Lido (Lee) Anthony Iacocca

After a 32-year career with Ford Motor Company, including eight years as president, Lido (Lee) Anthony Iacocca (born 1924) engineered one of business history's greatest comebacks at Chrysler Corporation. His success, coupled with appearances in television commercials and his best-selling book, made him one of the nation's best-known and most admired businessmen.

Lido (Lee) Anthony Iacocca was born October 15, 1924 in Allentown, Pennsylvania, the son of Italian immigrants Nicola and Antionette. Iacocca grew up in comfortable surroundings learning the nuts and bolts of business from his father. Nicola was an entrepreneur who taught his son about the responsibilities of borrowing money and the need for a hard-driving vision in order to build a thriving business. Nicola Iacocca worked as a cobbler, hot-dog restaurant and theater owner. He also ran one of the first car rental agencies in the country and passed on his love of the automobile to his son. Iaccoca was deferred during World War II because of having had rheumatic fever as a child. He earned his BS and MS degrees in engineering from Lehigh University and Princeton University, respectively. Even as a teenager, Iacocca decided that he was going to be an auto company executive and focused his studies in that direction. His degrees are in industrial engineering. He secured a coveted engineering trainee job at Ford in 1946, but deferred his start until he completed his masters degree at Princeton.

Joining Ford Motor Company as an engineering trainee in 1946, Iacocca soon entered the fast lane of sales. With the force of a muscle car and the maneuverability of a racing vehicle, in 1960, at age 36, he sped into the vice-presidency and general managership of the company's most important unit, Ford Division. In 1964, with others on his staff, he launched the Mustang, which, thanks to brilliant styling and marketing, introduced a new wave of sports cars, set a first-year sales record for any model, gave its name to a generation, and landed its creator's picture on the covers of TIME and Newsweek simultaneously.

In 1960 Iacocca was named Ford's vice-president, car and truck group; in 1967, executive vice-president; and in 1970, president. Pocketing an annual salary and bonus of $977,000, the flamboyant executive also earned a reputation as one of the greatest salesmen in U.S. history. Of Iacocca, it has been said that he was always selling, whether products, ideas—or himself.

From Ford to Chrysler

Iacocca was discharged from Ford Motor Company in June 1978 by Chairman Henry Ford II for reasons Ford never disclosed, but obviously relating to the chairman's distaste for having Iacocca succeed him. Though bitter at being dismissed from Ford, Iacocca was not out of the car business for long. Five months after his firing, Iacocca was named president of Chrysler (becoming chairman in 1979) and began transforming the number three automaker from corporate history's number one deficits manufacturer into a highly-profitable enterprise.

How was Chrysler turned around? By downsizing expenses to a much lower break-even point, by winning approval of $1.5 billion in federal loan guarantees, by selling off profitable units such as the tank division, and by introducing timely products. In addition, Chrysler welcomed, for the first time in U.S. corporate history, a union president to a board of directors. In 1984 the company posted profits of $2.4 billion (higher than in the previous 60 years combined), and in 1985 it bought Gulfstream Aerospace Corporation for $637 million and E. F. Hutton Credit Corporation for $125 million.

In the early 1980's Chrysler issued the K-car and what would later become its meal ticket—the minivan. Just as the Mustang re-established the sports car for Ford, the minivan would be loved by the young family in need of room and efficiency and revitalize Chrysler. In 1983, Chrysler paid the government back its loans and Iacocca became a star, a symbol of success and the achievement of the American Dream.

Along with spearheading Chrysler's resurgence, Iacocca assumed various civic responsibilities, most notably the chairmanship of the President's Statue of Liberty-Ellis Island Centennial Commission, set up to raise funds for and to oversee restoration of the two monuments. If Iacocca attained prominence through business stewardship, television commercials, and identification with the Statue of Liberty, he gained much additional exposure through his 1984 autobiography. Iacocca: An Autobiography, the best-selling nonfiction hard cover book in history, had two million copies in print by July 1985. Most readers seemed to accept the volume as near-gospel, while others ventured that Iacocca's achievements had lost nothing in the telling and that the author was overly vindictive toward Henry Ford II.

Folk Hero

By the mid-1980s Iacocca had achieved folk-hero status. Typically, the Saturday Evening Post described him as "the sex symbol of America" the Reader's Digest as "the living embodiment of the American dream" and TIME as "a corporate capitalist with populist appeal, an 'eminence terrible' admired by working class and ruling class alike." Talk of Iacocca-for-President became increasingly widespread, and a 1985 poll of 1988 presidential preferences showed that the cocky industrialist trailed Vice-President George Bush by only three percentage points (41 to 38 points).

