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Chrysler Corporation

Volume 887: debated on Tuesday 25 February 1975

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asked the Secretary of State for Industry what are the terms of the reply he has received from the Chrysler Corporation of the USA in connection with his own request for information about the company's further operations in Great Britain; and whether he will make a statement.

The text is as follows:"Dear Secretary of State,We can understand your concern about the future of motor vehicle manufacturers in Britain and appreciate your continued interest in Chrysler United Kingdom.These are difficult times for the automobile industry in many parts of the world. Worldwide inflation, the energy crisis and the recession resulting from these two problems, has naturally affected the automobile industry more than most others because of its peculiar susceptibility to cyclical swings. Chrysler United Kingdom faces many of the same difficulties being faced by automotive manufacturers throughout the world.Chrysler United Kingdom has the facilities and capacity to participate fully in the British market. It forms an integral part of Chrysler's operation in Europe and its products are sold by Chrysler companies throughout the world. In addition, the company provides a manufacturing support base for many other companies. As you undoubtedly know, Chrysler United Kingdom shipments of vehicles to Iran establish the company as one of the world's largest KD automotive exporters to one customer. The growth potential in this programme with its attendant employment opportunities, continues to be most encouraging.In spite of these strengths, it is clear that the current times are very difficult for the company. We believe that for the benefit of the British economy and the company and its employees, dealers and suppliers, it is necessary that all of us do what we can to assist the company and the entire British automotive industry to reach its full potential. We have had to take a number of difficult steps to adjust to economic conditions in the United Kingdom. We are continuing to review the situation to see what additional steps have to be taken. In this regard, attention must be given to the fact that considering projected future industry sales, Chrysler United Kingdom has substantial excess average annual capacity for the assembly of built up vehicles.In summary, the strategy of the Chrysler companies, including Chrysler United Kingdom is to adapt their levels of production and related cost structures to enable them to operate profitably in the 'dramatically reduced markets' to which you refer in your letter.We will continue to work with all of the company's managers and employees to achieve maximum productivity in all of the company's operations. Ultimately, the success of the company, as well as the security of their jobs, rests on the ability of the company to produce efficiently and at costs that are competitive with other automotive manufacturers throughout the world. In the final analysis, it is only a successful, profitable company that can pay the high wages and other benefits that make life better for them. This is a message that we believe should be emphasised as strongly as possible, and we welcome the help of the Government in this regard.Sales of all motor products in the United Kingdom at this time are depressed. We recognise the causes of this situation and realise that they are essentially of a world-wide economic nature. Nevertheless, we have to sell our products both domestically and abroad, and in order to export successfully, we must first have a secure home market base. We hope, therefore, that the Government will pursue economic, monetary and taxation policies which will stimulate the purchase of motor vehicles. Special consideration should be given to reducing vehicle taxes and hire purchase restrictions. Increased sales of motor vehicles will provide increased job stability and assist us in our efforts to improve Chrysler United Kingdom's operations.Finally, we consider it essential that the Government do all in its power to foster a climate that provides incentive for investment. In addition to sound management and a productive work force, investment is necessary for economic improvement and the prospect of sound profits is necessary to encourage investment. Without the prospect of satisfactory profits, neither Chrysler United Kingdom nor any other company can be expected to undertake new investment. We believe it is essential that this be widely understood, and we would appreciate your help in this regard.In summary, Chrysler has a very substantial investment in the United Kingdom. Chrysler United Kingdom, along with other automotive manufacturers throughout the world, is currently facing difficult times. We intend to make every possible management effort to improve the situation as rapidly as possible and remain a strong competitor in the British market. The active support of labour and the Government is necessary to accomplish this task. We need and welcome your assistance in this endeavour.Sincerely Yours,JOHN J. RICCARDO."