11 Jul Lee Iacocca Was a C.E.O. for the Television Age
The New York Times, July 3, 2019
Before the cult of the modern corporate chief, the former Chrysler leader fused his identity with his company’s, helping him sell cars and win over Washington.
Osamu Honda/Associated Press
Long before Lee Iacocca ran the Ford Motor Company and then the Chrysler Corporation, there were corporate leaders who captured the public’s imagination, like John D. Rockefeller, Walt Disney, Estée Lauder and Henry Ford.
But Mr. Iacocca was among the first of the celebrity chief executives of the Andy Warhol era of quick corporate fame and broad political influence. He showed that a company boss could be as adept at winning over consumers and Washington as maneuvering in the corporate boardroom.
Along the way, he helped transform big business’s relationship with the American government. After obtaining a government lifeline for Chrysler in 1979, Mr. Iacocca showed that a company could survive and prosper with a bailout from Washington — a path others tried to follow during the global financial crisis nearly three decades later.
People who couldn’t tell a Dodge from a Chevy had reason to know Mr. Iacocca, who died on Tuesday at age 94. He, rather than his cars, was the star of many of Chrysler’s television commercials. He wrote best-selling books that were read by blue-collar and white-collar workers alike.
When the 1986 movie “Platoon” was later released on videocassette, viewers first saw a “tribute” — Chrysler and HBO Video refused to call it a “commercial” and didn’t disclose financial terms — from Mr. Iacocca standing next to a military jeep. “I hope we will never have to build another jeep for war,” he said somberly, and ended the spot by saying, “I’m Lee Iacocca.”
Mr. Iacocca started to change the image of corporate leaders from gentleman golfers to obsessive managers who worked hard and partied hard. He socialized with Frank Sinatra and other celebrities. He seldom visited the plush Bloomfield Hills Country Club, a longtime hideaway for auto executives in the Detroit suburbs, or stayed at the fanciest hotels in New York and Europe.
“That was not him, playing golf — his focus was the business,” said David E. Cole, the chairman emeritus of the Center for Automotive Research at the University of Michigan.
That pop culture familiarity has persisted for years. A fictionalized version of Mr. Iacocca is set to appear this November in the film “Ford v Ferrari,” starring Matt Damon and Christian Bale, about Mr. Iacocca’s effort in 1966 to build a car fast enough to beat the Italian carmaker’s.
Mr. Iacocca’s desire to dominate every opponent, in Detroit and in Washington alike, was remarkable even in an auto industry known for strong-willed leaders with outsize egos.
“His ego was gigantic, and if you were to oppose him, you’d be overwhelmed,” Gerald Meyers, the former chairman and chief executive of American Motors, said in a telephone interview on Wednesday.
In addition to the 1979 bailout, Mr. Iacocca pushed the introduction of the modern minivan in late 1983 and Chrysler’s acquisition in 1987 of American Motors, with its valuable Jeep brand.
Mr. Iacocca was already well known in business and auto circles in the 1970s when he sought a lifeline for Chrysler from Washington, bringing government and industry together in ways that would have been almost unthinkable in earlier decades.
Europe, particularly Continental Europe, had a history of close partnership between businesses and government going back to the dawn of the industrial age. The Spanish crown oversaw the construction in the 18th century of the Royal Tobacco Factory in Seville, one of the earliest attempts at mass production and immortalized in the opera “Carmen.” Britain and France nationalized their coal, gas supply and electricity industries right after World War II.
But while Washington and American big business could be cozy, corporate leaders have long resisted direct government meddling in their affairs. Mr. Iacocca, like other auto executives, blamed new clean air regulations, fuel economy rules and car safety standards for many of Ford’s and Chrysler’s problems. He strenuously opposed seatbelts and other innovations that the auto industry has since embraced.
That dislike of government interference persisted in pockets of the industry for many years.
At a dinner party I attended in Washington in 1991 as a young reporter for The New York Times, a senior General Motors executive launched into a loud soliloquy. Washington, he said, was a city that did not really matter because, unlike Detroit, it did not actually make anything. His audience, mostly diplomats with a smattering of American policymakers and journalists, sat in stunned silence.