The late 1980s and early nineties were not as kind to Iacocca. His public image, like Chrysler's earnings, began to fall off. At a time when the American people, in the grip of a recession, renounced the huge paychecks of executives whose companies were ailing, Iacocca who had once achieved a publicity coup when, for a time, he only accepted one dollar a year from Chrysler, was paid a 1987 salary of $18 million. In addition, Iacocca, lambasted Japanese trading practices, blaming them for the ills that American car manufacturers had suffered. Critics cited that the American public believed that Japanese cars were superior and instead of criticizing the Japanese, Iacocca's car company should have been emulating them. At the end of 1992, Iacocca was forced to retire after he had bettered the position of the company for a merger or takeover. He remained a consultant to Chrysler (with a $500,000 a year salary and use of the company jet) until the end of 1994.

In 1995, Iacocca announced that he was suing Chrysler, claiming that it unlawfully blocked him from exercising $42 million in share options that he had earned while he was the chairman. Chrysler claimed that Iacocca's role as an adviser to Kirk Kerkorian, the investor who wanted to purchase the company, violated the share option plan agreement. Although Kerkorian's bid failed to materialize because he was unable to raise the financing, Chrysler agreed to pay Iaccoca $21 million to settle the lawsuit. Iacocca continued to work as Kerkorian's consultant.

Iacocca and Mary McCleary were married in 1956 and had two daughters, Kathi and Lia. Mary died of diabetes in 1983, and in her memory, Iacocca donated his book earnings to diabetes research. In 1986 Iacocca married Peggy Johnson (born 1950), an advertising executive from whom he was divorced in 1996.

Further Reading

The primary source of information about Iacocca is the executive's best-selling Iacocca: An Autobiography (1984), although critics say it was written mostly to stroke Iacocca's ego and to vilify Henry Ford II. David Abodaher's Iacocca (1982), written by an employee of Chrysler's advertising agency, ceaselessly praises the automaker while providing interesting anecdotal material. Perhaps the best of the numerous magazine and newspaper stories on the magnate are New Republic's "What's So Great About Lee Iacocca?," July 16 and 23, 1984; Newsweek's "Behind the Wheels," October 8, 1984; the New York Times's "The Importance of Being Iacocca," December 23, 1984; and Time's "A Spunky Tycoon Turned Superstar," April 1, 1985. Detroit News, "Retirement has been a rough ride for Iacocca," June 1996; Automotive News, June 1996. □

Lee Iacocca

Born: October 15, 1924
Allentown, Pennsylvania
American businessman and auto industry executive

After a thirty-two year career with Ford Motor Company, including eight years as president, Lee Iacocca engineered one of business history's greatest comebacks at Chrysler Corporation. His success, coupled with appearances in television commercials and his best-selling book, made him one of the nation's most known and admired businessmen.

Early life

Lido Anthony Iacocca was born October 15, 1924, in Allentown, Pennsylvania, the son of Italian immigrants Nicola and Antoinette. Iacocca grew up in comfortable surroundings learning the nuts and bolts of business from his father who worked as a cobbler, hot dog restaurant owner and a theater owner. Nicola was a businessman who taught his son about the responsibilities of money and the need for a strong drive and a great vision in order to build a thriving business. Nicola also ran one of the first car rental agencies in the country and passed on his love of the automobile to his son.

Iaccoca's enlistment in the military during World War II (19139–45) was denied because of his childhood battle with rheumatic fever, a terrible disease that can cause permanent damage to the heart. He earned an undergraduate degree in engineering from Lehigh University and later earned a master's degree from Princeton University. Even as a teenager, Iacocca decided that he was going to be an automobile company executive and focused his studies in that direction. He secured a much sought-after engineering trainee job at Ford Motor Company in 1946, but put off his start until he completed his master's degree at Princeton.

At Ford Motor Company

Joining Ford as an engineering trainee in 1946, Iacocca soon entered the fast pace of sales. In 1960, at age thirty-six, he sped into the vice presidency and general managership of the company's most important unit, Ford Division. In 1964, with others on his staff, he launched the Ford Mustang, which, thanks to brilliant styling and marketing, introduced a new wave of sports cars, set a first-year sales record for any model, gave its name to a generation, and landed its creator's picture on the covers of Time and Newsweek.

In 1960 Iacocca was named Ford's vice president of the car and truck group; in 1967, executive vice president; and in 1970, president. Pocketing an annual salary and bonus of $977,000, the flashy executive also earned a reputation as one of the greatest salesmen in U.S. history. Of Iacocca, it has been said that he was always selling, whether products, ideas—or himself.

From Ford to Chrysler

Iacocca was let go from Ford Motor Company in June 1978 by Chairman Henry Ford II for reasons Ford never revealed. Though bitter at being dismissed from Ford, Iacocca was not out of the car business for long. Five months after his dismissal, Iacocca was named president of Chrysler (becoming chairman in 1979) and began transforming the number three automaker from a sluggish moneymaker into a highly profitable business.

