Chrysler Doubles Buyback, Boosts Dividend

The No. 2 auto maker said it will double its planned 1997 stock buyback to $2 billion and boost its dividend by 14%, moves underscoring its robust performance and continuing optimism despite signs of an industry slowdown. Chrysler Corp.’s focus on high-profit minivans, pickup trucks and sport-utility vehicles has allowed the company to post record earnings this year. The success has enabled the company to honor its pledge to return excess cash to shareholders, made when it was fighting off a takeover bid by its largest shareholder, Kirk Kerkorian, in April 1995. Since then, Chrysler has increased its dividend four times and purchased $3 billion worth of its stock. Chrysler also announced that President and Chief Operating Officer Robert Lutz, who is nearing the company’s mandatory retirement age for executives of 65, will shed his titles and become a vice chairman. The move allows him to continue to oversee the company’s development of new cars and trucks past his 65th birthday in February. Chrysler Chairman and Chief Executive Robert Eaton will assume the additional title of president. Shares rose 87.5 cents to close at $35.88 on the New York Stock Exchange.