Lee Iacocca in favor of keeping Detroit 3 CEOs
If there's anyone out there who's qualified to opine on what it takes to turn around a struggling automaker, it's Lee Iacocca. Those old enough to remember life in the late '70s can recall Iacocca's first stint at the head of Chrysler, way before the automaker was ever purchased by Daimler and its subsequent sale to Cerberus. The situation in which the beleaguered automakers currently find themselves bears a striking similarity to that of Chrysler's in 1979, except that Chrysler was the only one of the Big 3 that needed Federal help back then and the total loan offered to Chrysler was just $1.5 billion.
Today Lee Iacocaa has finally offered his take on what should happen to Detroit's current execs. "Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit automakers. You don't change coaches in the middle of a game, especially when things are so volatile." He adds, "They're by far the best shot we have for success."
To many, Iacocca is the man most responsible for righting the ship at Chrysler back in the early '80s, creating the venerable K-car and fast-tracking the first minivan, so his opinions should carry a bit more weight than others. But is he right?
[Source: AP via Google]
Reader Comments (Page 1 of 3)
bravenrace 3:06PM (12/09/2008)
Is he right? I believe he is.
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Peter 3:12PM (12/09/2008)
Provided the CEOs change what they've been doing and actually make progress, I think they could stay. They must however show that they have learned from their mistakes and know how to do things differently.
Dean 3:55PM (12/09/2008)
Iacoca brought Chrysler back from the dead. THEN because of his iconic status, he was able to make every car a K-car deriviative, often with bizarre barouque styling cues that were horrendous. Remember the 5th Ave? It was Iacoca who put opera windows and carriage lights on Fords in the 70s.
People stopped buying Chryslers in the late 80s because they were so out of touch. They moved to Ford's stylish and modern Taurus. It was him and his lack of taste, as well as using the profits to by non-auto companies, that brought the company down to the point where they needed to be bought by Daimler-Benz.
He's a crafty businessman and an eternal blowhard. Not a Car Czar.
Frank 4:27PM (12/09/2008)
People stopped buying Chryslers in the late 80s because they were not redoing thier product but instead investing their profits into aquisitions, some good (AMC/Jeep) and some not so good (Gulfstream, Lamborghini). That was his second biggest mistake.
You have the wrong decade in mind. Chrysler was not down in the 90's. They were the most profitable automaker in the world with well reviewed vehicles and increasing market share.
His biggest mistake was hiring Bob Eaton from GM Europe to succeed him as CEO. It was he sold the company out to Dumbler-Benz, but not because Chrysler was in any kind of trouble.
Jim 4:28PM (12/09/2008)
Dean:
"People stopped buying Chryslers in the late 80s because they were so out of touch. They moved to Ford's stylish and modern Taurus. It was him and his lack of taste, as well as using the profits to by non-auto companies, that brought the company down to the point where they needed to be bought by Daimler-Benz."
Er, you need to read up on your history a little better. It was under Iacocca that the Neon, LH, "Cloud cars," and BR Ram were kicked off, and all of them were successses. Bob Eaton's reckless cost cutting (on these and other programs) led to looming warranty pain, which is one reason he hopped into bed with Daimler.
Polly Prissy Pants 4:40PM (12/09/2008)
I don't know, I imagine anyone who truly appreciates a good car could be a fine CEO for any of these companies. You could probably even find some better who would work for free. That's actually been a large part of the problem - no one in charge really appreciates a good, honest, well engineered car.
Dave 4:43PM (12/09/2008)
"Provided the CEOs change what they've been doing and actually make progress, I think they could stay. They must however show that they have learned from their mistakes and know how to do things differently."
GM and Ford are making the best cars theyve ever made. And they keep getting better.
And they have negotiated the best UAW contract in years.
GM's problems stem primarily from legacy costs resulting from previous management, not from current management.
bravenrace 5:45PM (12/09/2008)
Dean - I said I thought he was right about not firing the auto execs. I have no idea what your reply had to do with that, or the article itself.
dave 3:11PM (12/09/2008)
Now Lee would make the perfect "car czar" for the Fed Govt. Hes been there before.
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The Luigiian 3:15PM (12/09/2008)
Seconding. We need Iacocca to be Car Czar, he would kick ass.
