In one of his 1984 Chrysler TV spots, then-chairman Lee Iacocca declared that in the auto industry, “Product comes first.” It remains as true today as it was then. While there is a popular misconception in some sectors of the auto industry that you can become profitable simply by cutting your operating costs to the bone, the truth is that a car company lives or dies by the strength of its products.
That was the hard truth that Chrysler faced in 1981, as it trepidatiously introduced the models that would determine its fate: the K-cars and the 1981 Imperial.
NEW BLOOD AT CHRYSLERWhen we last left Chrysler, it was 1981 and the company had just launched the products that would determine its fate. Federally guaranteed loans, brutal cost-cutting, and a host of concessions from workers, suppliers, and creditors had kept Chrysler’s doors open, but none of those things would matter if Chrysler had no competitive vehicles to sell.
Chrysler’s truly gargantuan cars had died after 1978. What remained in 1980 was an array of downsized rear-drive cars — the intermediate M-body sedans (Chrysler LeBaron/Dodge Diplomat), the J-body coupes (Chrysler Cordoba/Dodge Mirada), and the big R-body sedans (Chrysler Newport/Dodge St. Regis/Plymouth Gran Fury) — along with the front-wheel-drive L-bodies (Dodge Omni/Plymouth Horizon) and a number of Mitsubishi products. The R-bodies were on their way out and would be gone after 1981. The M-body cars lingered through 1989, mostly for police and taxi use.
Chrysler’s most important new products for 1981 were the compact K-cars, the Dodge Aries and Plymouth Reliant. The two versions were nearly identical save for grilles, badging, and trim; Chrysler no longer had the money to differentiate the brands more than that. Twenty years earlier, Lee Iacocca had lambasted Robert McNamara’s boxy, compact Ford Falcon, convincing Henry Ford II to write off the $37 million development cost of the even smaller, front-wheel-drive Ford Cardinal. Now, he was betting heavily on a car not much bigger than the Cardinal and even boxier than the Falcon.
The Reliant and Aries were extremely conservative cars in every way: square-rigged and upright, long on space efficiency, short on sex appeal. Their engineering was reasonably contemporary, with front-wheel drive, unitary construction, and Chrysler’s first modern four-cylinder engine (a bigger Mitsubishi four was optional). The Ks lacked some of the features of import rivals like the Honda Accord, such as a five-speed manual gearbox or an independent rear suspension; in compensation, the Chrysler products were substantially cheaper. The K-cars were slow but frugal, with reasonable passenger and cargo room and admirable fuel economy. The Reliant and Aries were not great cars, but as no-frills basic transportation, they were decent value.
Contrary to popular belief, the K-cars were hardly a runaway sales success and they got off to a slow start. Part of the problem was that Chrysler advertising stressed the low, low prices, but most early examples at dealerships were heavily optioned, running up the sticker prices well out of bargain territory. They were also hurt by lingering fears about Chrysler’s viability, still an open question in 1981. Even with the low prices, Chrysler had to resort to generous rebates to move the metal. Combined Reliant-Aries sales for 1981 were about 306,000 and many of those apparently came at the expense of the smaller Omni/Horizon, which wasn’t a great deal cheaper than the K-cars.
THE 1981 IMPERIALIf the K-cars were all about unpretentious value, Chrysler’s other new release, the newly revived 1981 Imperial, was something else entirely. For a company so close to financial collapse that its chairman had sought federal relief and substantial sacrifices from its workers, releasing an overstuffed, overpriced prestige car took serious chutzpah. Iacocca was uncharacteristically apologetic about the Imperial, firmly asserting that it hadn’t been his idea and that it had been too late for him to stop it.
The 1981 Imperial was approved by Iacocca’s predecessor, John J. Riccardo, but to our eyes, it seems very much Iacocca’s sort of car. Like Lincoln’s popular Continental Mark series, which Iacocca had launched back in 1968, the Imperial was a big, two-door personal coupe with a long nose, a short deck, and an upright, formal grille. The new car carried a truly imperial price tag; at $18,311 ($1,000 more with the optional moonroof), it cost as much as three K-cars.
