Evening star., 1961-07-28
Colbert Quits
TopPositionsin
Chrys|er Corp.


Outside directors - men who
hold no management position
with the company-have taken
control of ChrySler Corp. for
the first time since the late
Walter ChrySler founded the
auto firm in 1925.
Following a meeting in New
York yesterday the corporation
announced the resignation of
L. L. (Tex) Colbert as chair
man, president, chief executive
officer, chief operating officer
and director.
The directors installed Lynn
"A. Townsend as president and
abolished the rest of Mr.. Col
bert'S jobs, even to reducing
permanently the number of
board members by one-to II.
Given New Position
For Mr.. Colbert they created
a new post-chairman of the
board of Chrysler of Canada,
Ltd. This will enable him to
keep his stock options (45,000
shares at $52.49 a share, slightly
above the present market price,
and to remain eligible for his
Chrysler pension ($92,250 a
year when he retires nine years
hence).
The action came exactly one
year after Chrysler disclosed it
had fired its previous president,
William C. Newberg, because he
owned half interests in two
companies whose sole business
was making parts for Chrysler.
Mr. Newberg had been Mr..
Colbert's personal choice and
close friend.
Mr.. Newberg was dismissed
June 80. 1860, but itewas not
until July 20 that the corpora
ton spelled out the reason.
After Mr.. Newberg, Chrysler
tried without success to lure top
men from other auto companies
as president with Mr.. Colbert
to remain as board chairman.
Legal Actions Filed
Meanwhile lawsuits against
Mr.. Colbert and the directors
by dissident stockholders COM
planning about the management
began to pile up.
Last fall q committee of the
outside directors set out to find
a new man. Mr.. Townsend, a fl
nancial expert who Joined the
company in 1857, was told early
this week he was their choice.
Mr.. Townsend's elevation
came concurrently with the
companys announcement it had
made $6.2 million profit in the
second quarter of 1861. Chrysler
lost $21.9 million in the first
quarter.
Mr.. Townsend, AZ, who be-
came administrative vice pres
ident last December, has been
the chief architect of q dras-
tic coSt-cutting program at
ChrySler.
Mr.. Colbert. returning to De-
troit last night from the
meeting, said decisions such as
that were up to the committee. :"
In his letter of resignation Mr..
Colbert said in part: 81
Personal Considerations Aside
a.. Any personal desires on
my part to continue to head
the company should give way
to considerations of what seems
to be best for the company, its
employees, its stockholders and
its dealers"
Both Mr.. Colbert and Mr..
Townsend refused to elaborate
on the meeting. So did George
H. Love of Pittsburgh, who be-
came chairman of the new
executive committee of the cor
poration. In addition to Mr..
Love its members are r. E. Nc
Neill of New York, Juane Trippe
of New York, L. F. McCol-
lum of Houston and MIR. Town
send.
When the Chrysler board
meets. Mr.. Love will preside.
He said he will resign as chair
man of M. A. Hannah Co. and
as director of National Steel
Corp. to devote more time tc
Chrysler.
From its inception until the
past April, Chrysler's board has
been dominated by company
employees and controlled by the
president or board chairman
who had the power to fire
such employees.
In April the board offered a