Thursday, August 25, 2011

Lee Iacocca


A personal hero of mine, the family dropped our 18-yr-old daughter off at his alma mater, Lehigh University in Bethlehem,  Pennsylvania to begin her college career, today. It was raining a bit, and I hear we're getting a thunderboomer on Sunday.

Lido Anthony "Lee" Iacocca ( born October 15, 1924) is an American businessman known for engineering the Mustang, the unsuccessful Ford Pinto, being fired from Ford Motor Company, and his revival of the Chrysler Corporation in the 1980s.[1] He served as President and CEO from 1978 and additionally as chairman from 1979, until his retirement at the end of 1992.
One of the most famous business people in the world, Iacocca was a passionate advocate of U.S. business exports during the 1980s. He is the author (or co-author) of several books, including Iacocca: An Autobiography (with William Novak), and Where Have All the Leaders Gone?
Portfolio named Iacocca the 18th-greatest American CEO of all time.[2]

Contents

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Early life

Iacocca was born in Allentown, Pennsylvania to Nicola Iacocca and Antonietta Perrotta, Italian immigrants (from San Marco dei Cavoti, Benevento) who had settled in Pennsylvania's steel-making belt. They operated a restaurant, Yocco's Hot Dogs. He was said to have been christened with the unusual name "Lido" because he was conceived during his parents' honeymoon in the Lido district in Venice (he says in his autobiography that his father went to Lido long before his marriage and not for his honeymoon).[3]
Iacocca graduated from Allentown High School (now known as William Allen High School) in 1942, and Lehigh University in neighboring Bethlehem, Pennsylvania, with a degree in industrial engineering. He is a member of Tau Beta Pi, the engineering honor society, and an alumnus of Theta Chi Fraternity.
After graduating from Lehigh, he won the Wallace Memorial Fellowship and went to Princeton University, where he took his electives in politics and plastics. He then began a career at the Ford Motor Company as an engineer. Eventually dissatisfied with that job, he switched career paths at Ford, entering the company's sales force. He was very successful in sales, and he moved up through the ranks of Ford, moving ultimately to product development.


Marriage and family

Iacocca was married to Mary McCleary in 1956. They had two daughters: Kathryn and Lia. Mary Iacocca died in 1983 from diabetes. Both before and after her death, Iacocca became a strong advocate for better medical treatment of diabetes patients, who frequently faced debilitating and fatal complications.
Iacocca married his second wife Peggy Johnson on April 17, 1986 but in 1987, after nineteen months, Iacocca had the marriage annulled. He married a third wife, Darrien Earle, in 1991. They were divorced three years later in 1994.


Career at Ford

Iacocca joined Ford Motor Company in 1946. After a brief stint in engineering, he asked to be moved to sales and marketing, where his career flourished. While working in the Philadelphia district as assistant sales manager, Iacocca gained national recognition with his "56 for '56" campaign, offering loans on 1956 model year cars with a 20% down payment and $56 in monthly payments for three years. His campaign went national, and Iacocca was called to Dearborn, where he quickly moved up through the ranks. In 1960 Iacocca was named Ford's vice-president, car and truck group; in 1967, executive vice-president; and in 1970-1978, president.
Iacocca participated in the design of several successful Ford automobiles, most notably the Ford Mustang, the Lincoln Continental Mark III, the Ford Escort and the revival of the Mercury brand in the late 1960s, including the introduction of the Mercury Cougar and Mercury Marquis. He was also the "moving force," as one court put it, behind the Ford Pinto.[4] He promoted other ideas which did not reach the marketplace as Ford products. These included cars ultimately introduced by Chrysler- the K car and the minivan. Eventually, he became the president of the Ford Motor Company, but he clashed with Henry Ford II. He was fired in 1978, although the company posted a $2 billion profit for the year.


