Wednesday 21 August 2019

Obituary: Lee Iacocca

Titan of the US motor industry who launched the Ford Mustang, revived Chrysler, and bought out Lamborghini

Plain speaker: Lee Iacocca with Ford Mustangs
Plain speaker: Lee Iacocca with Ford Mustangs Newsdesk Newsdesk

Lee Iacocca, who died last Tuesday aged 94, was a car-industry executive who acquired such a heroic reputation for his rescue of Chrysler that his name was touted as a potential candidate for US president.

Iacocca spent 32 years with Ford before joining Chrysler as its president in 1978. His sacking by Henry Ford II was one of the most famous dismissals in modern corporate history, and his determination to drag Chrysler back from the brink of bankruptcy was partly an act of vengeance.

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Once the world's sixth largest car-maker, Chrysler had been brought low by a failure to modernise and growing Japanese competition. Between 1978 and 1981 it lost $3.5bn (€3.1bn) and was kept alive only by an Act of Congress and a government guarantee of its $1.5bn (€1.3bn) debts. Iacocca laid off 82,000 workers and closed 16 factories.

But he invested in ground-breaking new models - the mini-van, forerunner of people carriers, and the front-wheel-drive K-car. And he brought his pugnacious style to TV adverts: "If you can find a better car," he barked, "buy it." At a time of uncertainty and deepening recession, Iacocca offered the charisma Americans yearned for. He became a national hero.

Chrysler recovered to make profits of $2.4bn (€2.1bn) in 1983, more than the combined total of its 60-year history and 41,000 laid-off workers were rehired.

Having accepted a token $1 salary at the lowest point of the crisis, Iacocca became the highest-paid executive in America, earning more than $20m (€17.7m) a year.

He revelled in the fame and in his plain-speaking style, scattered with profanities, he became a tireless pundit on the US economy.

In 1982, President Reagan appointed Iacocca chairman of the Statue of Liberty commission, which raised $77m (€68m) to restore the statue and immigration buildings on Ellis Island. Colleagues on the commission said Iacocca choked with emotion whenever he visited the site.

When it reopened in 1986, Iacocca's popularity rating was second only to that of Reagan himself. The suggestion he might stand as a Democratic candidate for the presidential nomination in 1988 gained wide currency. In one early poll, he outpointed Republican vice-president George Bush by 47pc to 41pc.

But Iacocca recognised he lacked real instinct for politics and chose to remain at Chrysler. The remainder of his tenure was fraught with difficulties and by 1993 his reputation had faded.

Lido Anthony Iacocca, known as Lee, was born in Allentown, Pennsylvania, on October 15, 1924. His father Nicola, an Italian who arrived through Ellis Island as a 12-year-old, achieved modest wealth from car hire and hot-dog stands.

Lee was educated at Allentown High School and Lehigh University, where he studied engineering. Excused war service because of childhood rheumatic fever, he went to Princeton and joined Ford in 1946.

Iacocca was briefly a design engineer before transferring to sales, his true metier. He rose rapidly through the hierarchy, becoming head of the Ford car division in 1960.

In 1964, he launched the Mustang, a sports saloon with an elongated bonnet that became a classic.

He became president of Ford in 1970, the year the Pinto was introduced. The "subcompact" model sold in large numbers until it emerged the petrol tank had a tendency to explode in rear-end collisions. One and a half million were recalled and there were scores of lawsuits.

Iacocca said the chairman could not stomach the prospect of succession passing to Iacocca rather than his son, Edsel.

In July 1978, when the company had recorded two years of record profits, Iacocca was fired. When he challenged the chairman, Ford said: "Well, sometimes you just don't like somebody."

Revenge was gained through the revival of Chrysler and Iacocca took it on an acquisitions spree - he bought Lamborghini and a stake in Maserati. Apparently resentful, he had been forced to sell Chrysler's corporate jet in 1980, he bought the Gulfstream company that made it and American Motors, which makes Jeeps.

Some felt these deals, coupled with the distractions of celebrity - he now mixed with the likes of Frank Sinatra - had taken Iacocca away from ensuring Chrysler kept ahead. Market share began to fall. By the late 1980s, Iacocca was selling acquisitions and laying off staff and had to rescue the company again.

When he finally stepped down in 1993, Chrysler was in better shape. But two years later - having publicly criticised his successor - he emerged from retirement to join a hostile takeover bid for the firm, to which he committed $50m (€44m) of his own. The bid failed.

Iacocca was always hugely in demand as a public speaker. Bob Hope, once upstaged by him, said he would never follow him on stage again.

Iacocca was married in 1956 to Mary McCleary, a plumber's daughter, and they had two daughters. She died in 1983. In 1986, he married Peggy Johnson, a former flight attendant 26 years his junior, but the marriage was brief. He married a third time in 1992, but divorce from Darrien Earle, the owner of a Mexican restaurant, soon followed.

Sunday Independent

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