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Iacocca, Lido Anthony - Overview, Personal Life, Career Details, Chronology: Lido Anthony Iacocca, Social and Economic Impact

chrysler ford president company

(1924-)
Chrysler Corporation

Overview

Lee Iacocca was one of the best-known personalities in corporate America during the 1980s. The onetime top executive with the Chrysler Corporation enjoyed a long list of auto-related achievements before his rise to celebrity, and his impact on the industry was widespread. Easy financing, the Ford Mustang, the minivan, the sportutility craze, and even the 1998 Chrysler merger with German carmaker Daimler-Benz can all be traced to Iacocca’s vision. The author of two best-selling autobiographies, Iacocca has been described as brash, profane, headstrong, and a genius.

Personal Life

Lido Anthony Iacocca was born on October 25, 1924 in Allentown, Pennsylvania. His parents, Nicola and Antoinette, were both Italian immigrants. His father, who had only an elementary-school education, ran a hot dog stand called the Orpheum Wiener House, but later sold real estate and ran one of first rental-car agencies in the country. Nicola’s son was equally enterprising: 10-year-old Lido worked as a freelance delivery person outside the local grocery store, and then began working long hours in a fruit market at the age of 16.

Iacocca and his family, like many others of their generation, were tremendously impacted by the Great Depression and the bleak economic prospects of the 1930s. This experience focused his outlook on life and fueled in him a desire to succeed. He wanted to be one of the men who made the decisions, not one of the workers laid off by them. His family instilled in him a desire to rise above Allentown’s blue-collar world. He was sometimes teased by other children, and was friendly with a few classmates of Jewish faith who suffered similar ostracism; many years later, Iacocca would name the automotive industry’s first Jewish vice-president.

A bout with rheumatic fever as a child made Iacocca ineligible for military service during World War II, which was a difficult position for a young and apparently fit man at the time. His father’s increasing prosperity paid for college at Lehigh University, and he graduated with an engineering degree in 1945. Iacocca was then offered a coveted spot in the Ford Motor Company’s engineer-trainee program, but declined so that he might earn a graduate degree from Princeton University, for which he had won a fellowship.

In 1956 Iacocca married Mary McCleary, with whom he had two daughters. Unlike other top-level auto industry executives, he did not go into the office on weekends and rarely brought work home. Mary Iacocca died of diabetes in 1983, which devastated him. He married former flight attendant Peggy Johnson in 1986; they were divorced a year later. Iacocca later married Los Angeles restaurateur Darrien Earle, but that marriage also ended in divorce. Iacocca remains close to his two daughters, Lia Nagy and Kathy Hentz, and enjoys homes in Italy, New York City, Palm Springs, and Colorado.

Career Details

Iacocca began his career at Ford in 1946 in Dearborn, Michigan, but quickly realized that engineering was not his forte. He was forced to almost beg for a job in the sales division, since the corporate climate at the Big Three automakers (Ford, Chrysler, and General Motors) discouraged moves between divisions. Finally, Iacocca managed to get a job on the sales and marketing staff of Ford’s Eastern United States district, headquartered outside Philadelphia. It was also around this time that he changed his name to “Lee.”

Iacocca first came to the attention of upper management in the mid-1950s, when he created a financing plan that vaulted the Philadelphia district from last place in Ford sales in the country to number one. His “56 for 56” sales promotion put keys in the hands of new-car buyers who qualified for financing with just a $56 down-payment. The promotion was soon implemented nationwide, and Iacocca was promoted to district sales manager of the Washington, D.C. area. By 1960, he had been promoted to vehicle marketing manager.

That same year, Iacocca was promoted to vice-president, making him one of the youngest top-level executives in the history of the automotive industry. The company’s new president, Robert McNamara (who later left Ford to become U.S. Secretary of Defense during the Vietnam War), chose Iacocca to succeed him as vice-president and general manager of the Ford Cars and Trucks Division. Iacocca was just 36 and still a relative newcomer at the company’s world headquarters; with the new post, he assumed control of 11,000 employees. He gained considerable attention, but also faced some very thinly veiled resentment.

