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Lee Iacocca could have saved American automakers—again

Almost 38 years ago, a bare-bones Plymouth Reliant “K” sedan rolled up into our driveway and my father stepped out of the thing with a look of unconcealed disdain on his face. I was there before he applied the parking brake, anxious to see the car that was going to save Chrysler. His brokerage had just taken a fleet delivery of a half-dozen or so Reliants, largely on the strength of my recommendation as his company’s “auto expert,” and I’d begged him to bring one home as soon as he could.


This is a companion discussion topic for the original entry at https://www.hagerty.com/articles-videos/articles/2019/07/03/lee-iacocca-could-have-saved-american-automakers-again
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Knocked that one right outta the park, Jack!

Well done, sir.

  • Jim
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Great job! The “electric” future is by decree, not by demand. You nailed it! Given the fact that the US is now an oil exporter, we should be promoting the use of petrol (even for national security) and not by tying our hands behind our back by forced compliance with ridiculous CAFE standards designed to deal with a mid 1970’s oil shortage!

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@kq6ea, Agreed.

And as if Mr. Baruth wanted an example of his description of modern auto industry leadership, and in particular how detached and narcissistic Fiat-Chrysler has become, he might read that company’s statement on Iacocca’s passing. To me at least, it seemed to be more of a commercial script, with all the feigned sincerity of a Jimmy Swaggert sermon.

The Company is saddened by the news of Lee Iacocca’s passing. He played a historic role in steering Chrysler through crisis and making it a true competitive force. He was one of the great leaders of our company and the auto industry as a whole. He also played a profound and tireless role on the national stage as a business statesman and philanthropist.

Lee gave us a mindset that still drives us today – one that is characterized by hard work, dedication and grit. We are committed to ensuring that Chrysler, now FCA, is such a company, an example of commitment and respect, known for excellence as well as for its contribution to society. His legacy is the resiliency and unshakeable faith in the future that live on in the men and women of FCA who strive every day to live up to the high standards he set.

He was one of the best spin doctors around. I’m not saying that’s a bad thing, but in the last few decades, these CEO’s that try to embody the guru mold take a lot from his book.

He was involved with the Lambo purchase, right? And didn’t the Viper come out while he was there? He definitely made me interested in Dodge and Chrysler when I was a kid.

But try to put yourself in his shoes. He even said his own interests were unrelated to the interests of the masses. How soul-crushing would it be to know exactly how to spin everything from what to tell the regulators to what to tell the union bosses to what to tell the customers?

He came from a different time, and CEOs that try to be like him today are about as useful as that Maserati badge on that Chrysler TC.

Really good read. I didn’t realize that all the 80’s Chrysler product was built off of one platform. After looking back at the product mix it definitely makes sense to me.

Lido was an excellent business man and a leader in an industry that at the time needed one. The industry
currently needs another Lido.

He was a businessman like no other. He could make Americans feel like patriots for purchasing second rate cars by wrapping them in extended warrantees and himself in an American flag. We all knew what he was doing, but we respected why he was doing it and we bought in. Today, the few remaining 1980s K based cars around remind us of the last of the Greatest Generation’s true belief in America, but the products themselves remind us how little their was to get excited about. Maybe Lee was Corporate America’s version of Uncle Sam, or their version of P. T. Barnum; and it probably doesn’t even matter anymore. Lee’s death is yet another loss of a part of American that doesn’t exist anymore … and that is sad.

Excellent article or should I say eulogy. Lee Iacocca is one of the main reasons, (and this well written piece explains why so perfectly), I would like to see Congress pass a tax bill that bases the tax a PUBLICLY TRADED CORPORATION pays, on the difference in average total compensation between the top 3 or 4 employees (executives) and the bottom 15%. For example, if the gap as a ratio is above 500:1, the corporation pays 90%. On the other end if the gap is 25:1 or less, they pay 5%. Sounds odd coming from a conservative, doesn’t it? I have other game-changing ideas.

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Nice job re: Iacocca tibute, but hatchet job on current auto management nsg. Shows a complete lack of understanding of the current auto business.
Companies addressing the future with electric and providing some of the highest-performance vehicles ever made at the same time is amazing. Barra is selling the Bolt and introducting a mid-engine Corvette and you’re knocking her? That’s exactly what Lee Iacocca would have done!
The fact that Ford is falling behind and probably going under the thimb of VW—that’s the Ford playbook, when you go outside you might get a Mulally but chances are you’ll get a furniture salesman.
The fact that most Americans want silly 4wd vehicles is just that , a fact…so FCA is selling all these terrible Jeeps and can’t move an Alfa or a Fiat—that’s the market! The fact that the cars are so unreliable…that’s FCA, and no matter how much you sugar-coat your 10-yr-old experience, it’s a legacy of the K-car.
Times have changed, need to stay current and look to the future!

So, Jack, how do you really feel about today’s management? Well done!

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There is either an immense lack of vision or we are in a prolonged game of preparing for mergers (why abandon entire market segments unless you intend to merge with the German/Korean/Japanese companies serving them fully?)

K cars were cheap. So were Neons. So are other things… K cars though were a stable platform for years with lots of parts so they lived full lives in the 5-15 year old market before they rusted away or fell apart. Most automakers are on this trend of change for the sake of change… which just adds to the cost of ownership in the secondary market… I applaud FCA for keeping the Charger/Challenger etc. on the same “ancient” platform.

I’m saddened that we don’t have more “catalog” models… that is to same a car that doesn’t change year to year. Model T, Volkswagen Beetle, Squarebody GM trucks exemplify this.

GM could take the 1970 Chevelle design, redo it as a unibody (if they must) with all modern required safety features… and like sell hundreds of thousands of coupes, 4 door sedans and wagon variants --and not change the design for 10 years (maybe some grills here and there) and recoup the development costs over and over .