Career at Chrysler

Iacocca was strongly courted by the Chrysler Corporation, which was on the verge of going out of business. At the time, the company was losing millions, largely due to recalls of its Dodge Aspen and Plymouth Volare. Iacocca later said they should never have been built. Iacocca joined Chrysler and began rebuilding the entire company from the ground up, laying off many workers, selling the loss-making Chrysler Europedivision to Peugeot, and bringing in many former associates from his former company.
Also from Ford, Iacocca brought to Chrysler the "Mini-Max" project, which, in 1983, bore fruit in the highly successful Dodge Caravan and Plymouth Voyager. Henry Ford II had wanted nothing to do with the Mini-Max, a restyled version of the minivan, which Toyota was selling in huge numbers in Asia and Latin America, and his opinion doomed the project at Ford. Hal Sperlich, the driving force behind the Mini-Max at Ford, had been fired a few months before Iacocca. He had been hired by Chrysler, where the two would make automotive history.
Iacocca arrived shortly after Chrysler's introduction of the subcompact Dodge Omni and Plymouth Horizon. Bearing a strong resemblance to the Volkswagen Rabbit, the front-wheel drive Omni and Horizon became instant hits, selling over 300,000 units each in their debut year, showing what was to come for Chrysler. The Omni and Horizon had been designed alongside the Chrysler Horizon with much input from the Chrysler Europe division of the company (evidenced by many examples having VW/Audi engines), which Iacocca axed in 1978.
Iacocca gave an exclusive Chrysler Motors concession in Colombia to Gilberto Rodríguez Orejuela, known to be the head of the Colombian drug dealing Cali Cartel. [5]


1979 Chrysler bailout


the Dodge Aries, a typical K-Car
Realizing that the company would go out of business if it did not receive a significant amount of money for a turnaround, Iacocca approached the United States Congress in 1979 and asked for a loan guarantee. While some have said that Congress lent Chrysler the money, the government only guaranteed the loans. Most observers thought this was an unprecedented move, but Iacocca pointed to the government's bailouts of the airline and railroad industries. He argued that there were more jobs at stake in Chrysler's possible demise. Iacocca received the loan guarantee from the government, whose decision caused controversy.
Chrysler released the first of the K-Car line: the Dodge Aries and Plymouth Reliant, in 1981. Similar to the later minivan, these compact automobiles were based on design proposals which Ford had rejected during Iacocca's (and Sperlich's) tenure. Released in the middle of the major 1980-1982 recession, the small, efficient and inexpensive front-wheel drive cars sold rapidly. In addition, Iacocca re-introduced the big Imperial as the company's flagship. The new model had all of the newest technologies of the time, including fully electronic fuel injection (the first car in the U.S. to be so equipped) and all-digital dashboard.
Chrysler introduced the minivan, chiefly Sperlich's "baby," in the fall of 1983. It led the automobile industry in sales for 25 years.[6] Because of the K-cars and minivans, along with the reforms Iacocca implemented, the company turned around quickly and was able to repay the government-backed loans seven years earlier than expected.

The Jeep Grand Cherokee design was the driving force behind Chrysler's buyout of AMC; Iacocca desperately wanted it.
Iacocca led Chrysler's acquisition of AMC in 1987, which brought the profitable Jeep division under the corporate umbrella. It created the short-lived Eagle division, formed from the remnants of AMC. By this time, AMC had already finished most of the work with the Jeep Grand Cherokee, which Iacocca wanted. The Grand Cherokee would not be released until 1992 for the 1993 model year, the same year that Iacocca retired.
Throughout the 1980s, Iacocca appeared in a series of commercials for the company's vehicles, using the ad campaign, "The pride is back", to denote the turnaround of the corporation. He also used what was to become his trademark phrase: "If you can find a better car, buy it."