By then, that attitude was already changing. In 1979, Mr. Iacocca persuaded President Jimmy Carter and Congress to provide a federal guarantee for $1.5 billion in loans to Chrysler. At congressional hearings he verbally sparred with lawmakers, and Chrysler took out newspaper advertisements pressing for the bailout with his signature at the bottom.
He won sympathy from Washington in a way that leaders of unsuccessful companies had not been able to do before.
“He was highly respected in Washington, I think because he was so vocal and he was such a powerful person,” Mr. Meyers said.
Mr. Iacocca’s headstrong ways did not always serve him well.
Until 1978, he was a rising executive at Ford, famous for overseeing development of the Mustang muscle car and landing his face on the cover of Time magazine.
Mr. Iacocca was also mentoring a young William C. Ford Jr., who went on to become the longtime executive chairman of Ford Motor. “I will always appreciate how encouraging he was to me at the beginning of my career — he was one of a kind,” Mr. Ford said in a statement on Tuesday.
But Mr. Iacocca’s personal relationship with Mr. Ford’s uncle Henry Ford II, who was the all-powerful chairman of the company, had deteriorated by 1978. Henry Ford II ousted Mr. Iacocca, making the famous remark “Well, sometimes you just don’t like somebody.”
Out of a job, Mr. Iacocca was quickly in touch with Harold K. Sperlich, the engineer who had designed the Ford Mustang for him 15 years earlier, and who had just taken a senior post at Chrysler. Mr. Sperlich quickly helped persuade Mr. Iacocca to follow him there and take over. Mr. Iacocca arrived at Chrysler and discovered that its finances were crumbling quickly in the face of high oil prices and rising car imports from Japan.
Once Mr. Iacocca won the federal bailout, he and Mr. Sperlich focused on what was then a totally new market: minivans. To get them to market, Mr. Iacocca had to woo Washington once again.
Stringent fuel economy regulations imposed on cars in the 1970s had made it practically impossible for automakers to keep selling big station wagons. Yet many Americans still wanted roomy vehicles.
The answer, Mr. Sperlich and Mr. Iacocca realized, was to make family vehicles that were regulated as light trucks, a category of vehicles that includes pickups. The government had placed far more lenient fuel economy rules on light trucks, as well as more lenient safety and air pollution standards.
Cargo vans, a tiny niche marketed to carpenters, plumbers and other workers, were regulated as light trucks. When Chrysler introduced the minivan in 1983, fewer than 3 percent of them were configured as cargo vehicles, with just a couple of seats in the front and a long, flat bed in the back. But that was enough for Mr. Iacocca to persuade federal regulators to label all minivans as light trucks.
Even the United Automobile Workers union, despite having many jobs at stake, initially objected to the labeling of minivans as light trucks.
“I remember arguing that a vehicle that hauls goods is a truck, and a vehicle that hauls passengers is a car,” said Doug Fraser, the U.A.W. president when the minivan was introduced.
But the union soon retreated, he said in an interview in 2001. “We obviously didn’t want to go overboard because, frankly, of jobs.”
Four years after the introduction of the minivan, Mr. Iacocca led the acquisition of American Motors. He then oversaw the development of the roomy Jeep Grand Cherokee, a sport utility vehicle that became a runaway best seller in the 1990s.
Best of all for Detroit, the federal government limited foreign competition: Japanese automakers were initially kept out of the minivan and S.U.V. markets by an obscure 25 percent tariff on imported light trucks that was imposed by President Lyndon B. Johnson.
That tariff has been one of the inspirations for President Trump’s 25 percent tariffs on imports from China during the current trade war. The first batch of those tariffs last summer was imposed on Chinese cars, heading off plans by six Chinese automakers to begin large-scale shipments to the United States by next year.
Before Twitter and before cable television, Mr. Iacocca showed that corporate executives could use star power and the media to gain national power, said Bill Russo, a former chief executive of Chrysler China.
“He leveraged that, through influence with the government, to make Chrysler the success that it became,” Mr. Russo said. “He did it by becoming larger than life: Washington pays attention to people like that because of their appeal to the voting population, and he did that in the pre-internet era.”
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