Chrysler Vows to Beat GM to Market With Small Car

DETROIT — In an apparent attempt to steal some thunder from General Motors Corp.’s ballyhooed Saturn project, Chrysler Corp. Chairman Lee Iacocca has vowed that Chrysler will build a new, import-fighting small car before GM’s Saturn subcompact goes into production.

Ironically, the move comes less than a week after Iacocca said that Chrysler will triple its imports of Japanese-built small cars in response to the Reagan Administration’s decision not to seek a fifth year of limits on Japanese auto imports.

In a private speech here Monday night to auto industry analysts and others from the financial community. Iacocca said Chrysler’s new small-car project, code-named Liberty, will develop models with more advanced technology than anything now offered by the Japanese. He indicated that the first cars will be introduced before GM’s Saturn small car, which is scheduled to enter production in either the 1988 or 1989 model year.

A Chrysler spokesman confirmed the details of Iacocca’s speech Tuesday, adding that the Liberty project is an expanded version of Chrysler’s Concept 90, the company’s 2-year-old effort to develop a domestic small car that could be cost competitive with Japanese imports.

Iacocca’s speech comes as top executives at both Chrysler and Ford Motor Co. are becoming jealous of the massive publicity that GM is getting for its Saturn project. The intense media coverage over the last two months of GM’s search for a site to build Saturn’s manufacturing complex has brought a national spotlight to GM’s efforts to compete more effectively with the Japanese.

Executives at both Ford and Chrysler have privately voiced skepticism about whether Saturn warrants so much attention. They have pointed out that both Ford and Chrysler have similar projects--Ford’s is called Project Alpha, while Chrysler’s is now called Liberty (perhaps a play on Iacocca’s deep involvement in the campaign to restore the Statue of Liberty).

But some analysts questioned the significance of Iacocca’s pledge to beat Saturn to the showroom floor.

“Sure, Chrysler can come out with a new product before Saturn,” said David Cole, director of the Center for the Study of Automotive Transportation at the University of Michigan. “But Saturn is more than just a new car, it is an attempt to transform the manufacturing processes used in the auto industry. And I would question whether Chrysler has the technological resources that General Motors has to do a total revolution in its manufacturing processes of the kind that Saturn represents.”

Another reason Iacocca’s pledge met with some skepticism is that it came just days after he announced that Chrysler was tripling its imports of small cars from Japan while de-emphasizing its domestic production of subcompacts.

In response to the Reagan Administration’s decision not to urge Japan to extend auto import quotas for a fifth year, Iacocca said in New York last week that Chrysler’s proposed P-car, a U.S.-built sub-compact scheduled to be introduced late in the 1986 model year, was being converted into a more expensive compact model that will not compete as directly with Japanese imports.