Lee Iacocca is a man who brought Chrysler back from the brink and behind the Ford Mustang. Here is the story of this great leader we lost on July 2, 2019.
As much as we bemoan the crossover, drastic changes to famous nameplates, and anything else we can complain about when it comes to our favorite vehicles – many times it’s those decisions that help keep a company afloat in best and worst times. Even though we feel so strongly about our niche cars and trucks, it’s the vehicles the average person buys that keeps those niche automobiles a reality. It’s leaders like Lee Iacocca that realize this and put forth the ideas that keeps our favorite brands alive.
From Engineer to President
Iacocca, upon graduating both Lehigh University with an engineering degree and a fellowship tenure at Princeton University, was hired at Ford Motor Company as an engineer in 1946. He would soon find that particular desk job wasn’t for him and requested to be moved to a sales and marketing role.
This ended up with him as an assistant sales manager for the Philadelphia district and creating a successful sales campaign. The “56 for ‘56” where loans were offered on then new 1956 Ford models with monthly payments of $56 for three years after a 20-percent down payment. This worked so well that it went nationwide, and he moved to Dearborn, MI and home of Ford’s global headquarters. As Iacocca stated on his website, “It didn’t take long for me to realize that I was better suited to the sales and marketing side of the car business. The bosses agreed and soon I made the move.”
By 1960, Iacocca went from regional sales manager to vice-president and general manager of the Ford division. From there he went on to become vice-president of the car and truck group of Ford Motor Company in 1965, then executive vice-president in 1970, and finally president of Ford Motor in on December 10, 1970.
A Big Horse and A Small Horse
However, it was his tenure as general manager of the Ford division that people took notice of him. He and his assistant general manger and chief engineer, Donald Frey, were working on the T-5 Project. The T-5 was a two-seat, mid-mount engine roadster using the German sourced Tanus V4. This would eventually morph into a coupe that could seat four instead, with many crediting the success of the Thunderbird’s change of being a two-seat sports car to a “2+2” seating arrangement.
This was concepted along with four other goals during its new design: weight no more than 2500-pounds and no longer than 180-inches in length, sell for less than $2500, and have multiple options for power, comfort, and luxury. Of the three design studios tasked, it would be the Lincoln-Mercury design to win the idea. The Ford Mustang was born and started with its iconic convertible and hardtop with the fastback introduced in 1965.
Other cars under his watch included the Lincoln Continental Mark III, Ford Escort, and the Ford Pinto as well as a revival of Mercury with the Cougar and Marquis. While it would be initially ill fated, the Pinto was also Iacocca’s vision of the upcoming future. Even as early as 1968, he saw the need for a US domestic car that was small, lightweight, and fuel-efficient. The Pinto was pushed by Iacocca so much that it was named “Lee’s Car” by everyone involved at Ford. It went from concept to production model in just 25-months, unusual at the time due to the 43-month concept to production timeframe of most vehicles.
Justification for the Pinto
By 1970, the Pinto was born and proved to be car Ford needed in 1973 as the oil crisis hit in October. This was caused by the embargo placed by the Organization of Arab Petroleum Exporting Countries (OPEC) and looked to hurt Canada, Japan, the UK, and the US. During its lifetime, there would be a second crisis in 1979 with the Iranian Revolution.
While production only took a four-percent hit (over the 25-percent output cut at the height of the 1973 crisis), it was the panic from the previous embargo that sent prices skyward and lines at the gas stations stretched to many, many blocks. There were two other cars Iacocca had in his pocket while at Ford but he would soon leave, but not by his own choosing.
Iacocca Ventured, Chrysler Gained
While president of Ford Motor Company, his successes were hindered by his constant clashes with Henry Ford II. Even with a start of posted profit of $2 billion in 1978, Iacocca was fired by July 13 of that year. Recalling on his site, Iacocca stated, “Our success continued into the 70s, but by the end of the decade Henry Ford II and I could no longer co-exist. In 1978, I was fired despite the fact that we’d netted a $2 billion profit for the year. Of course, though I may not have realized it at the time, some of my best years were still ahead of me.”
Later in 1978, Chrysler Corporation convinced Iacocca to join them. Many didn’t see it as a smart move: it was losing money due to heavy losses at Chrysler Europe. Add in recalls of the F-body Dodge Aspen and Plymouth Volare due to stalling and difficulty starting (even after turning the cars off and letting them sit for several minutes) and it was clear that they were due for a bankruptcy. Iacocca would be their saving grace for several reasons. “To save the company, I had to lay off some workers, sell off our European division and close several plants,” he again recalls on his site.
