Iacocca, Lido Anthony

IACOCCA, LIDO ANTHONY

Lee Iacocca (1924–) retired as the Chief Executive Officer (CEO) of the Chrysler Corporation in 1992. He had joined the corporation fourteen years earlier when Chrysler was on the edge of bankruptcy. The company was at the time one of the largest automobile manufacturers in the world, employing thousands of people. Upon entering the company Iacocca convinced everyone involved, including the United States government, to underwrite $1.2 billion in loans to rebuild the company. To obtain this critical support, Iacocca used the legendary salesmanship and public relations skills he had honed while president of the Ford Motor Company. Seemingly by sheer willpower, Iacocca saved Chrysler and its employees from financial ruin.

Lido Anthony Iacocca was born in 1924 in Allentown, Pennsylvania. He was the son of Italian immigrants. Lee, as he preferred to be called, learned about business from his father, Nicola, who was a businessman with many interests. Nicola was a cobbler, the owner of a hot dog restaurant, a theater owner, and the owner of one of the first car rental agencies in the country. Iacocca credits his father with passing on to him a love for the automobile.

Iacocca earned his Bachelor's degree from Lehigh University. He later earned a Master's in mechanical engineering, with a specialty in industrial engineering, from Princeton University. He decided early on to become an auto company executive. After graduating from Princeton in 1946 he joined the Ford Motor Company as an engineering trainee. Within a year he realized that he was far better at selling automobiles than at making them. Iacocca entered the fast-track of sales. In 1960, at age thirty-six, he sped into the vice presidency and general management of the company's most important unit, the Ford division.

In 1964 Lee launched the Mustang automobile. Its attractive styling and successful marketing introduced a new wave of sports cars to the Ford operation. The Mustang earned Iacocca instant fame as an industrial innovator. In 1964 his face was on the cover of both Time and Newsweek magazines. By 1967 he was the executive vice president of Ford Motor Company. In 1970 he became president of the company. His only superior was Henry Ford II (1917–1987), chairman of the board of Ford Motor Co. For reasons that were never made clear, Chairman Henry Ford II discharged Lee Iacocca in June 1978. It was a shock to many people who saw Iacocca as a natural heir at Ford.

Five months later Iacocca was named president of the rival Chrysler Corporation. He became chairman in 1979 and began turning around the failing corporation. At the time Chrysler was headed for bankruptcy. Iacocca took the number three automaker, deep in debt, and transformed it into a highly profitable enterprise. He began managing expenses by winning approval of over $1 billion in federal loan guarantees. He then sold off profitable units like the tank manufacturing division and introduced new products to the marketplace. He also brought the president of the United Auto Workers onto the company's board of directors.

Within six years Chrysler paid off its debts and posted a profit of $2.4 billion. In 1985 Chrysler bought the Gulfstream Aerospace Corporation for $637 million and the E.F. Hutton Credit Corporation for $125 million.

Under Iacocca's leadership the company put out innovative new vehicles and eventually bought out competitor American Motors Corporation. As Chrysler bounced back to life in the 1980s, Iacocca became an extraordinary business and corporate celebrity. Some of his detractors felt he was a self-obsessed egomaniac, but many analysts of his career regard him as an important U.S. industrial hero of the late twentieth century.

A key product to the resurgence of the Chrysler Corporation was Iacocca's promotion of the K-car "minivan." It was a vehicle loved by the young family in need of room and efficiency. The mini-van largely helped revitalize Chrysler and its public image. It clearly set the trend for the enormous popularity of the sports utility vehicle that claimed much of the auto industry's market in the late twentieth century.

Iacocca continued to be the successful and charismatic CEO of the Chrysler Corporation until his controversial retirement in 1992, during a period when Japanese auto competition was once again hurting Chrysler's profits. He moved into retirement reluctantly after spending much of the previous thirty years of his life as an automobile industry corporate legend. Iacocca remained a major stockholder in Chrysler and in 1995 he became involved in a battle to gain control of the company. In the unsuccessful attempt for control, Iacocca sided with Las Vegas financier Kirk Kerkorian and was strongly criticized.

Iacocca's impact on the auto industry was controversial, but undeniable. He saved the Chrysler Corporation and turned it into a profitable business. In 1998, even in retirement, Iacocca was still involved in the auto industry, investigating the market for electric cars in California.

See also: Automobile Industry, Chrysler Corporation

FURTHER READING

Gordon, Maynard M. The Iacocca Management Technique. New York: Dodd Mead, 1985.

Iacocca, Lee A., and William Novak. Iacocca: An Autobiography. Toronto; New York: Bantam Books, 1984.

Jefferys, Steve. Management and Managed: Fifty Years of Crisis at Chrysler. Cambridge; New York: Cambridge University Press, 1986.

Levin, Doron P. Behind the Wheel at Chrysler: The Iacocca Legacy. New York: Harcourt Brace, 1995.

Wyden, Peter. The Unknown Iacocca. New York: Morrow, 1987.