Sandeep 3:11PM (12/09/2008)
I think he's right, but they should definitely be suspending bonuses on management and executives. Even if it only buys a few extra months of the lights on, it's worth it.
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Dan 3:21PM (12/09/2008)
Hmm.....And if you were fired then, might Chrysler be thriving in the global marketplace now. The 80's bailout just prolonged the automakers problems, and this is what we will see again in 20 years unless the govt takes a regulatory role in the bailout.
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BLS 3:43PM (12/09/2008)
I disagree entirely. The more regulatory role the government takes the sooner they will be back for more. For example:
If the government mandates that they must have average fuel economy of 40 MPG by 2012 (even allowing for E85 and other conversions) and gas prices fall to $1.00/gal (seems plausible) and assuming car sales resume. People may not want to buy 40 MPG cars, especially at premium prices. Sports cars, SUVs, and trucks may be the markets choice. But if the automakers can't follow the markets preferences (or have a diverse portfolio of products) due to regulations they will not be profitable and will need to return to Washington with their pockets turned out again.
On the other hand, if the governement institutes a $2.00 per gallon tax on gas. People will choose to buy fuel efficient cars. This will push the automakers to make more fuel efficient cars and lead to inovations.
The first choice is more palatable. Make the big bad corporations do "the right thing". However, that approach is doomed to failure.
Rick 4:05PM (12/09/2008)
From where I'm watching the events of the last 3-4 months unfold, it's the lack of regulation and watchdog vigilance that got us into the mess we're in. There's a reason every town and city has a police force. Someone, somewhere is always looking to break the rules in pursuit of gain at the expense and harm of others. Industry should not be exempt from being policed. Maybe this short list will jar your memory:
Arthur Anderson
Enron
WorldCom
ImClone
Adelphia
Tyco
Halliburton
And of course, all the latest players to the game these last few months. Merry Christmas.
Jim 4:33PM (12/09/2008)
"Hmm.....And if you were fired then, might Chrysler be thriving in the global marketplace now."
Bull. One of the conditions of the '79 loan guarantees was that Chrysler had to sell off Chrysler Europe (the source of the "global" Horizon/Omni.) Whether Iacocca stayed or went, they wouldn't have had a global presence.
Hell, that was one of the goals of the Daimler takeover, and we see how utterly incompetent Stuttgart was at that...
dukeisduke 3:31PM (12/09/2008)
"Free K-Cars for everyone!"
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Rob 3:38PM (12/09/2008)
Listen, I agree with no bonuses etc for these CEO's, however i don't think they should be fired, having run many business over the last 25 years, it is extremely difficult to make the right decisions when you don't have access to the capital you need to run your business. Really this affects small business more than the larger ones EXCEPT at this point in time, GM & Chrysler are unable to get the financing they need to continue on working through these tough economic times to turn things around. These guys know the mistakes they have made, as we all do after we have made them, but when you are short on cash and trying to survive sometimes we make decisions on what will bring you cash in the short term, but will cost you in the long run. These 3 North American car companies have done a lot for us, I say this as I am a Canandian, they provided huge economic benefits to us in Canada & the United States, this is why we have grown as countries and been able to have such high standards of living. Listen, let's all be bigger than the "what have you done for me lately" statement. Yes they have made many mistakes, but so have all of us, we need to support them, along with some good oversight to help them through this!
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MC-in-LA 3:42PM (12/09/2008)
As Lee says, changing a coach mid-game is a bad idea. However, that's not where the Big 3 are - they are now playing a NEW game. This game needs to be played globally, not just aimed at (historically) SUV hungry Americans. Innovation needs to rule the nest, not bean counters. There needs to be calculated risks taken, not conservative R&D/designs/etc going forward.
Can the current executives do it? That's the $64k question, and one that recent history may tell us that there are more doubts than there are positive examples.
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happy_penguin 3:42PM (12/09/2008)
Lee is the man and no matter how I feel about Wagoner if Lee says let him stay, I say let him stay. I certainly trust his opinion above that of Chris Dudd doodoo head poopy face.
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Diffrunt 3:47PM (12/09/2008)
poor , or lack of good ,Gov,t regulation is to blame for a great deal of the world,s problems.
I propose a symposium of auto manufacturers exposed to the teachings of the W. Edward Deming institute, who offered their services years ago & were sent packing to the far east where he showed Toyota the road to # one !
He is a god in Japan , w/larger than life statues
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