Auto industry legend Lee Iacocca has died aged 94. He was the father of the Ford Mustang and saved Chrysler from bankruptcy. Mike Renaut looks back on his life…
LEE IACOCCA 1924-2019
When earlier today I mentioned to an American friend that Lee Iacocca had just died, he responded, ‘That’s sad news, he was really cool, a proper car guy,’ and he was. Responsible for the introduction of the Ford Mustang, Iacocca is also credited with reviving Chrysler and was the only executive in modern times to preside over two of the ‘Big Three’ car manufacturers.
Lido Anthony Iacocca was born October 15, 1924 in Allentown, Pennsylvania. His parents were immigrants from San Marco, Italy, and his father Antoinette, a hot-dog vendor, supposedly named him after the Venice Beach island. Following the Great Depression Antoinette began one of the first car rental agencies, his fleet of Fords starting Lido’s interest in cars.
Changing his name to Lee, he began as an engineer at the Ford Motor Company in 1946, before moving into aggressively co-ordinating dealership sales. His sales career flourished until his flair for marketing saw his first advertising campaign catch the attention of Ford executives. The ‘56 for 56’ offered 1956 cars for a 20% down payment and $56 a month for three years. The idea was so successful locally that Ford turned it into a national campaign and made Iacocca the corporate director of truck marketing. “The Depression turned me into a materialist,” Iacocca recalled in his autobiography. “When I graduated from college my attitude was: ‘Don’t bother me with philosophy. I want to make ten thousand a year by the time I’m 25, and then I want to be a millionaire’.”
He was instrumental in the design and launch of the Ford Mustang, which sold 419,000 in its first year and produced $1.1 billion in net profits over two years. Other winners included the Cougar, Maverick and Lincoln Continental Mark III. Less successful were the Pinto and Iacocca’s continued opposition to safety devices such as seatbelts and airbags, as he said: “They’re not what sells cars.” He was named President of Ford in 1970 but fired in 1978, supposedly after being accused of plotting to oust Chairman Henry Ford II. Ford said later he fired Iacocca because he ‘just didn’t like him’.
Often referred to as a visionary, in 1979 Iacocca took over Chrysler Corporation. The company was on the verge of collapse and he implemented a strict restructuring process, closing plants and halving the workforce. After convincing the government how vital Chrysler was to the national economy, he secured a $1.5 billion federal guarantee against existing bank loans and creditors. Iacocca famously accepted a salary of just $1 per year while the company recovered.
The restructuring included new ranges of cars and a decade-long television advertising campaign he fronted himself. “If you can find a better car, buy it,” Iacocca stated in the ads. “I’m not asking you to buy any car on faith. I want you to compare.” It paid off. Americans were buying cars at a record rate once more, including Chrysler’s new minivans and compacts. The Dodge Caravan was a concept Iacocca had pitched unsuccessfully to Ford in 1974, now for Chrysler it became a huge hit.
In 1983, Iacocca announced they were repaying the loans seven years early. Chrysler’s $1.7 billion loss in 1980 was turned into a $2.4 billion profit by 1984. Experts called it one of the most brilliant turnarounds in business history. It was made all the more impressive as the recovery had begun in a recession against huge competition from rivals Ford and General Motors, plus an increasing number of imported cars from countries like Japan and Germany.
His 1984 book Iacocca: An Autobiography became a bestseller and the leading non-fiction hardcover for 1984 and 1985. “Chrysler’s subsequent return to health, and the publication of his best-selling autobiography conferred mythic status on him as the nation’s economic Winston Churchill,” wrote Doron P. Levin in Behind the Wheel at Chrysler (1995). In 1987 Chrysler posted sales of $26 billion and had $3 billion in reserve. Iacocca’s $1 salary had transformed into pay and stock options worth $18 million, making him the industry’s highest paid executive. His conferences with President Ronald Reagan and Congress members fuelled rumours of political ambition and there was serious talk of his running for President of the United States in 1988. His continued denials only making the public more interested.
Yet the polished sheen was fading. The stock market plunge coupled with the flood of fuel-efficient Japanese cars meant by the end of the Eighties Chrysler experienced another downturn and thousands of workers were laid off. Iacocca later admitted to drifting too far from daily operations. Rather than reinvest in new models to rival Japanese imports, he bought American Motors – at the time only a minor rival – and corporate jet manufacturer Gulfstream. Most American cars of the period couldn’t compete with their innovative, well-built and reliable Japanese rivals.
Iacocca accused America of suffering a “national inferiority complex”. Although he persuaded Congress to offer some protection from imported cars, Japan then set up factories to build their cars in the United States. His campaign against the Japanese saw critics accuse him of ‘Japan-bashing’ and that Chrysler’s $1,000 rebates on new cars suggested a fire sale.
Iacocca established partnerships with Mitsubishi, Maserati and Fiat, but was later forced to step down. In 1992 when the company became profitable again he hired Robert J. Eaton, head of General Motors’ European operations, as his designated successor and retired as Chrysler’s chairman and chief executive.
“He played a historic role in steering Chrysler through crisis and making it a true competitive force. He was one of the great leaders of our company and the auto industry as a whole,” said a spokesman for Fiat Chrysler Automobiles. “Lee gave us a mindset that still drives us today – one that is characterised by hard work, dedication and grit.” Lee Iacocca died aged 94 on July 2 at his home in Los Angeles following complications from Parkinson’s disease.
First K-car off the line. Chrysler minivan. 1984 launch of Chrysler’s minivans. Iacocca at the 1964 World’s Fair Ford Mustang introduction. Iacocca with the first Mustang. Iacocca at Ford with a ’1972 Lincoln Continental Mark IV.