LEE IACOCCA would like to keep on producing the Dodge Omni and Plymouth Horizon, the two cars that helped keep Chrysler alive during the dark days at the beginning of the '80s. He would shift production to the American Motors Corp. plant at Kenosha, Wis., already under contract to build the big - and still in demand - Chrysler New Yorker.

The decision hinges in part at least on still more government aid, this time as worker retraining funds from state and local governments. Like a strong drink, once you touch the government brew it's hard to give it up.

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