The layoffs and sale of the European Division to Peugeot weren’t enough, they were still losing millions of dollars and would not survive without more drastic measures. By 1979, Iacocca approached the United States Congress and they in turn provided $1.5 billion as a loan under the Loan Guarantee Act. It didn’t come without strings, though. The Turbine Engine was dropped after 20 years of development and a production ready model and Chrysler would need to obtain $2 billion in concessions or aid from outside of the federal government. This included tax concessions, interest rate reductions for loans to Chrysler, a $50 million stock offering, $590 million in wage reductions, and $180 million in concessions from dealers and suppliers.
The Car that Saved Chrysler
It worked and then some. By 1983, the loans from Congress were repaid in part thanks to agreements with auto unions and management with plant closures and salary cuts. However, it was the success of the K-car – a project that Iacocca brought over with him to Chrysler – that helped them repay early and with interest. The K-platform was a cost-cutting design that was based slightly off the L-cars, the Plymouth Horizon and Dodge Omni. It was transverse front-engine, front-wheel drive design with a coil sprung, beam axle rear that used trailing arms and a track bar to locate it.
The K-car was so successful that it would eventually go one to underpin fifty different models. This would include the Dodge Aries K, Chrysler New Yorker Turbo, Dodge Shadow, Shelby CSX, Chrysler LeBaron, and the Dodge Daytona C/S. Dodge even took the Daytona racing in IMSA GTU, but it would compete as both a front-wheel drive and rear-wheel drive on the same chassis. You could switch between the drivetrains of the two cars for different track types. Through the 1980s, Iacocca appeared in commercials for the K-cars and as well as their future vehicles. In those, he would tell everyone that “The pride is back,” or use his trademark phrase: “If you can find a better car, buy it.”
The Vehicle Cool Dads Love to Hate
That wouldn’t be the only Ford holdover he would introduce to the world. Iacocca’s dream was the “Mini-Max” project. Once he brought over Hal Sperlich from Ford, they worked to make it a reality. “Together,” says Iacocca, “we spearheaded development of a prototype we’d initially kicked the tires on at Ford – the minivan. The minivan was a phenomenal success, and a precursor to the SUV.” In November of 1983, the Dodge Caravan and Plymouth Voyage were introduced to the world and the US changed forever. Gone were the days of station wagons and in came the minivans and, soon, SUVs.
No Lee, No Jeep
After expanding the relationship with Mitsubishi and forming Diamond-Star Motors – Diamond for Mitsubishi and Star for Chrysler – in 1985, a new manufacturer was eyed. 1987 saw the acquisition of American Motors Corporation (AMC) and Jeep by first purchasing the 47-percent stake held by Renault. August 5, Chrysler bought the rest of AMC that was valued between $1.7- and $2 Billion. This established the Jeep/Eagle division of Chrysler. While that was important, it was the development of the Jeep Grand Cherokee ZJ that Iacocca wanted to see come to fruition. It would eventually come out, but after Iacocca retired in 1992.
That’s not to say there weren’t important Jeeps under his leadership. The Jeep Wrangler YJ began in 1987 until 1995, the XJ Cherokee and Wagoneer along with the Comanche MJ were continued with Iacocca and the SJ Grand Wagoneer held on until 1991. Important concept Jeeps included the Comanche Thunderchief that became the Comanche Eliminator in production. You can also credit the 1989 Rubicon Wrangler concept that would be put into production in 2002 as a trim level with the TJ Wrangler.
And, again, the ZJ was created eventually but was first a concept in 1989 as the “Jeep Concept 1.”
One Bad Snake
We also have Lee Iacocca to thank for the Dodge Viper. While Bob Lutz and Tom Gale helped create the “modern Shelby Cobra” in 1988, it would still need the approval of Iacocca. It came in May of 1990 and a year later two pre-production Vipers were used as pace vehicles for the Indianapolis 500. In January 1992, the Dodge Viper RT/10 Roadster was released to the public. It was absolutely considered a wild animal for the time.
