Making cars smaller (downsizing) can pay huge dividends in improved performance, better fuel economy, and lower emissions — but if the public doesn’t accept it, it can cost you dearly. To understand why Detroit has always been afraid of smaller cars, we need look no further than Chrysler’s ill-fated 1962 Dodge and Plymouth — Detroit’s first downsizing disaster (albeit one with an unexpected silver lining.
SLINGS, ARROWS, OUTRAGEOUS FORTUNE
The 1950s were, as author Charles Hyde aptly put it, a roller-coaster ride for Chrysler. The beginning of the decade had been rough: all of Chrysler’s brands lost market share at an alarming pace, thanks in large part to stodgy, dated styling. Finally, in late 1952, company president K.T. Keller authorized Virgil Exner, then the head of Chrysler’s small advanced styling studio, to dramatically redesign the company’s entire line-up.
Chrysler spent $100 million on Exner’s “Forward Look” styling, which paid off with nearly doubled sales for 1955 and 1956. Emboldened, Exner called for another total redesign for 1957, with striking results. Added to the new “Torsionaire” torsion bar suspension and superb TorqueFlite automatic transmission, Chrysler had the hottest products in the domestic industry.
The company should have been rolling in money by decade’s end, but all was not well in Highland Park. Chrysler recorded a $120 million profit for calendar year 1957, but labor and materials problems meant that many of the flashy ’57 cars were already falling apart before they even left the showroom floor. The facelifted 1958 models were better-built, but still suffered alarming corrosion and the problems of the ’57s had left buyers in a sour mood. When the Eisenhower recession hit that fall, sales sank sharply and Chrysler took a bath to the tune of $33.8 million — the equivalent of about a quarter of a billion dollars today. Losses for ’59 weren’t as bad, but still totaled $5.4 million.
Chrysler’s president in those days was Lester L. “Tex” Colbert, a former Dodge executive who had succeeded K.T. Keller in 1957. By 1960, Colbert was preparing to move from the presidency to the chairmanship of the Chrysler board. His chosen successor was the company’s executive vice president, William C. Newberg. In true old-boy’s-network fashion, Colbert and Newberg were close friends. They lived a few blocks apart in Detroit’s Bloomfield Hills suburb, they belonged to the same country club, and their wives were friends. Newberg had succeeded Colbert as head of Dodge in 1950 and when Colbert ascended to the presidency, Newberg became executive vice president. In due course, he was promoted to the corporate presidency on April 28, 1960.
THE INCREDIBLE SHRINKING CHEVY
Not long after assuming his new office, Newberg attended a Detroit garden party where he overheard Chevrolet general manager Ed Cole discussing the new, small Chevy the division was planning to launch for the 1962 model year. Only six months earlier, Chevrolet — like Ford and Chrysler — had launched its first compact car, the Corvair. Now, Newberg thought they were going to follow suit by downsizing their full-size cars as well.
At the time, Newberg’s conclusion did not seem as outlandish as it may seem in retrospect. In the wake of the recession, American Motors’ Rambler line, most of which consisted of compact cars, had risen to fourth place in industry sales, nipping at Plymouth’s heels. (It would briefly displace Plymouth in the No. 3 spot for the 1961 model year.) Small imported cars had seen unprecedented sales growth, something that would have been almost unimaginable 10 years earlier.
Meanwhile, Detroit had been regularly savaged by critics for allowing its bread-and-butter cars to get too big. Even some in the auto industry suspected that the dismal sales of 1958 had stemmed from public dissatisfaction with what George Romney had called “Detroit Dinosaurs.” The idea that Chevrolet might scale back for 1962 was not entirely far-fetched. In fact, the 1961 Chevrolet line, which appeared a few months later, wassmaller than before, albeit only by about 1.5 inches (38 mm) in overall length.
What Newberg apparently didn’t grasp was that Cole was actually talking about the all-new Chevy II, a conventional, front-engine compact that was then being readied as an alternative to the rear-engine, air-cooled Corvair, whose sales had been disappointing. Others within Chrysler were probably aware of the Chevy II or could have found out easily enough — the Detroit auto industry is an insular world and unless a company makes a deliberate effort to keep a project secret, gossip spreads rapidly. Unfortunately, instead of investigating, Newberg ordered a crash program to make the 1962 Dodge and Plymouth lines smaller.
