
In 1979, Chrysler was on the brink of bankruptcy. In 1980, the government bailed them out of a $1.5 billion hole. By 1983, Chrysler had released the first minivan, earning them $300,000,000. How did the minivan save Chrysler?
Near Bankruptcy
Chrysler’s rough financial straits began in the 60s when, in an effort to try and catch its competitors, it tried to expand domestically and worldwide. They were unable to. In the 70s, there were between 3 recessions, 2 energy crises, and new environmental and fuel standards. That’s not even mentioning competition from Japanese and German compact cars. Chrysler couldn’t compete, and was bailed out by the government.
Why Did the US Bail Chrysler Out?
The Government intervened because at the time, Chrysler had a contract to build tanks. This was at the height of the Cold War, and the US was trying to prepare for anything. The government also feared a loss of jobs in the Chrysler factories and their suppliers. Lastly, they hoped the bail out would boost the quality of American cars. At that time, American cars were struggling with pressure to downsize vehicles in the face of fuel crises and environmental standards.