The Imperial nameplate had been introduced back in 1924 as Chrysler’s top-of-the-line model. In 1955, the corporation had made Imperial a separate division, hoping to better establish it as a prestige make akin to Lincoln or Cadillac. Its sales had never been very strong and Chrysler had pulled the plug in 1975. Still, the cash-strapped Chrysler management of the late seventies had salivated at the profits generated by the rival Cadillac Eldorado and Lincoln Continental Mark series. With the bargain-basement pricing of the Omni/Horizon and the K-cars, the prospect of a profitable new flagship was particularly enticing; much of the 1981 Imperial’s daunting sticker price was a fat profit margin.
CORDOBA IN DRAGThe 1981 Imperial, which was substantially smaller than its Brobdingnagian predecessor, was based closely on the J-body Chrysler Cordoba. The Cordoba had been launched back in 1975 as Chrysler’s first real entrée into the popular personal-luxury market; the Cordoba remembered today mostly for its well-remembered TV commercials featuring actor Ricardo Montalban. The Cordoba was downsized for 1980, becoming a derivative of the M-body sedans and the Plymouth Volare/Dodge Aspen.
The Imperial was distinguished by unique, heavier-gauge sheet metal, but its dimensions were nearly identical to those of the Cordoba, as were its suspension, brakes, and running gear. The pricier car’s main point of mechanical distinction was fuel injection for its standard V8, Chrysler’s first attempt at electronic fuel injection since the ill-fated Bendix Electrojector of 1958.
In the October 1974 issue of Car and Driver, GM styling chief Bill Mitchell told editor Brock Yates that most Ford products looked liked thrown-together compilations of other cars, something that Mitchell attributed to the fact the influence of the sales force on the styling department. Ford’s number-one sales guy was now running Chrysler, so perhaps it was no surprise that the new Chrysler flagship was a similar agglomeration of luxury-car clichés. From the front, the 1981 Imperial’s razor-edged fenders and standup grille suggested a self-consciously futuristic update of the 1969 Lincoln Continental Mark III, while the bustleback tail, meanwhile, bore a startling (although apparently coincidental) resemblance to the contemporary Cadillac Seville. (According to freelance stylist Bob Marcks, the Imperial was based on a turbine-powered concept car he did for Chrysler in the mid-seventies; the Imperial does indeed look very much like that car, although Marcks was not involved in the Imperial’s design.) The results were striking, if not particularly tasteful.
Inside, the Imperial was pure science fiction, featuring Chrysler’s first digital instrument panel. Perhaps inspired by the Lagonda, this self-consciously futuristic device had enough buttons and electronic displays to make an F-14 radar intercept officer feel right at home; 1981 Imperial advertising modestly proclaimed the dash “an electronic marvel.” Lest anyone find the high-tech trappings too antiseptic, the interior was dressed up with color-keyed Mark Cross leather upholstery and carpet so plush it resembled fake fur. As a crowning touch, a gaudy Cartier crystal medallion was set into the steering wheel boss.
OL’ BLUE EYES: THE IMPERIAL FSIacocca confidently predicted that Chrysler could sell 25,000 Imperials a year, the maximum output of the Windsor, Ontario production line. He also enlisted his old friend Frank Sinatra to sing a jingle for the car, “It’s Time for Imperial,” a favor Sinatra reportedly performed for a token fee of $1 plus an early-production car. Old Blue Eyes also lent his name to the limited-edition “FS” package, which featured special “Glacier Blue” paint, matching interior trim, and a special Mark Cross leather case packed with cassette tapes of Sinatra’s greatest hits.
The 1981 Imperial was received gloomily by the press, which saw it as the wrong car at the wrong time. In an era of downsizing, the Imperial was unfashionably bulky; its heavy-duty body structure and everything-but-the-kitchen-sink standard equipment had swelled its curb weight to an even two tons. Even with the fuel-injected V8, the Imperial’s weight and ultra-tall gearing made acceleration a leisurely affair: With a 0-60 mph (0-97 km/h) time of around 13 seconds, Chrysler’s flagship could potentially be outrun by a manually shifted Plymouth Reliant and passing times were similarly sluggish.
The Imperial’s suspension and tires were calibrated for a pillow-soft ride, but the car lost its composure over sharp bumps or broken pavement. Stopping power was also poor, reflecting the fact that the brakes hadn’t been changed from the much-lighter Cordoba.