By the time Newberg issued those orders, the design work on the 1962 models was basically complete and the cars were only a few months away from production. To redesign them in time for the start of production — only about a year away — the styling department had to go to double shifts, working around the clock to alter the dimensions of the previously approved designs.
Those designs were not, in our view, Virgil Exner’s finest hour. After trumping GM in 1957, Exner seemed to be struggling for a new direction. His “S-series” designs took themes developed for the compact Valiant and expanded on them for the bigger cars. That was a curious decision; GM styling usually went in the opposite direction, introducing new concepts on Cadillacs and then filtering them down through the cheaper brands. Even if the designs hadn’t been tampered with, the 1962 Dodge and Plymouth lines would have been odd-looking. As they emerged, they were aesthetic disasters.
To save time and reduce costs, big 1962 Dodges and Plymouths were moved to a stretched version of the Valiant/Lancer compact shell. This had the effect of making the new cars considerably smaller than originally planned: Wheelbase was reduced from the planned 119 inches (3,023 mm) to 116 (2,946 mm); overall length shrank by 7.5 inches (190 mm); and width was reduced by about 4 inches (100 mm), with a less than felicitous effect on the cars’ proportions.
To make matters worse, the engineering staff was standing over the stylists’ shoulders throughout the process looking for ways to cut production costs. This cost-cutting push led to the deletion, late in the development process, of various planned features, including curved side glass, wraparound bumpers, and an attractive new hardtop roofline. Exner, horrified, insisted that the results would be a commercial debacle and declared that his styling staff should not be held responsible.
Curiously, to our knowledge, no one — other than Exner, whose protests fell on deaf ears — thought to question Newberg’s actions or, it appears, to even investigate the rumor that had provoked that decision. Indeed, many Chrysler executives had apparently convinced themselves that the downsized ’62s would be big hits.
Even as this disaster was taking shape, a different crisis was brewing. At Chrysler’s annual shareholders meetings in 1959 and 1960, stockholder Solomon Dann accused Tex Colbert of mismanagement and charged that Chrysler executives were handing out contracts to suppliers in which those executives had a personal stake, driving up the company’s costs in order to line their own pockets. Those accusations prompted influential shareholder George Love, chairman of Iowa’s Consolidation Coal Company, to recommend in April 1960 that the Chrysler board commission an independent audit.
The audit, conducted by the accounting firm Touche, Ross & Co., discovered evidence that Bill Newberg and his wife Dorothy had interests in three different automotive suppliers whose Chrysler contracts had earned the Newbergs some $455,000. They were not the only Chrysler executives to profit in this way; Colbert later admitted that his wife Daisy had owned stock in a different Chrysler supplier, the Dura Corporation.
With the stockholders already in an uproar and Sol Dann and his supporters threatening legal action — Dann and several other stockholders filed numerous lawsuits and later that year mounted an unsuccessful attempt to force Chrysler into receivership — the board realized something had to be done. On June 30, Newberg was fired after only 64 days as Chrysler’s president. At the same time, Colbert ordered other Chrysler executives to immediately divest themselves of any financial interests in Chrysler suppliers.
Newberg complained loudly and publicly that he was just a scapegoat for a larger problem and alleged that Colbert had asked him to take the fall for the conflict-of-interest scandal, promising that Newberg would be taken care of financially. Newberg also claimed that Colbert had been well aware of the Newbergs’ outside interests and that Daisy Colbert had even asked Newberg if one of his companies could give the Colberts’ son a summer job. In January 1961, Newberg filed a $5.3 million unfair termination lawsuit against Chrysler, naming Colbert as a correspondent. Later that year, the two former friends had a chance encounter in a country club locker room, where Newberg allegedly punched Colbert in the face.