Other work and activities

In May 1982, President Ronald Reagan appointed Iacocca to head the Statue of Liberty-Ellis Island Foundation, which was created to raise funds for the renovation and preservation of the Statue of Liberty. He continues to serve on the board of the foundation.
In 1984, Iacocca co-authored (with William Novak) an autobiography, titled Iacocca: An Autobiography. It was the best selling non-fiction hardback book of 1984 and 1985. He donated the proceeds of the book's sales to diabetes research.
Iacocca appeared on an episode of Miami Vice, playing Park Commissioner Lido in episode #44 (titled Sons and Lovers) on May 9, 1986. The name of the character is a play on his birth name.
In 1988, Iacocca co-authored (with Sonny Kleinfeld) Talking Straight,[7] a book meant as a counter-balance to Akio Morita's Made in Japan, a non-fiction book praising Japan's post-war hard-working culture. Talking Straight praised the innovation and creativity of Americans.[8]
Pennsylvania Governor Robert P. Casey discussed with Iacocca an appointment to the U.S. Senate in 1991 after the death of Senator H. John Heinz III, but Iacocca declined.
In 1999, Iacocca became the head of EV Global Motors, a company formed to develop and market electric bikes with a top speed of 15 mph and a range of 20 miles between recharging at wall outlets.[9][dead link]
Politically, Iacocca supported the successful Republican candidate George W. Bush in the 2000 presidential election. In the 2004 presidential election, however, he endorsed Bush's opponent, Democrat John Kerry.[10] Most recently, in Michigan's 2006 gubernatorial race, Iacocca appeared in televised political ads endorsing Republican candidate Dick DeVos,[11] who lost. Iacocca endorsed New Mexico Governor Bill Richardson for President in the 2008 Presidential Election.
Following the death of Iacocca's wife from diabetes, he became an active supporter of research for the disease. He has been one of the main patrons of the research of Denise Faustman at Massachusetts General Hospital. In 2000, Iacocca founded Olivio Premium Products, which manufactures the Olivio line of food products made from olive oil. He donates all profits from the company to diabetes research. In 2004, Iacocca launched Join Lee Now,[12] a national grassroots campaign, to bring Faustman's research to human clinical trials in 2006.
Iacocca has been an advocate of "Nourish the Children," an initiative of Nu Skin Enterprises,[13] since its inception in 2002. He is currently its chairman. He helped donate a generator for the Malawi VitaMeal plant.
On May 17, 2007, Simon & Schuster published Iacocca's book, Where Have All the Leaders Gone?, co-written with Catherine Whitney.[14][15] An article with the same title, and same two co-authors, has recently been published.[16] In the book, Iacocca writes:
“Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course." Stay the course? You've got to be kidding. This is America, not the damned Titanic. I'll give you a sound bite: Throw the bums out!”
On December 3, 2007, Iacocca launched a website to encourage open dialogue about the challenges of our time. He has introduced topics such as health care costs, and the United States' lag in developing alternative energy sources and hybrid vehicles. The site also promotes his book Where Have All the Leaders Gone. It provides an interactive means for users to rate presidential candidates by the qualities Iacocca believes they should possess: curiosity, creativity, communication, character, courage, conviction, charisma, competence and common sense.
Iacocca led the fundraising campaign to enable Lehigh University to adapt and use vacant buildings formerly owned by Bethlehem Steel. Iacocca Hall on the Mountaintop Campus of Lehigh University houses the College of Education, the biology and chemical engineering departments, and The Iacocca Institute, which is focused on global competitiveness.


"Return" to Chrysler

Iacocca retired as President, CEO and Chairman of Chrysler at the end of 1992. In 1995, he assisted in billionaire Kirk Kerkorian's hostile takeover of Chrysler, which was ultimately unsuccessful. The next year, Kerkorian and Chrysler made a five-year agreement which included a gag order preventing Iacocca from speaking publicly about Chrysler.[17]
In July 2005, Iacocca returned to the airwaves as Chrysler's pitchman,[1] along with stars such as Jason Alexander and Snoop Dogg, to promote Chrysler's "Employee Pricing Plus" program; the ads reprise the "If you can find a better car, buy it" line, Iacocca's trademark of the 1980s. In return for his services, Iacocca and DaimlerChrysler agreed that his fees, plus a $1 donation per vehicle sold from July 1 through December 31, 2005, would be donated to the Iacocca Foundation for diabetes research.


Reflections on Chrysler's predicament

In an April 2009 Newsweek interview, Iacocca reflected on his time spent at Chrysler and the company's current situation. He said:
“This is a sad day for me. It pains me to see my old company, which has meant so much to America, on the ropes. But Chrysler has been in trouble before, and we got through it, and I believe they can do it again. If they're smart, they'll bring together a consortium of workers, plant managers and dealers to come up with real solutions. These are the folks on the front lines, and they're the key to survival. Let's face it, if your car breaks down, you're not going to take it to the White House to get fixed. But, if your company breaks down, you've got to go to the experts on the ground, not the bureaucrats. Every day I talk to dealers and managers, who are passionate and full of ideas. No one wants Chrysler to survive more than they do. So I'd say to the Obama administration, don't leave them out. Put their passion and ideas to work.[18]”


Loss of Chrysler pension and company car

Because of the Chrysler bankruptcy, Iacocca may lose his pension from a supplemental executive retirement plan and a guaranteed company car during his lifetime. The losses were due to take place once the bankruptcy court approves the sale of Chrysler to Chrysler Group LLC, with ownership of the new company by the United Auto Workers, Fiat and the governments of the United States and Canada.[19]