Unfortunately, given the state of the economy — not to mention that of Chrysler itself — the sales projections bordered on delusional. Even in its best year, sales of the earlier Imperial had never topped 25,000 and there was no evidence that buyers were clamoring for its return. Moreover, even better-established rivals were not doing well in that moment: Cadillac sales were down more than 40% and the downsized Lincoln Mark VI had just fallen almost 50%. Imperial production for 1981 tallied only 8,113 units, including Canadian sales.
Chrysler blundered further by hiking the 1982 Imperial’s price by a whopping $2,677. The price increase depressed whatever demand there may have been and sales plummeted to a meager 2,717. Before long, the company was offering rebates of up to $2,000. Recognizing the error, Chrysler slashed the base price of the 1983 Imperial to $18,688. Only 1,555 more cars were sold before Chrysler finally pulled the plug. (Sinatra fans may be dismayed to learn that a mere 516 of the 12,385 Imperials built had the FS package. The author has only seen one of these cars, although we were unfortunately unable to get pictures of it.)
A LONG WINTERDespite the new K-cars and the Imperial, Chrysler’s sales figures for 1981 were depressing: better than 1980, but still barely half those of 1977, which had been far from Chrysler’s best year. It was little surprise, then, that Chrysler’s losses for 1981 totaled $475.6 million. 1982 sales were even worse, although cost-cutting had lowered the corporation’s break-even point by more than 50% and held operating losses to $69 million.
The 1981-1983 Imperial proved to be a dead end. It was canceled after 1983 along with the slow-selling J-body coupes on which it was based (neither the Cordoba nor the related Dodge Mirada had sold well either). The Reliant and Aries survived with minimal changes through 1989, but they managed to sell at least 200,000 units a year through 1988 — respectable, if not outstanding.
The real significance of the K-cars was the host of derivatives they spawned. The humble K-car platform’s many adaptations included:
- The mid-size Chrysler E-class (LeBaron) and Dodge 400/600, which included the first American convertibles since 1976
- The “Euro-style” H-body five-door hatchbacks (Chrysler LeBaron GTS and Dodge Lancer)
- The sporty G-body Dodge Daytona and Chrysler Laser coupes
- The bizarre Chrysler Executive Sedan and Limousine
- The compact P-body Plymouth Sundance and Dodge Shadow (and their sporty derivatives), originally intended to replace the Omni/Horizon
- The E-body Dodge Spirit, Plymouth Acclaim, and Chrysler LeBaron
- The “near-luxury” AC-body Dodge Dynasty and Chrysler New Yorker
- The luxury-oriented Y-body Chrysler Fifth Avenue and Imperia
- The pricey Italian-American Chrysler TC by Maserati.
Together, the K-cars and the ill-fated 1981 Imperial make an interesting point about the importance of forward-looking product development. When the K-cars were developed in the seventies, they were extremely controversial within Chrysler. Their front-wheel-drive platform was expensive to develop, cost around $700 million, and Chrysler management favored a more conservative, rear-drive alternative, the H-body, which would have been about $300 million cheaper. (It likely would have been similar to Ford’s Fox platform, which spawned the Fairmont and Mustang III.) The H-body would have been the safe choice, but in retrospect, the K-car platform proved to be the best investment Chrysler ever made. By contrast, the Imperial must have seemed like low-hanging fruit, an easy way to milk some additional profits out of an existing platform, but it was a resounding dud.
In part one of our article on the Chrysler bailout, we mentioned that, contrary to popular belief, it was John Riccardo who approved the K-cars, not Iacocca. Had the choice actually fallen to Iacocca, he might well have made the same decision — he and Hal Sperlich had fought and lost a very similar battle at Ford over a K-car-like proposal called the Tiger platform — but by the mid-eighties, Iacocca was as resistant to new platforms as the management of the Riccardo era had been. Spinning off new variations on the K-car architecture was far cheaper than creating wholly new platforms, and some of the spin-offs were certainly clever, but Chrysler’s lineup was increasingly characterized by an overwhelming sense of déjà vu. In 1987, Car and Driver‘s Rich Ceppos compared Chrysler’s contemporary products to fast food hamburgers: You could order them in a variety of packages and configurations, but it was still the same meat underneath. That sameness would eventually cost Chrysler dearly.