Colbert denied Newberg’s allegations, but questions about Colbert’s own supplier interests remained, particularly after syndicated newspaper columnist Drew Pearson revealed that Colbert’s office safe contained $200,000 in bearer bonds whose source Colbert declined to reveal. Although Colbert continued to deny any wrongdoing, he stepped down as president in July 1961, accepting a new post as president of Chrysler Canada. He retired four years later at the age of 60. Newberg’s lawsuit was not resolved until 1970, when he and Chrysler agreed to settle out of court.
THE PLUCKED CHICKENS TAKE FLIGHT
With Colbert’s departure, George Love, now chairman of the board, promoted administrative vice president Lynn Townsend as Chrysler’s new president. By then, the downsized 1962 Dodge and Plymouth, which Virgil Exner, Sr. had fatefully nicknamed “plucked chickens,” were just entering pilot production.
The dealer introduction, which took place shortly after Townsend took office, went badly. Dealers had not been particularly fond of Chrysler’s 1961 styling and were positively dismayed by the ’62s. The negativity was understandable; car salesmen and advertisers had been telling American consumers for years that bigger was better. Now, Dodge and Plymouth dealers were being asked to sell cars that were not only visibly smaller than the competition, but that also looked like overgrown, mutant versions of the compact Valiant. For all that, the ‘big’ 1962 Dodge and Plymouth still cost as much as a full-size Chevrolet or a Ford (and almost as much as a Pontiac Catalina), but were closer in size to Ford’s new mid-size Fairlane or GM’s Buick, Oldsmobile, and Pontiac “senior compacts.” It was not a recipe for commercial success.
As the dealers stewed, Townsend embarked on a ruthless cost-cutting spree. Factories and offices were shuttered and around 7,000 white-collar employees were laid off. The cuts were painful, although they reduced Chrysler’s annual operating costs by more than $100 million.
By the end of 1961, it was clear that the dealers’ reaction to the 1962 models had been prophetic. Sales of the big Plymouths were down 13% from the already-mediocre ’61 tally, falling from about 207,000 to fewer than 183,000. Dodge dropped from about 198,000 to around 159,000. At the same time, sales of Chevrolet’s big cars — which had not been downsized after all — soared to 1.4 million, almost 20% better than 1961.
As you might imagine, a sales decline of almost 25% had Dodge dealers screaming for relief. Chrysler responded by cobbling together a new full-size Dodge, the 1962 Dodge Custom 880, which went on sale in February 1962. It was contrived by combining the body of the Chrysler Newport (which the big Dodge line had previously shared) with a lightly made-over front clip from the 1961 Dodge.
The Custom 880 was well received by Dodge salesmen, who sold more than 17,000 of the new cars despite the late introduction. However, the Custom 880 sat ill with Chrysler dealers, who felt that Dodge was now encroaching on their turf.
Chrysler’s sales revenues for the 1961 calendar year (which included the second half of the 1961 model year and the first few months of the calamitous 1962 cars) were even lower than 1959, but Townsend’s cuts and layoffs meant that Chrysler actually ended 1961 $11 million in the black.
SHOOTING THE MESSENGER
Although Tex Colbert had assured Virgil Exner that he would not be held responsible for the design of the 1962 Dodge and Plymouth, Chrysler’s board wanted someone held accountable for their failure and the man most responsible, Bill Newberg, was long gone. In November 1961, Lynn Townsend fired Exner — a bitter irony considering how strenuously Exner had protested the redesign program. Exner was allowed to remain in a nominal consultant role until his 55th birthday so that he could collect his Chrysler pension. He and his son launched their own design firm, Virgil M. Exner, Inc., in early 1962.
In a further irony, Exner’s designs for the 1963 models proved to be very successful. His replacement, former Ford stylist Elwood P. Engel, made very few changes to Exner’s designs, which were popular enough to boost Dodge sales by 86% and Plymouth sales by 44% for 1963. The 1963 Plymouth line retained the 116-inch (2,946mm) wheelbase of the ’62s, although they were 3 inches longer overall. The standard-size 1963 Dodge line was stretched to a 119-inch (3,023mm) wheelbase; the big 880 retained the 122-inch (3,099mm) wheelbase introduced the previous year.
