Carter saved Chrysler from bankruptcy in 1979, and his push for fuel efficiency transformed the auto industry
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Jimmy Carter, who served as president from 1977 to 1981 and died on Dec. 29, 2024, is remembered for significant achievements, including brokering the Camp David Accords, which led to a peace treaty between Egypt and Israel.
He also returned control of the Panama Canal to Panama under the 1977 Torrijos-Carter Treaties, a decision that was heavily criticized by opponents who argued it weakened U.S. strategic interests. The controversy has resurfaced recently after Donald Trump suggested the U.S. should regain control of the canal.
Carter also pardoned Vietnam War draft evaders and established the Departments of Energy and Education. After leaving office, he made a lasting impact with his humanitarian work, particularly with Habitat for Humanity. In 2002, he was awarded the Nobel Peace Prize.
Less often recognized is Carter’s profound impact on the auto industry, particularly his efforts to save Chrysler from bankruptcy and his push for more fuel-efficient vehicles.
 Jimmy and Roslynn Carter surprised onlookers when they left their car and walked down Pennsylvania Avenue during the Inaugural Parade on January 20, 1977. |
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When Carter defeated former U.S. President Gerald Ford in the 1976 election, car sales in the U.S. were strong. That trend continued into 1977 and 1978. However, sales dropped in 1979 to 8.3 million units, about one million fewer than the previous year. The decline was driven by a slowing economy and growing consumer demand for fuel-efficient imported cars.
The situation worsened during the 1979 oil crisis, triggered by reduced production in Iran and Iraq. World oil prices soared, and long lineups returned to gas stations, reminiscent of the 1973 crisis. Sales of larger vehicles plummeted as consumers opted for smaller, more fuel-efficient models.
With about half of the U.S. oil supply coming from foreign countries, Carter viewed dependence on foreign oil as a national security risk. To address this, he established the Department of Energy and introduced a national energy policy focused on conservation. He also championed legislation requiring automakers to produce more fuel-efficient vehicles.
In July 1979, Carter delivered a televised address urging Americans to reduce their energy use and outlined plans to cut oil imports and improve energy efficiency.
The oil crisis hit Chrysler particularly hard. Unlike Ford and General Motors, Chrysler’s lineup mainly consisted of large vehicles, and the company lacked the financial resources to pivot to smaller, fuel-efficient models.
Lee Iacocca, known for creating the Ford Mustang, became CEO of Chrysler in November of 1978, just as the automaker’s financial woes deepened. Despite layoffs, plant closures, and asset sales, the company faced bankruptcy.
Iacocca sought government assistance, warning that Chrysler’s collapse could cost 200,000 jobs across its plants, dealerships, and suppliers. Congress approved $1.5 billion in loan guarantees, and Carter signed the Chrysler Corporation Loan Guarantee Act on Jan. 7, 1980.
“This legislation will preserve 200,000 American jobs in manufacturing, suppliers, and dealerships,” Carter said at the time.
The bailout allowed Chrysler to stay afloat and bring the Dodge Aries and Plymouth Reliant to market – small, front-wheel-drive cars known as the K-Cars. These models, along with the Dodge Caravan and Plymouth Voyager minivans that followed, became market successes. Chrysler repaid the loans by 1983, and Iacocca later described Carter’s support as a turning point in American capitalism.
Carter’s actions set a precedent for the 2008-2009 financial crisis when both Chrysler and General Motors faced bankruptcy. Their bailouts might not have happened without Carter’s intervention in the 1970s.
Moreover, Carter’s push for energy efficiency has had a lasting impact. Today’s vehicles are far more fuel-efficient thanks to the standards he championed.
Carter’s legacy extends far beyond the White House, but his contributions to the auto industry remain a testament to his foresight and leadership during a challenging era.
Dale Johnson is an award-winning author, broadcaster and journalist who has worked in TV, radio, print and online.
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