Leaner Chrysler emerges, but weak auto market takes toll

''We're half the size,'' asserts Chrysler Corporation vice-chairman Gerald Greenwald, ''but twice the company.'' In the last three years, Chrysler has:

* Cut its work force, blue collar and white collar, in half - from 160,000 to 80,000.

* Shut down 20 obsolete plants and upgraded the remaining 40 plants with state-of-the-art robot welders, computer-controlled engine and power-train test stands, and modern paint shops, including a major thrust at improving the quality of the product.

* Reduced the number of parts in its manufacturing system by a third, thus taking about $1 billion out of its inventory.

* Launched a five-year, $6.6 billion product program, the most ambitious in its history.

Yet what the Chrysler Corporation needs most of all is an 11-million sales year in passenger cars, says John B. Schnapp, vice-president of Harbridge House, a Boston consulting firm. Without a sharply higher auto-sales market in the US, all of the company's honing still leaves it in jeopardy.

''A rising sales tide would diminish some of its short-term vulnerability and help it sell more cars,'' he adds.

Without that kind of market volume, which the auto industry hasn't seen since 1973 and again in 1977-78, Chrysler has to be wondering what it can do for an encore after it runs out of ideas on its K-car derivatives.

Chrysler has about 10 percent of the car and truck market in the United States - ''against all odds,'' asserts Mr. Greenwald - and is now in the midst of a $6.6 billion new-product program that will bring a whole array of new vehicles and engines to the showroom over the next few years.

''Chrysler does have the product,'' declares Arvid Jouppi, a stock-market analyst with Rooney, Pace Inc., based in Detroit. ''It is proving what I think no one else in the industry has proved before - that you can get a lot of things off of the same platform.''

As a result, the company gets much more for its tooling dollar.

The sluggish auto market, however, continues to work against Detroit, and Chrysler Corporation, Mr. Schnapp insists.

''I think that Chrysler, despite its evident achievements, is still in a precarious state,'' he adds.

Although some see reason for optimism in increased auto sales the last quarter of 1982, Schnapp says the auto market shows little indication of significant improvement in 1983. But beyond that, Ford Motor Company will soon introduce a car that will compete head to head with the K-car. Later this year the Ford Tempo and Mercury Topaz will replace the aging Fairmont/Zephyr.

In the past, Ford and Chrysler have pulled sales away from each other in the compact segment of the marketplace. When Chrysler launched its Aspen/Volare, it had a couple of strong sales years, most of which came out of Ford's hide. Then when Ford introduced the Fairmont/Zephyr, it was Chrysler that felt the bite.

''The K-car position will be damaged to some degree by the new Ford products, '' Schnapp says.

Further, if the auto market is bogged down in the months ahead, Chrysler could be hard-put to expand its market share; and even to hold onto its position if the Ford product grabs the car buyer.

Chrysler chairman Lee Iacocca over the last three years took virtually all the chips at his command and threw them into the K-car program. Unfortunately, caught in a bad market, ''he didn't get the sort of leverage out of the move that he hoped and under more normal circumstances would have expected,'' says Schnapp.

''If the K-car program had been a reasonable success in a normal market, it would have begun to develop enough cash flow to feed Chrysler's appetite for capital which could be used to generate the product lines of the future.''

The new union contracts in both the US and Canada are costing Chrysler a lot of money that it hadn't counted on spending - about $125 million more a year. Instead of a $2.50-an-hour wage differential between General Motors and Chrysler , the gap now is no more than $1, according to estimates.

Meanwhile, Chrysler is in the process of revamping its long-term debt and cutting fat wherever it finds it. One recent plan involves a stock swap which would strengthen Chrysler's balance sheet and help pay $1.2 billion in federal loan guarantees. Banks and insurance companies would swap $1.1 billion in preferred stock for regular Chrysler common stock. The company has until 1990 to repay the government-backed bailout debts.