In 1965, Chrysler restored a restyled version of the short-wheelbase car (now known as the B-body) to the Dodge line, this time advertising it as the intermediate Dodge Coronet. Meanwhile, the ’65 Plymouth Fury was moved to the big corporate C-body. The Belvedere series remained on the shorter platform, now also rechristened a midsize rather than a full-size car. As a result, both divisions now had a full array of models in compact, intermediate, and standard sizes, putting both brands in a better competitive position.
SMALL MINDS AND BIG IDEAS
In the movie business, the commercial failure of a project will often cast a pall over similar projects for years to come. When Cutthroat Island tanked in 1995, for example, pirate movies were considered box office poison until the first Pirates of the Caribbean movie made a mint in 2003. Similarly, the failure of the 1962 Dodge and Plymouth were cited many times in in the sixties and seventies as reasons Americans wouldn’t accept smaller cars, at least prior to the 1973 OPEC oil embargo.
That conclusion, which remains the conventional wisdom in most automotive histories, doesn’t hold up to close scrutiny. The year before, Buick, Oldsmobile, and Pontiac had trimmed almost 5 inches (127 mm) from the overall length of their full-size cars, which had done their business no particular harm; their sales were down, but more as a result of a general economic slump that affected all automakers than anything else. In the 1962 model year, U.S. automakers sold around 2 million compact cars, accounting for almost a third of all domestic auto sales. AMC’s Rambler line — the largest of which was a full 12 inches (305 mm) shorter than the Dodge and Plymouth standards — outsold Plymouth five to four, to say nothing of the almost 200,000 Volkswagens sold stateside that year.) Clearly, the American public was not categorically opposed to the idea of smaller cars. The fundamental problem with the 1962 Dodge and Plymouth was not their size; it was that they were ugly and seemed like poor value next to their Chevrolet, Ford, and AMC competition.
Even if Newberg’s assumption that Chevrolet was about to downsize had proven correct, his response would have been ill-advised. If Chrysler had created cohesive designs for downsized standard-size cars, it might have been a different story, but it’s hard to understand how anyone seriously expected that these cars would stand a chance against even an awkwardly downsized Chevrolet. The 1962 Dodge and Plymouth also suffered from the fact that Chrysler’s marketing made no great effort to educate buyers on the virtues of a smaller big car, such as ease of parking or the better gas mileage and performance made possible by the reduced curb weight. Instead, the company simply dumped these cars on the market as if they were business as usual, expecting their dealers and salespeople to sort it out. Worse, the board fired the only person who had been brave enough to point out the holes in the plot.
The arrival of Lynn Townsend proved to be a mixed blessing. Townsend, who made the cover of TIME in December 1962 for his role in Chrysler’s recovery, managed to restore the company to profitability despite the dismal sales, but only at the cost of thousands of jobs. By most accounts, Townsend was a better accountant than a manager and his regime brought about a deep-seated conservatism that did Chrysler no favors in the years to come. Other than the revival of the Hemi engine and a few stand-outs like the 1968-1970 Dodge Charger, the Townsend era was marked by a general stagnation in engineering, styling, and product planning. By 1969, the stage had been set for Chrysler’s late-seventies near-death experience.
A few generous souls have called the 1962 Dodge and Plymouth the right cars at the wrong time. We would call them a missed opportunity — a blunder whose consequences reverberated throughout the American industry for decades to come.
