Chrysler Chief Assails Attacks on Big Business

Chrysler Corp. Chairman Robert Eaton defended corporate America on Monday, arguing that big business has been unfairly maligned for focusing on profits and slashing tens of thousands of jobs.

“Downsizing and layoffs are part of the price of becoming more competitive,” Eaton said. “The price of not doing it, however, is much higher in both economic and human terms.”

In a sharply worded speech to the Economic Club of Detroit, Eaton lambasted what he called the “demonization” of American corporations by Republican presidential hopeful Patrick J. Buchanan and other candidates and by the media.

“It’s open season on big business and CEOs,” Eaton said. “This is old-fashioned, empty-headed, tub-thumping Populism.”

Companies should not be in business for the sole purpose of providing jobs or focusing on socially responsible issues, according to Eaton.

Drawing a contrast between shareholders who own companies and stakeholders who have a broader interest in those firms, Eaton said properly run firms that build for the future will as a matter of course create jobs and contribute in other ways to their communities.

As an example, Eaton said Chrysler will soon make $5 million in grants to arts groups in southeastern Michigan.

“But nowhere in our strategic planning did we say, ‘Take care of the arts.’ We’re able to do it only because we focused on a different priority--financial success,” Eaton said.

Part of that means paying attention to large institutional investors, who Eaton said have grown to play an increasingly large role in how executives manage their business.

Those institutions focus on short-term returns, Eaton said, often forcing changes on large corporations to reach those targets. But in so doing, they are responding to the needs of the financial markets--where nearly a third of adult Americans have investments.

“If we don’t like the kind of pressure these funds put on our companies, we can’t point fingers,” Eaton said. “ ‘Them’ is us.”