Iacocca, Lee (1924—)

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Iacocca, Lee (1924—)

Lee Iacocca grew up as a blunt-spoken, patriotic son of immigrants, and rose to become president of the Ford Motor Company and later, chief executive officer of the Chrysler Corporation.

Born Lido Anthony Iacocca in Allentown, Pennsylvania, in 1924, Iacocca earned an engineering degree from Lehigh University and a masters degree from Princeton University before joining Ford Motor Company as a student engineer in 1946. After less than a year he talked his way into a sales job and, at the age of thirty-three, became the head of all national car marketing at the company's Detroit headquarters. He became vice president and general manager of the Ford Division in 1960.

In his new position, Iacocca recognized the growing power of the youth market and organized a team to design a car for it. Iacocca repackaged the engine and platform from the moderately successful Ford Falcon and placed it within a European-inspired, stylish shell. The result was the Mustang, a small car that sat four people and weighed less than most cars on the road. At $2,300 each, Ford sold more than four hundred thousand Mustangs in 1964, its first model year. The car's styling captured the excitement of youth. The average age of car buyers was thirty-one. Soon Mustang clubs sprang up around the country, and Mustang paraphernalia such as key chains and hats were suddenly available everywhere. A picture of the Mustang ran simultaneously on the covers of both Time and Newsweek, and Lee Iacocca also appeared in it.

In 1970, Iacocca was named president of Ford, second in the company only to Chairman Henry Ford II. Iacocca soon brought out another successful car, the Cougar, as well as a large failure, the Pinto. When Iacocca's aggressive ambition and showboating drew the ire of Ford, a power struggle developed between the two men. As each attempted to outmaneuver the other, Ford installed other executives above his former number-two man. In 1978, Iacocca was fired. Ford Motor Company had earned profits of $1.8 billion in each of the previous two years.

Iacocca soon accepted the position of CEO at the unprofitable and debt-ridden Chrysler Corporation across town. He was famous when working at Ford, but at Chrysler, Iacocca built himself into a celebrity. The car industry in America traditionally represented the best successes of American capitalism. But, by the 1970s, it had come to signify inefficiency and the abdication of America's economic leadership role to international, or "foreign," competition. When Iacocca took over Chrysler, it was the smallest of the "big three" American automakers and was rapidly losing money and market share.

Iacocca made a number of radical, public steps to turn the company around. He did what was then unthinkable and lobbied the American government to bail Chrysler out of its financial problems. After a protracted public debate in the media and on Capitol Hill, both houses of Congress approved $1.5 billion dollars of loan guarantees for the company. Iacocca won discounts from his suppliers, wage concessions from his workers, and loan payment reschedulings from Chrysler's creditors. These actions were unprecedented. The auto industry had traditionally fought government interference and proudly recalled the day Henry Ford shocked the country by doubling his workers' wages. Its executives had boasted of how America's prosperity was tied to its successful auto industry.

As part of his aggressive salvage effort, Iacocca put a face on America's tenth largest corporation, appending his signature to Chrysler print ads, and personally appearing in its television ads. He played the role of the blunt, tough-talking, honest businessman by challenging the public, "If you can find a better car—buy it!" He not only personalized the fight to save Chrysler as his fight but represented it as America's fight to save itself. In Chrysler's television ads he appeared surrounded by red, white, and blue, entreating viewers, "Let's make America mean something again." Iacocca's public persona was the right image at the right time. Under Ronald Reagan, a wave of patriotism swept the country, and the American carmaker's challenge to be proud of America and its products was met with a warm response.

In 1980, Chrysler released its line of utilitarian K-cars, similar in build to Iacocca's beloved Mustang but its polar opposite in terms of character and style. The K-cars were boxy, plain, and functional. They were spare, restrained cars for a time of diminished economic expectations. Iacocca, ever the patriot, boasted that, though they were small and light, they were still "big enough to hold six Americans." His next move was to introduce the nation's first minivan. It was wildly successful, and other automakers soon released their own versions.

By 1984, the Chrysler Corporation had paid back its loans seven years early and was a remarkable success story by any measure. Iacocca was treated as a national hero and was considered a possible presidential candidate. In the mid-1980s, he published a best-selling autobiography and served as chairman of the commission that renovated the Statue of Liberty.

Iacocca retired from Chrysler in 1992. After his departure, he publicly criticized the new management's efforts to improve quality and, in 1996, joined an investment group seeking to acquire the automaker. The effort failed and, ironically, earned him such enmity from within Chrysler that it canceled plans to name its new headquarters after him.

As the father of the Mustang, Iacocca considered himself a "car man" who disdained the "bean counters" at Ford and understood what made automobiles magical and exhilarating to Americans. Though he depended on the government, his workers, his creditors, and his suppliers to help Chrysler out of trouble, his unabashed challenge to be proud of America and its products won him the image of a self-reliant patriot out to redeem the country. Throughout, Iacocca was a master creator of products, profits, and his own image.

—Steven Kotok