Iacocca soon proved himself ready and able for the job. In one of his many pioneering moves, he created the Fairlane Committee to study future car-buying trends and to develop a vehicle in response. Iacocca pushed for a sportier redesign of the reliable Ford Falcon, and in 1964 introduced the Mustang. It was a huge success, and made Iacocca a household name: both he and the car appeared on the covers of Time and Newsweek. “The Mustang mirrored the youth and vitality of the early 1960s,” wrote Doron P. Levin in Behind the Wheel at Chrysler: The Iacocca Legacy. It also brought in $1.1 billion in revenues during its first two years in production.

Such success initially made Iacocca a favorite of Henry Ford II, grandson of the company founder. Iacocca became executive vice-president of the company’s North American automotive operations in 1967, and was named president in 1970. But Henry Ford II reportedly came to resent Iacocca, who was reputed to be brash, opinionated, and sometimes difficult to work with, and Ford soon began to fear that Iacocca would succeed him when he died. According to Iacocca, the heir attempted to undermine Iacocca and his plans, rejecting, for instance, Iacocca’s idea to design and market a small passenger van. In addition to the tension between Iacocca and Ford, Iacocca’s tenure as president also had some notable setbacks. For example, his small, fuel-efficient Pinto initially a popular seller, was found to have fuel tanks that ignited if the Pinto was involved in certain types of collisions. A government safety investigation and massive recall killed the car, as well as some of the company’s credibility.

Henry Ford II fired Iacocca personally in July 1978, reportedly saying, “I just don’t like you.” The deposed president was given a transition office in a parts warehouse, a stinging insult. But just a few months later, Iacocca was hired by the Chrysler Corporation as president and chief operating officer. His appointment was confirmed by the Chrysler board on the same day the company announced its worst quarterly loss ever: a staggering $159 million. By his own accounts Iacocca didn’t realize just how badly Chrysler was faltering when he agreed to take the job.

By the time Iacocca was named chair of Chrysler in 1979, he had put in place a massive reorganization. He fired some executives, hired others away from Ford (such as Gerald Greenwald, the first vice-president of Jewish heritage in the auto industry) and shut down the 5,000-worker main Dodge plant. An old, decrepit facility, the plant had helped several generations of Detroit residents to achieve prosperity over the years, and its closing alarmed many, not just its displaced workers. Chrysler was still near bankruptcy, and Iacocca went to Washington and petitioned Congress for $1.2 billion in loan guarantees. He spoke before hostile senators, and even brought in the mayor of Detroit to testify. But many remained opposed: such financial assistance to save a near-bankrupt company was almost unheard of in American business history. Iacocca was a compelling advocate for his company, however. Finally, recognizing that President Carter needed Detroit votes in his 1980 reelection bid, and that the loans would help Chrysler to meet newly-imposed federal fuel and safety standards, Congress eventually approved the loans.

During the early 1980s, Iacocca helped to engineer a turnaround for the company. After making massive layoffs, he managed to win major concessions from the powerful United Auto Workers union in wages and benefits. To show solidarity, he paid himself only $1.00 a year. The K Car and several new models turned the company’s fortunes, and on July 13, 1983 (five years to the day after Iacocca’s dismissal from Ford), Chrysler paid back its government loans in full, seven years ahead of schedule.

Chronology: Lido Anthony Iacocca

1924: Born.

1945: Received engineering degree.

1946: Hired by Ford Motor Company.

1960: Became one of the youngest vice-presidents in automotive industry history.

1964: Oversaw launch of the Ford Mustang.

1970: Named president of Ford.

1978: Fired by Henry Ford II.

1979: Named chair of Chrysler.

1984: Chrysler introduces minivan.

1992: Retired from Chrysler.

1995: Involved in failed attempt to gain control of Chrysler.