How was Chrysler turned around? By downsizing (to make smaller) expenses to a much lower break-even point; by winning approval of $1.5 billion in federal loan guarantees; by selling off profitable units such as the tank division; and by introducing timely products. In addition, Chrysler welcomed, for the first time in U.S. corporate history, a union president to a board of directors. In 1984 the company posted profits of $2.4 billion (higher than in the previous sixty years combined), and in 1985 it bought Gulf-stream Aerospace Corporation for $637 million and E. F. Hutton Credit Corporation for $125 million.

In the early 1980s Chrysler issued the K-car and what would later become its best seller—the minivan. Just as the Mustang reestablished the sports car for Ford, the minivan would be loved by the young family in need of room and efficiency and revitalize Chrysler. In 1983 Chrysler paid the government back its loans and Iacocca became a star, a symbol of success and the achievement of the American dream.

Along with spearheading Chrysler's rise, Iacocca took leadership roles in many noteworthy causes, most notably the chairmanship of the President's Statue of Liberty-Ellis Island Centennial Commission, which was set up to raise funds for and to oversee restoration of the two monuments in New York City. While Iacocca gained a worldwide reputation through business leadership, television commercials, and association with the Statue of Liberty, he gained much additional exposure through his 1984 autobiography (a book written by someone about their life). Iacocca: An Autobiography, the best-selling nonfiction hardcover book in history, had two million copies in print by July 1985.

Folk hero

By the mid-1980s Iacocca had achieved folk-hero status. The Saturday Evening Post described him as "the sex symbol of America" and Reader's Digest as "the living embodiment of the American dream." Talk of Iacocca-for-president became increasingly widespread, and a 1985 poll of 1988 presidential preferences showed that the cocky industrialist trailed Vice President George Bush (1924–) by only three percentage points (41 to 38 points).

The late 1980s and early 1990s were not as kind to Iacocca. His public image, like Chrysler's earnings, began to fall. At a time when the American people, in the grip of a recession (a temporary slowing of the economy), criticized the huge paychecks of executives whose companies were hurting, Iacocca who had once achieved a publicity coup (takeover) when, for a time, he only accepted one dollar a year from Chrysler, was paid a 1987 salary of $18 million. In addition, Iacocca, criticized Japanese trading practices, blaming them for the ills that American car manufacturers had suffered. Critics stated that the American public believed that Japanese cars were superior and instead of criticizing the Japanese, Iacocca's car company should have competed with them. At the end of 1992, Iacocca retired. He remained a consultant to Chrysler, with a $500,000 thousand a year salary and use of the company jet, until the end of 1994.

In 1995 Iacocca announced that he was taking Chrysler to court, claiming that it unlawfully blocked him from exercising $42 million in share options that he had earned while he was the chairman. Chrysler claimed that Iacocca's role as an adviser to Kirk Kerkorian, the investor who wanted to purchase the company, violated the share option plan agreement. Although Kerkorian's bid failed to materialize because he was unable to raise the financial backing, Chrysler agreed to pay Iaccoca $21 million to settle the lawsuit. Iacocca continued to work as Kerkorian's consultant.

Iacocca and Mary McCleary were married in 1956 and had two daughters, Kathi and Lia. Mary died of diabetes (a blood disorder) in 1983, and in her memory, Iacocca donated his book earnings to diabetes research. Two later marriages, to advertising executive Peggy Johnson (1986) and restaurateur Darrien Earle (1990), ended in divorce. In 1999 Iacocca announced his latest venture, E-bikes. Iacocca believes these electronically motorized bikes will take the place of mopeds and other loud and polluting vehicles in crowded urban areas. Only time will tell if Iacocca's latest work will be as popular as his previous successes.

For More Information

Abodaher, David. Iacocca. New York: Macmillan, 1982.

Haddock, Patricia. Standing Up for America: A Biography of Lee Iacocca. Minneapolis: Dillon Press, 1987.

Iacocca, Lee. Iacocca: An Autobiography. New York: Bantam Books, 1984.

Iacocca, Lee A. Talking Straight. New York: Bantam, 1988.

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.

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.

Lee Iacocca (Lido Anthony Iacocca) , 1924–, American business executive, b. Allentown, Pa. In 1946 he joined the Ford Motor Company, where he rose to president (1970–78). He left the company after a dispute with Henry Ford II and became president (1978) and then chairman (1979) of the Chrysler Corp., restoring it through shrewd financial policies, a $1.2 billion loan guarantee, and tax concessions granted by Congress. In the 1980s, he also served as chairman of the Statue of Liberty–Ellis Island Foundation and engineered Chrysler's $1.5 billion acquisition of American Motors. Iacocca retired at the end of 1992, but in 1995 he aided billionaire Kirk Kerkorian in his unsuccessful attempt to win control of Chrysler.

Bibliography: See his autobiography, written with W. Novak (1984); P. Wyden, The Unknown Iacocca (1987); D. P. Levin, Behind the Wheel at Chrysler (1995).