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The company could barely pay suppliers and creditors. It had cut its staff to the bone. It was sitting on a perilously excessive inventory. Dealers were ready to abandon the brand. But Chrysler, its 4,700 dealers, and 19,000 suppliers employed a total of almost a half-million people, and U.S. President Jimmy Carter didn’t want the company to sink.
Chrysler’s board approached Booz Allen to help it prepare a request that the U.S. government guarantee $750 million in loans. Treasury Secretary G. William Miller, considering the proposal, turned to Booz Allen for further help. Would that cash influx be enough for the car company to regain its viability? A Booz Allen team had 2 weeks to evaluate the company’s plan. But Chrysler had no plan. Its leaders seemed to think the money alone would suffice. Nor did anyone—except for Iacocca—want to hear about change. The Booz Allen team reported that the company would be difficult to rescue, but agreed to help.
“A Booz Allen team had 2 weeks to evaluate the company's plan. But Chrysler had no plan. Its leaders seemed to think the money alone would suffice. Nor did anyone—except for Iacocca—want to hear about change.”
The government approved a $1.5 billion loan guarantee, and Booz Allen took on a complex advisory role, overseeing Chrysler's recovery process and periodically affirming that the Treasury Department could safely release more money to Chrysler. Meanwhile, Iacocca drove the turnaround. He talked unions into concessions, dealers into extending payments, and the buying public into reconsidering the product line. He raised $300 million by selling assets. He brought in quality production people, and promoted innovative new models such as the minivan. He symbolically passed up his own salary and visibly demonstrated that American manufacturing could regain its pride. In 1983 Chrysler paid off the last of its guaranteed loans, 7 years ahead of schedule.