It didn’t have traction control or anti-lock brakes to keep the car in check. There wasn’t air-conditioning, no exterior door handles or locks, no air bags for driver or passenger – it was a driver’s car and a great homage to Carrol Shelby’s own snake and he even approved by driving one of those pre-production pace cars. To top it off, the engine block was designed by Lamborghini, but it was based off the Chrysler LA-engine. What they created was a 400-horsepower, 8.0-liter (488-cubic-inch) pushrod, aluminum block V10. The 8.3-liter version of that engine – the third generation ZB I – would also be used in the 2004 Dodge Ram SRT-10.
Retirement, Sort Of
“When I retired from the company in 1992,” said Iacocca, “it was in great shape. I was 68 years old and frankly, feeling a little bored.” It was only three years later when he would assist billionare Kirk Kerkorian’s unsuccessful hostile takeover at Chrysler. This would end up forcing a five-year agreement between Kerkorian and Chrysler in which Iacocca could not speak publicly about the company due to a gag order.
Ten years later, Iacocca would return but as a pitchman for now DiamlerChrysler and joined Jason Alexander and Snoop Dogg. They were promoting the “Employee Pricing Plus” and saw the return of Iacocca’s famous trademark, “If you can find a better car, buy it.” While he was paid for his services, DiamlerChrysler added a $1 per vehicle sold donation to the Iacocca Foundation, a charity founded by Iacocca for type 1 diabetes research.
He founded it after the passing of his wife, Mary, in 1983. He had hoped through his focus on the foundation during his retirement, we would find a cure in his lifetime. Sadly, we are still searching for it though the 2004 “Join Lee Now” campaign helped bring Denise Faustman’s research to human clinical trials in 2006.
The Iacocca Foundation wasn’t his only causes of outreach and donations. In May of 1982, he as appointed by President Ronald Reagan to head the Statue of Liberty-Ellis Island Foundation, raising funds to restore the Stature of Liberty. The restoration was completed in time to be unveiled on July 4, 1986.
In 1997, at the Iacocca Institute at Lehigh University, The Global Village for Future Leaders of Business and Industry was started. A program that continues today and is billed as “a five-week intensive program for leadership experience” that “helps you build cross-cultural leadership, professional, business and entrepreneurship skills” and “preparing you to thrive in a global community.”
In 2002, he became involved with Nu Skin’s “Nourish the Children” program, again a program that continues today. However, it is a co-venture in which their brand affiliates and customers purchase their VitaMeal and donate it to charitable programs, so they still turn a profit margin on the purchase. They are open about this on their site.
I Like I
Iacocca was also very outspoken when it came to politics. It started in 1988 when he considered running for President and even planned a campaign before Tip O’Neill talked him out of it. He’s endorsed candidates for President and Governor for both sides. 2000, he endorsed George W. Bush but backed John Kerry in 2004. 2008, he endorsed New Mexico Governor Bill Richardson but moved on to Mitt Romney in 2012.
He wasn’t playing both sides, but rather people he saw common ground with. People who were trying to enact real change in education, health care, and energy. As he stated, “In most of these cases, the so-called leaders charged with confronting these problems are only compounding them with their lack of accountability and often questionable motives. Instead of looking for real solutions, they seem to be looking out for number one.”
He scored everyone with the “9Cs of Leadership”: Common Sense, Communication, Creativity, Conviction, Competence, Courage, Character, Charisma, and Curiosity. They were his ideal roadmap for everyone to choose leaders through a scoring system based off those qualities he felt made the best leader. “They are relevant in every area of life,” Iacocca stated, “whether choosing the next President of our country or the president of the PTA.”
Even after his retirement, even now after his passing, Lee Iacocca had impact on the places he was connected to: Ford and Chrysler. While Chrysler has had a second major loan and repayment, it was the ideas of Iacocca that helped them survive to become FCA North America. “Lee gave us a mindset that still drives us today,” FCA put into a statement on his passing, “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.”
Even with Henry Ford II and Iacocca’s strained relationship and firing, Bill Ford, Executive Chairman of Ford Motor Company, still thinks of Lee Iacocca fondly. “Lee Iacocca was truly bigger than life and he left an indelible mark on Ford,” Bill Ford recalled, the auto industry and our country. Lee played a central role in the creation of Mustang. On a personal note, I will always appreciate how encouraging he was to me at the beginning of my career. He was one of a kind and will be dearly missed.”
Lee Iacocca, while at his Bel Air, Los Angeles home, left our world on July 2, 2019 at 94 years old. The world lost a true leader while the automotive world lost a huge icon.