NOTES ON SOURCES
Our sources for this article included the Auto Editors of Consumer Guide, “1962-1964 Dodge Polara 500,” HowStuffWorks.com, 9 October 2007, auto.howstuffworks. com/ 1962-1964-dodge-polara-5002.htm, accessed 11 January 2009; “1962-1964 Dodge 880,” HowStuffWorks.com, 23 August 2007, autos.howstuffworks. com/ 1962-1964-dodge-880.htm, accessed 9 January 2009; and Encyclopedia of American Cars: Over 65 Years of Automotive History (Lincolnwood, IL: Publications International, 1996); “Car Life Road Test: Dodge Custom 880,” Car Life Vol. 9, No. 6 (July 1962), pp. 46-49; “Chrysler Fights Back,” TIME 19 January 1962, www.time. com, accessed 10 January 2009; “Chrysler’s Troubles (Contd.),” TIME 3 February 1961, www.time. com, accessed 10 January 2009; David R. Crippen, “The Reminiscences of Virgil Max Exner Jr.,” Automotive Design Oral History Project, 3 August 1989, Accession 1673, Benson Ford Research Center, www.autolife.umd.umich. edu/Design/ Exner_interview.htm, accessed 10 January 2009; James M. Flammang and the Auto Editors of Consumer Guide, Chrysler Chronicle: An Illustrated History of Chrysler – DeSoto – Dodge – Eagle – Imperial – Jeep – Plymouth (Lincolnwood, IL: Publications International Ltd., 1998); Milt Freudenheim, “Lester Lum Colbert, 90, Chief at Chrysler During the 1950’s,” The New York Times 19 September 1995, www.nytimes. com, accessed 11 January 2009; John Gunnell, ed., Standard Catalog of American Cars 1946-1975, Rev. 4th Edition (Iola, WI: Krause Publications, 2002); Ed Hoyt, Bill Newberg obituary, Skagit River Journal, 12 Dec. 2003, www.stumpranchonline. com/skagitjournal/, accessed 21 April 2015; Charles K. Hyde, Riding the Roller Coaster: A History of the Chrysler Corporation (Great Lakes Books) (Chicago, IL: Wayne State University Press, 2003); Joseph Kraft, “The Downsizing Decision,” The New Yorker 5 May 1980, www.newyorker. com, accessed 15 June 2015; Michael Lamm and Dave Holls, A Century of Automotive Style: 100 Years of American Car Design (Stockton, CA: Lamm-Morada Publishing Co. Inc., 1997), pp. 151-171; “Middle-Sized Gamble,” TIME 15 September 1961, www.time. com, accessed 11 January 2009; “Payola at Chrysler,” TIME 1 August 1960, www.time. com, accessed 9 January 2009; “Payola at Chrysler (Contd.),” TIME 22 August 1960, www.time. com, accessed 9 January 2009; “Newberg Attacks Chrysler,” TIME 27 January 1961, www.time. com, accessed 9 January 2009; Melody Petersen, “Lynn Townsend, Ex-Chrysler Chief, Dies at 81,” New York Times 22 August 2000, www.nytimes. com, accessed 11 January 2009; Curtis Redgap, “Chrysler Corporation R Bodies: 1979-1989 Downsized, Full-Sized Cars,” Allpar, 2008, www.allpar. com, accessed 11 January 2009, and “Insider’s History of Plymouth,” Allpar, n.d., www.allpar. com, accessed 9 January 2009; “The Battle at Chrysler,” TIME 2 May 1960, www.time. com, accessed 9 January 2009; “The Man on the Cover: Lynn Townsend & Chrysler’s Comeback,” Time 28 December 1962, www.time. com, accessed 11 January 2009; “Time Clock: Feb. 17, 1961,” TIME 17 February 1961, www.time. com, accessed 11 January 2009; Jim Wright, “Plymouth Sport Fury,” Motor Trend April 1962, reprinted in Plymouth Fury Limited Edition Extra 1956-1976, ed. R.M. Clarke (Cobham, England: Brooklands Books Ltd., ca. 2002), pp. 46-51; Richard A. Wright, “Chapter 13 – Dinosaur slayer falters; car guys vs. money men,” A Brief History of The First 100 Years of the Automobile Industry in the United States, The Auto Channel, 1996, www.theautochannel. com, accessed 11 January 2009; David Zatz, Lanny Knutson, and Dave Stern, “Chrysler Corporation 1962: The right cars for the wrong time,” Allpar, 2006, www.allpar. com, accessed 9 January 2009; and David Zatz and Bill Watson, “The Early (Big) 1960-1962 Dodge Darts,” Allpar, n.d., www.allpar. com, accessed 10 January 2009.
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