Chrysler Gets South Korean Tank Contract

With car sales off, Chrysler Corporation relies on other ways to make a buck. Most recently, it has agreed to build a new tank for the South Korean military.

South Korea's ministry of national defense announced on January 21 that it had "authorized Chrysler Defense, Inc. to begin work on the engineering and development of a new combat tank intended for eventual use by the Korean Armed Forces."

"The cost is substantial," says Charles Jameson, an official at the security assistance agency of the U.S. defense department. It may run "in the tens of millions of dollars just to produce and test prototypes." Neither Chrysler nor representatives of the Korean government would comment on the precise terms of the contract.

Last year, South Korea received $161.5 million in U.S. foreign military credits to purchase U.S. defense equipment. The Korean Armed Forces would be eligible, Jameson says, to pay for the Chrysler contract with the U.S. credits.

Chrysler Defense, Inc. brings in about $80 million in net income each year, but Chrysler is negotiating to sell the unit to General Dynamics as means of easing the automaker's cash shortage.