Ford Pinto fuel tank controversy

In 1977 there were allegations that the Pinto's structural design allowed its fuel tank filler neck to break off[20] and the fuel tank to be punctured in a rear-end collision,[20] resulting in deadly fires. Iacocca was quoted as saying "Safety doesn't sell"; he became an icon of the economic appraisal of human life. This case is a staple of engineering ethics courses as an example of a bad Cost/Benefit analysis; but its complexities are often ignored for the sake of the narrative.[21][22]


Allegations and lawsuits

Critics alleged that the vehicle's lack of reinforcing structure between the rear panel and the tank meant the tank would be pushed forward and punctured by the protruding bolts of the differential[23] — making the car less safe than its contemporaries.
According to a 1977 Mother Jones article, Ford officials were allegedly aware of the design flaw, but refused to pay for a redesign. They were said to have decided it would be cheaper to pay off possible lawsuits for resulting deaths. The magazine obtained a cost-benefit analysis which it said Ford had used to compare the cost of an $11 repair against the monetary value of a human life — what became known as the "Ford Pinto Memo".[21][22]
An example of a Pinto rear-end accident that led to a lawsuit was the 1981 accident that killed Lilly Gray and severely burned 13-year old Richard Grimshaw. The accident resulted in the court case Grimshaw v. Ford Motor Co.,[24] in which the California Court of Appeal for the Fourth Appellate District upheld compensatory damages of $2.5 million and punitive damages of $3.5 million against Ford. The damages and ruling were partially because Ford was shown to have been knowledgeable about the design defects before production but had decided against changing the design.


Recall

The National Highway Traffic Safety Administration (NHTSA) pressured Ford to recall the Pinto, motivated by public outcry and pressure from groups such as Ralph Nader's Center for Auto Safety. Initially the NHTSA did not believe there was sufficient evidence of incidents of fire to demand a recall. The 27 deaths attributed to Pinto fires is the same number of deaths attributed to a transmission problem in the Pinto, which resulted in 180 total deaths in all Ford vehicles, and in 1974 the NHTSA ruled that the Pinto had no "recallable" problem.[25]
In 1978 Ford initiated a recall. It provided plastic protective shields to be dealer-installed between the fuel tank and the differential bolts, another to deflect contact with the right-rear shock absorber, and a new fuel-tank filler neck that extended deeper into the tank and was more resistant to breaking off in a rear-end collision.[20][26]


Schwartz Study

In a 1991 paper, "The Myth of the Ford Pinto Case", for the Rutgers Law Review, Gary T. Schwartz[27] said the case against the Pinto was not clear-cut. According to his study, the number who died in Pinto rear-impact fires was well below the hundreds cited in contemporary news reports, and closer to the twenty-seven recorded by a limited NHTSA database. Given the Pinto's production figures (over 2 million built), this was not substantially worse than typical for the time. Schwartz said that the car was no more fire-prone than other cars of the time, and that its fatality rates were lower than comparably sized imported automobiles. He noted that the supposed "smoking gun" document, which plaintiffs said demonstrated Ford's callousness in designing the Pinto, was a document based on NHTSA regulations related to the value of a human life, rather than a document containing an assessment of Ford's potential tort liability.
Schwartz wrote:
  • "The Pinto Memo" wasn't used or consulted internally by Ford, but rather was attached to a letter written to NHTSA about proposed regulation. When plaintiffs tried to use the memo in support of punitive damages, the trial judge ruled it inadmissible for that purpose (p. 1021, Schwartz study).
  • The Pinto's fuel tank location behind the axle, characterized as its design defect, was "commonplace at the time in American cars" (p. 1027).
  • The precedent of the California Supreme Court at the time not only tolerated manufacturers trading off safety for cost, but apparently encouraged manufacturers to consider such trade-offs (p. 1037).


