Automobile executive Lee Iacocca just passed away at age 94.
He is credited with introducing the Ford Mustang in 1964 and the minivan in 1984. But his national celebrity came in 1980 when, as the newly hired CEO of the failing Chrysler Corporation, he talked the U.S. government into a loan guarantee of $1.5 billion to avoid bankruptcy.
He famously said, “We at Chrysler borrow money the old-fashioned way. We pay it back.” And that they did – seven years ahead of schedule. Think how this first government bailout became the precedent that eventually saved our economy in 2008, when Congress put up $700 billion to save Wall St, Detroit, and banks from collapse. Iacocca taught us that government and business cannot be mutually exclusive.
To insure the Chrysler payback, Iacocca threw himself into marketing with commercials featuring him in his factory uttering another famous line: “If you find a better car, buy it.” His front wheel drive K-cars – previously rejected when he was at Ford – were an instant success. By force of personality and managerial wizardry, Iacocca took Chrysler from near-bankruptcy in 1980 to sales of $26 billion in 1987 with a $3 billion cash reserve.
The man born Lido Anthony Iacocca in Allentown, PA to Italian immigrants became the paragon of American capitalism. There weren’t many business celebrities like him. He didn’t play golf, wasn’t mega-rich or flashy. His image was the working manager – all business. “We are continually faced by great opportunities brilliantly disguised as insoluble problems,” was his philosophy. “Management is nothing more than motivating other people,” was his management style.
He had his failures, of course. His Ford Pinto had a vulnerable fuel tank that proved disastrous. His stormy relations with Henry Ford II brought on his firing. But that job loss pushed him to Chrysler. Recruited by then-Chairman John Riccardo, a fellow Italian American whose company was caught short in a new era of the Oil Embargo, Iacocca took on both the Embargo with fuel saving vehicles and Riccardo’s idea to tap the government for a loan guarantee.
Besides saving Chrysler, Iacocca made the fateful decision to acquire Jeep, which today is still a major profit center for Fiat Chrysler.
His success, integrity, and personal charm gave him an opportunity to pay back his nation in 1982 when President Ronald Reagan asked him to head a private sector effort to raise funds for the restoration and preservation of the Statue of Liberty and Ellis Island. Under Iacocca’s leadership hundreds of millions of dollars were raised to repair, restore, and maintain these two great monuments to freedom. No government funds were needed.
July 4th weekend in 1986, saw a gala four-day event celebrating the restoration. Fireworks filled the night skies; tall ships assembled in the Harbor. “Liberty Weekend,” attended by President Reagan and President Francois Mitterand of France, was broadcast to 1.5 billion people in 51 countries.
By some ironic quirk, the party planners had forgotten to invite any Italian immigrants, among the diverse ethnic representatives, to the ceremony. And a children’s book later published by author Catherine Reef highlighted only Lucky Luciano as the example of an immigrant Italian. We don’t know what Iacocca’s reactions were to these insults. But we know he was thankful that his immigrant parents were received at Ellis Island and passed muster before he was born.
It is refreshing to recall Iacocca’s values at a time when we hear presidential candidates promising all manna from heaven to the masses. Borrowing money “the old-fashioned way” is no longer in vogue. Many young people believe personal debt is an injustice now. Automobiles are more status symbols than practical. Economy cars and minivans no longer excite.
Lee Iacocca fought for the American car industry and gave it a face and clout in Washington. In 1995, having retired three years before, he tried to save a teetering Chrysler again and keep it American. But his attempt failed when German automaker Daimler bought it. That Teutonic takeover ultimately failed in a clash of cultures. But, in an ethnic do-over in 2014 another Italic leader revitalized Chrysler when Italy’s FIAT bought it, and the late Sergio Marchionne worked his magic.
Italic managers seem to have the right stuff. -JLM