New deals: the Chrysler revival and the American system.

• Author: Edsall, Thomas B.

New Deals: The Chrysler Revival and the American System.

New Deals: The Chrysler Revival and the American System. Robert R. Reich, John D. Donahue. Times Books, $17.95. At one level, this is an exceptionally detailed, and for the moment definitive, account of the federal rescue of the Chrysler Corporation. On another, and even more interesting level, the book is an attempt by one of the leading Democratic theorists of positive government to explore the reality of a major federal intervention in the marketplace.

The Chrysler story--described in New Deals with a combination of analytic skill, an eye for the telling anecdote and an understanding of detail and personality--is presented in four stages. They are: the deterioration of the number three automaker; the drive to gain federal support; the negotiations with stockholders, management, creditors and unions; and the aftermath of restored profitability. The second and third stages--the legislative process and the tough bargaining that followed--provide the most insight.

The central political strategy behind the Chrysler bailout was to persuade the administration and Congressmen that the legislation was in their self-interest. For Jimmy Carter, the legislation offered a means to try to retain the support of the United Automobile Workers in the face of a seemingly strong 1980 presidential primary challenge from Senator Edward M. Kennedy. For wavering members of the House and Senate, the corporation and its lobbyists put together detailed computer printouts showing, dollar by dollar, the cash flow from Chrysler to every supplier in every town in each district and state. To line up Democrats, Chrysler hired the lobbying firm of Patton, Boggs and Blow; for Republicans it was Timmons and Co. Joseph Ventura, who ran the Italian-American Foundation, backed by Lee Iacocca, put the arm on the 31-member House Italian-American caucus, persuading members to vote as a block for the bill. Even Gloria Steinem was brought into the battle to attempt to persuade prochoice advocate Senator Bob Packwood, although her efforts proved futile.

In the legislative process, two unlikely heroes emerge in the Reich-Donahue scenario: Democratic Senator William Proxmire and Republican Senator John Heinz. Widely thought of as lightweights --Proxmire as a self-indulgent gadfly, Heinz as a rich kid who bought himself a Senate seat--both men played significant roles. Proxmire, chairman of the Banking Committee, recognized that...