Chrysler’s success continued with the introduction of the Dodge Caravan minivan in 1984, which again illustrated Iacocca’s savvy interpretation of demographics. Baby boomers were reproducing in record numbers, and the fuel-efficient, sliding-door vehicle catered to a generation of suburban mothers and their grocery parcels and unwieldy child-safety seats. In 1986, Chrysler bought American Motors, the last surviving U.S. automaker outside of the Big Three, and with it received an unusual subsidiary named Jeep. First designed for military use during World War II, Jeeps were rugged vehicles; Chrysler retooled the basic design of a popular “sport-utility” model, launching the Jeep Grand Cherokee in 1992. Again, Chrysler had another huge hit with the American buying public, and a minivan-vs.-sport-utility debate raged among consumers well into the decade. Soon after, Iacocca retired from Chrysler, but not before pushing for a new car program (the L/H series, which produced such popular models as the Intrepid, Concorde, and LHS). The program created confidence and propelled the company into profitability again at the time of his exit.

Iacocca remained a major stockholder in Chrysler, and in 1995 became involved in a bitter battle waged by another major shareholder, Las Vegas financier Kirk Kerkorian, to gain control of the company. Iacocca placed his shares on Kerkorian’s side in the war, and he was roundly criticized for doing so. The move seemed a bit uncharacteristic, since in his two books, Iacocca: An Autobiography and Talking Straight, Iacocca had previously condemned such corporate raiding, claiming that it destroyed American jobs.

In 1998 Iacocca became chair of the Koo Koo Roo chain of restaurants, which boasted 52 eating establishments in California, Nevada, Florida, and Washington, D.C. He was also involved in the electric-car market in California.

Social and Economic Impact

Iacocca has been hailed as the savior of the American automotive industry. Although his detractors are many, his achievements are numerous. He was one of the first industry executives to champion safety features in cars, and the vehicles produced under his tenure (the Mustang, the minivan, and the Grand Cherokee) set the standard for other automakers, and virtually defined, and redefined, a generation and its car-buying habits.

Though he has often weathered criticism for relishing the perks of his position a bit too much, Iacocca was a fresh departure from the stereotypical stodgy auto executive. He enjoyed great popularity during his stint at Chrysler, in part because of television ads that gave consumers the idea that the once-ailing automaker was in the capable hands of a strong, tough-talking leader. Such advertising was also a first among the usually colorless automotive executives, who were content to remain unrecognizable to their thousands of employees and car buyers. Iacocca was even mentioned as possible presidential candidate in the 1980s.

Iacocca’s influence in the slow-moving world of automotive-industry economics stretched far beyond his exit from Chrysler. For example, he was the visionary behind the Chrysler Technology Center which later catapulted the automaker to the top position in research and development among the Big Three. This superiority was one of the significant attractions for German automaker Daimler-Benz when it agreed in early 1998 to merge with Chrysler.

The 1998 merger betweeen Chrysler and Daimler-Benz merger had been hinted at for some time. Some observers said that what Iacocca did at the automaker during his reign had prepared it for just such a move. As chair, wrote Barbara Seaman and Ron Stodghill II in Time, Iacocca had “dreamed of creating what he called Global Motors, a fully integrated international car and truck builder and seller Specifically, Iacocca’s Global Motors was to be an alliance of Chrysler and Volkswagen (or Fiat or Renault if VW didn’t want to play)” Seaman and Stodghill wrote about Iacocca’s vision of a fleet of vehicles with multinational pedigrees sold at joint dealerships around the globe, and noted that, while Iacocca had long since retired, “Global Motors lives again as Daimler Chrysler.”

Iacocca has been involved in some charitable activities, most notably the 1986 Statue of Liberty restoration and centennary project. Proceeds from his two books were donated to the Iacocca Foundation, which contributes to diabetes research. He is also active in the Iacocca Institute at Lehigh University, which emphasizes competitiveness in the global marketplace.

Ibrahim, Saad Eddin (1938–) - PERSONAL HISTORY, INFLUENCES AND CONTRIBUTIONS, BIOGRAPHICAL HIGHLIGHTS, PERSONAL CHRONOLOGY:, THE WORLD’S PERSPECTIVE, LEGACY [next] [back] I Will Fight No More Forever

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over 5 years ago

I am wondering who wrote this article and where they got their sources.