DETROIT — It took all the charm Lee Iacocca could muster to win a $1.5 billion federal bailout and keep Chrysler Corp. from bankruptcy in 1978. Now a new financial crisis threatens Chrysler, a unit of Germany's DaimlerChrysler AG, after what was to have been a “merger of equals” two years ago.

        It will take shrewd leadership and strong new products for Chrysler to survive the auto industry's continu- ing consolidation and brutal global competition, some experts say.

        “It's a serious problem. It's not necessarily a fatal one, but it could become one if they don't do something on an urgent basis,” said David Cole, director of the Center for Automotive Research at the Environmental Research Institute of Michigan.

        “There's nothing to get your attention focused like your impending hanging,” Mr. Cole said.

        Chrysler has known hard times before.

        The smallest of the Big Three U.S. automakers, it was caught unprepared in the 1970s by high gasoline prices and the public's shift to small cars.

        Chrysler's board turned to Mr. Iacocca, former president of Ford Motor Co., in 1978. He negotiated a bailout package that included plant closings and layoffs,

        worker concessions and federal loan guarantees.

        The company introduced K-cars, the Plymouth Reliant and Dodge Aries, front-wheel drive midsize cars with fuel-efficient engines, and minivans, which quickly replaced the station wagon as the family vehicle of preference.

        In 1983, it paid back guaranteed loans seven years early.

        But as trade barriers fell, competition became tougher than ever in the 1990s, and companies began to seek advantage through mergers and acquisitions, Mr. Cole said.

        Among those consolidations was the creation of DaimlerChrysler through the merger of Chrysler with Germany's Daimler-Benz AG in 1998.

        The new German-led company did not stop there, recently buying large stakes in Japan's Mitsubishi and South Korea's Hyundai. But the Mitsubishi and Hyundai acquisitions were a “tremendous drain on cash, as well as on management attention,” Mr. Cole said.

        Doug Fraser, former United Auto Workers president, said comparisons with Chrysler's brush with bankruptcy two decades ago are unwarranted.

        “This situation is not nearly as difficult as it was in 1979, '80 and '81,” he said.

        In the long run, what matters most is Chrysler's ability to develop and make vehicles that people want to buy, said analyst David Garrity of Dresdner Kleinwort Benson in New York.

        Chrysler will survive, but not necessarily in its present form as a unit of DaimlerChrysler, Mr. Cole predicted. DaimlerChrysler has denied it plans to unload Chrysler.

        If consumer confidence rebounds as a result of interest rate and tax cuts, Chrysler could emerge healthy and profitable, he said.

        “If it continues to fall, we've got a real problem,” he said.

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