It’s an unwillingness to think about it differently. Car business plays it safe and stays on train tracks (i.e., electric future is the only way, we do 4-5 year generations that obsolete most parts, etc.). The best asset the Big 3 have is iconic design & history… but we offer bland sedan/suv/crossovers that look like everyone else’s and wonder where the passion has gone…

Lee Iacocca lived with passion. It’s more impressive that he wasn’t just Mustang, minivan prototypes existed in the early 70s at various companies but went nowhere. He was willing to go for it.

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I’m going to take the opposite tack. Granted he did some great things but he also did some not so great things. Remember his tag line in the 80s commercials? If you can find a better car, buy it. Well that was exactly what Americans did they bought Honda and Toyota as they were the better car. I did. Granted K cars saved Chrysler but they had their issues. Minivans, a great idea also saved Chrysler, but they had their issues also.

Lastly he didn’t evolve over time with changing tastes. Take the K Aires and throw some Brougham on it and call it the New Yorker. Stretch it a little and call it the Fifth Avenue. Bring back Imperial whose underpinnings fooled no one and combine it with poor driveability issues and the first version dies. The second version, in the early 90s, was now behind the times. Lee did like his padded roofs, opera lights and other flash but consumers were moving on and wouldn’t be fooled. The Mark III was no longer in.

I’m not sure Chrysler would have survived Iacocca all through the 90s as he was a product of the late 50s and 60s where you told the buyer what they needed whereas today buyers tell you what they need. One more point is that in 1980 Ford posted a $1.5 billion dollar loss. Second biggest by any US company. That was on Iacocca and it took Donald Petersen to turn it around with cost cutting, new models, revamped thinking. Ford went from 17% in 1980 to 21% in 1989 and earning more profits than GM. Could Iacocca have done that had not HKII not fired him in July 1978? I don’t think so.

Well said. Certainly one of my all time business greats of the pre PC era. A PC era that is so damaging to the truth in business.

That said the US can no longer compete internationally because much of the labour force is overpaid for it’s productivity & skill level. Time to upskill for the same pay or suffer the consequences.

Good article. Lee ~ you & your kind will be missed

Let me fix that for you, as another conservative alluded to in this thread.

Much of the CEO force is overpaid.

There.

Fixed it for you.

Kyle

I agree ~ both situations apply. No need to be patronizing.

Erm, pretty much everything you accuse current CEOs of, Iacocca was floridly guilty of.

  • Huge compensation? Check. His $1 initial compensation was, by 1986, $20.5M. In 1986 dollars. That would have dwarfed Ms. Barra’s current comp, and in 1986 it dwarfed that of every other Fortune 500 CEO.

  • Shoving “progress” down the throats of the consumer. I don’t know what the hell version of the 1980s you lived through, but the conventional wisdom of the day was that we missed powerful engines in rear-wheel drive chassis. GM and Ford brought such things back by 1985 or so, in Impalas, LTDs, Mustangs, and Camaros. Ford, of course, won the mid-1980s with the Taurus and Sable, which showed that progress could include the traditional American car virtues of a good ride, space, and torque. Iacocca embraced the fuel-efficient 4-cylinder engine in light, tinny, FWD cars. They were reasonably durable, but nobody at the time had anything nice to say about how they drove. They were the cars you drove if you couldn’t afford anything better.

  • He was legendary rough on the UAW. He forced Chrysler employees to accept lower wages than their GM and Ford peers, in exchange for the purely symbolic installation of a UAW rep on the Chrysler Board.

  • After he stepped down from the CEO role, he partnered with Wall St.'s quintessential corporate raider, Kirk Kerkorian, to try a leveraged buyout of Chrysler. This failed, but was a huge distraction for his successors in the C-suite … who later led the company to record profits in the mid-1990s after they introduced some updated LH-chassis cars.

  • A “product” man? This is the guy who forced Chrysler to milk the crappy K-car chassis well into the early 1990s, long after Ford’s game-changing Taurus and the leap-frogging improvements of the 1990 Accord and Camry.

  • Despite running the company on just one platform and one engine, Chrysler still managed to lose money by the end of Iacocca’s tenure.

Iacocca was decidedly a mixed bag, a person who saved Chrysler once, but then drove it back to the brink of destruction with a mix of crappy product and outdated thinking.

May he rest in peace.

The man had guts. He did what HE thought was right. I will always respect him for that.

When compared to Roger Smith (GM) Lee was open minded. When Ross Perot sold E systems to GM, he got a seat on the GM board. He got kicked off because he pointed that GM wasn’t investing in infrastructure (Machinery). They seemed to be only interested in the bottom line. Perot “outed” poor quality in the GM product lines.
Had GM listened would Toyota and others gotten the foothold in this country as fast as they did? would have peer pressure raised the quality level?
I knew a guy who bought a new '82 Buick, the car had basic construction flaws; The “A” pillar on one side wasn’t straight, they couldn’t get the windshield leak fixed without a lot of caulk, the stitching in the front seat unraveled. both items were fixed under warrantee but if you expect a Buick to be a quality product, they never should have existed. This was the American car manufacturer mindset of that era. As Lee said, “If you can find a better car; Buy it.”

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Pretty sure He did not save the car company as much as Uncle Sam did. They made the M1 Abrams tank and got a bail out in 1979. (again in 2009)

During the Reagan years all government agencies got those ugly cars to drive.

Having worked for said German automaker, 12 years after the separation I can’t understand whom that merger was supposed to save or benefit… unless you count all the failing 5G-Tronic transmissions and steering racks in Jeeps (come on, Mercedes was and will always be the king of the worm-and-sector box)