In popular culture

  • Chrysler's loan guarantee controversy was parodied by folk singer Tom Paxton in his song "I'm Changing My Name to Chrysler" as a (not particularly serious) way for individuals to get out of their own financial problems. Part of the chorus of the song goes, "I will tell some power broker / What he did for Iacocca / Will be perfectly acceptable to me."
  • Iacocca was referenced in the long-unreleased Neil Young song "Ordinary People," which refers to 'Lee Iacocca people.' It was released on the album Chrome Dreams II in October 2007.
  • Iacocca is portrayed by lookalike actor Walter Addison in the 2009 superhero film Watchmen; an assassin shoots him when attempting to assassinate Adrian Veidt.
  • Iacocca is mentioned in the Season 3 episode of The Office, "Cocktails", when CFO David Wallace pours glasses of 20-year scotch given to him by Lee Iacocca for a few of his guests. Michael Scott toasts Iacocca saying, "Here's to Mr. Iacocca and his failed experiment... The DeLorean."[28]
  • Iacocca is also mentioned in the Season 6 episode of The Office,"Happy Hour", when Donna asks Michael if he has read Iacocca's book. Michael then replies "Read it?, I own it. But no, I have not read it."
  • Iacocca's image is strongly associated with business and capitalism, as is shown in the use of his name on a school in the movie RoboCop to portray a dystopian future in which capitalism is taken to an extreme level.
  • Iacocca is mentioned in the comic strip Bloom County by a dancing cockroach.
  • In the Season 1 episode of Full House, "But, Seriously Folks", Joey gives up his stand-up career for a business career and hangs a poster of Lee Iacocca in his bedroom.


See also


References

  1. ^ a b Hakim, Danny (2005-07-19). "Iacocca, Away From the Grind, Still Has a Lot to Say". The New York Times (The New York Times Company). Retrieved 2008-04-17.
  2. ^ http://www.cnbc.com/id/30391313/?slide=4
  3. ^ "Leading the fightback: The American car industry faces souring costs, a flood tide of imported competition and a tightening net of legislation. Men like Iacocca have to fight the way out - and he is confident it can be done. An interview by Edouard Seidler (at a time when Iacocca was the President of Ford Motor Company)". Autocar. 134 (nbr 3909): pages 22–23. date 25 February 1971.
  4. ^ Ford Pinto reference
  5. ^ "A Day with the Chess Player". Time. July 1, 1991.
  6. ^ "After a Quarter Century, Dodge Loses Minivan Crown to Honda". Fox News. 6 January 2009. Retrieved 13 January 2009.
  7. ^ ISBN 0-553-05270-5
  8. ^ "Talking Straight (Hardcover) - Editorial Reviews". Amazon.com. Retrieved 2008-05-05.
  9. ^ Car czar Iacocca now hypes bikes and small electrical cars based on golf cart technology.
  10. ^ Iacocca and Kerry. - CNN. - June 24, 2004
  11. ^ Ad Punch.org report on DeVos political ads
  12. ^ Join Lee Now website
  13. ^ Nu Skin Enterprises website
  14. ^ Where Have All the Leaders Gone on bookstandard.com
  15. ^ Catherine Whitney reference
  16. ^ http://www.ichblog.eu/content/view/1145/1/
  17. ^ Special Reports: Timeline: The career of Lee Iacocca. - Detroit News. - March 17, 2002.
  18. ^ Halpert, Julie (2009-04-30). "It Pains Me". Newsweek. Retrieved 2009-05-01.
  19. ^ Chasan, Emily (2009-05-29). "Iacocca losing pension, car in Chrysler bankruptcy". Reuters. Retrieved 2009-05-30.[dead link]
  20. ^ a b c "Birth of the Ford Pinto". Howstuffworks.com.
  21. ^ a b "Pinto Madness". Mother Jones, Mark Dowie, September/October, 1977.
  22. ^ a b "The 50 Worst Cars of All Time". September 7, 2007.
  23. ^ Ford Pinto. State University of New York Press, Douglas Birsch and John Fielder, 1994, page 3. 1994-10. ISBN 9780791422342.
  24. ^ "Grimshaw v. Ford Motor Co.".
  25. ^ M T Lee and M D Ermann, "Pinto 'Madness,' a Flawed Landmark Narrative: An Organizational and Network Analysis," Social Problems, Vol 46, No 1, Feb 1999
  26. ^ "NHTSA Recalls for the 1975 Ford Pinto".
  27. ^ http://www.pointoflaw.com/articles/The_Myth_of_the_Ford_Pinto_Case.pdfPDF (3.94 MB)
  28. ^ http://splashpage.mtv.com/2009/03/02/lee-iacocca-is-alive-and-well-and-not-looking-forward-to-watchmen-movie/


Bibliography


Works by


Works about

  • Vlasic, Bill and Bradley A. Stertz (2000sbn=0688173055). Taken for a Ride: How Daimler-Benz Drove off with Chrysler. William Morrow & Company.
The song Sh-Tonaman by Mac Dre references Lee iacocca


External links

Wikiquote has a collection of quotations related to: Lee Iacocca
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