sign
ban; Trudeau, Pierre; Turner, John.
Chrysler Corporation federal
rescue
The Event Automobile giant Chrysler, facing
bankruptcy, receives assistance from the federal
government that helps it survive
Date February 23, 1981
The controversial federal loan guarantees that saved
Chr ysler formed the first federal rescue of a business at a
time when President Ronald Reagan advocated smaller
government.
Chrysler Corporation entered the 1980’s, along with
Ford Motor Company and General Motors, as one of
Detroit’s Big Three automakers. The company had a
storied history, yet Chrysler’s products no longer ap-
pealed to many American car buyers. Inferior auto-
mobiles and poor management brought the com-
pany to the brink of bankruptcy in 1981.
A History of Financial Woes Chrysler’s manage-
ment system was unable to keep pace with the increas-
ingly sophisticated automobile business. Company-
wide optimism, moreover, prevented management
from acknowledging the depth of the problem, be-
cause employees were confident that sales would
be sufficient to mitigate any mistakes the company
might make. The first Chrysler car had appeared in- It sold well, and the company had established a
solid financial position by the end of World War II.
However, under Chairman K. T. Keller, Chrysler frit-
tered away its advantages. Keller insisted on main-
taining many prewar practices, refusing to adapt
corporate practices to the needs of the postwar mar-
ketplace. He disdained styling, for example, despite
its popularity with consumers.
Chrysler’s next chairman, Lester L. Colbert,
struggled in vain to reverse the company’s dwindling
momentum. Colbert increased plant capacity, trying
to decentralize operations and to improve the man-
ufacturer’s chronically poor relations with its deal-
ers. In the 1960’s, Chrysler rebounded. Under the
guidance of Lynn Townsend, the company in-
creased its market share to 18 percent, while estab-
lishing substantial overseas sales. It also stockpiled
cars in expectation of future orders, however, a
“sales bank” tactic that would later damage the com-
pany. By the 1970’s, other car companies discontin-
ued the sales bank strategy. Chrysler, however, was
forced to continue building and storing cars that no-
body had yet ordered in order to keep its plants run-
ning. By the time Lee A. Iacocca became chairman
in 1978, Chrysler stood at the edge of bankruptcy.
The Bailout In the 1980’s, American car compa-
nies faced stiff competition from Japanese firms that
emphasized fuel efficiency and quality. Imports ac-
counted for about 30 percent of the American auto-
mobile market, and some analysts doubted that room
remained for three car giants in Detroit. In 1980,
Chrysler lost $1.71 billion. No company in American
history had ever lost so much money. By February,
1981, Chrysler owed its suppliers more than $300
million. To preserve American jobs and one of the
largest American companies, Iacocca sought loan as-
sistance from the federal government.
On its last full day in office, the administration of
President Jimmy Carter arranged a deal for Chrys-
ler. The situation thus presented newly installed
president Ronald Reagan with a dilemma. The Re-The Eighties in America Chrysler Corporation federal rescue 213