By Alex Taylor III
October 23, 2012

Mr. Turnaround

A quarter-century ago, another successful CEO with Detroit connections was being talked about as presidential material because of his skill in managing corporate turnarounds.

His name was Lee Iacocca. And while the Iacocca-for-president boomlet was short-lived, his careers both as businessman and would-be politician contain some lessons for today’s leaders.

Having just turned 88, Iacocca is living quietly in retirement, though he emerged last week to endorse Mitt Romney for president, saying “the future of our country is at stake.” Few remember the “Iacoccamania” that swept the country in the 1980s. Having saved Chrysler from bankruptcy, starred in its memorable TV commercials, and written a hugely successful autobiography, Iacocca was on the cusp of a presidential bid. In 1985, a poll of potential presidential candidates showed that he trailed Vice President George H.W. Bush by only three percentage points, according to the Encyclopedia of World Biography.

While his political affiliation was a little difficult to pin down (he supported both Democratic and Republican candidates), nobody had any trouble figuring out where Iacocca stood on the issues. His favorite target was the Japanese. He loudly complained about trade restrictions and currency manipulation, and unleashed this characteristic broadside at the Detroit Economic Club: “If they [the Japanese] don’t like our cars, then you’d think they could take some American parts and help shave the auto trade deficit. It’s funny, isn’t it? Those parts are good enough for Mercedes and BMW, but not good enough for Isuzu and Daihatsu?”

Behind the bluster, Iacocca had an uncanny knack for understanding what the American car buyer wants to drive. As an executive at both Ford and Chrysler, he created several new product segments and launched a remarkable number of hit vehicles (along with a couple of misses).

Ford Mustang 1964-

By seeing what a racy body with a long hood and a short rear deck could do for a plain-vanilla Ford Falcon chassis, Iacocca created the Mustang and launched a class of vehicles known as pony cars. The Mustang set a record for first-year sales, and far from being a flash-in-the-pan, has remained in Ford’s car lineup as a core vehicle ever since.

Lincoln Continental Mark III 1968-1971

According to Motor City legend, Iacocca created the Mark III by directing a designer to “take the Thunderbird and put a Rolls-Royce grille on it.” The Mark III embodied all of Iacocca’s styling excesses including a padded vinyl roof, porthole rear side windows, and pseudo-spare tire bulge in the trunk — and it was enormously popular. One writer called it “far-fetched and vulgar, a two-seater sports car stretched to the length of a limousine,” but Iacocca claimed Ford made a profit of $2,000 per car.”

Ford Pinto, 1971-1980

To fend off small cars from Japan, Iacocca ordered up a subcompact that would weigh less than 2,000 pounds and sell for less than $2,000 (about $11,000 today). In the rush to economize, the Pinto’s fuel tank was left vulnerable to rear-end collisions and resulting fires, and Ford was accused of preferring to absorb potential lawsuits for death and injury rather than pay $11 per car to fix the defect. Two million Pintos would find buyers, but Iacocca’s reputation was scorched.

De Tomaso Pantera 1971-1975

Iacocca had a weakness for jet-setter friends, among them the late Alejandro de Tomaso, which led to Ford importing Panteras to be sold through its Lincoln Mercury dealers. The cars were shoddily built with poor crash protection and inadequate rust proofing — so problematic that Elvis Presley reportedly fired a gun at his Pantera after it would not start. Ford ended its Pantera experiment in 1975, but de Tomaso would surface again with Iacocca at Chrysler.

Dodge Aries/Plymouth Reliant 1981-1995

The K-cars were already in development when Iacocca arrived at Chrysler in 1978, but he had to launch them as the automaker was emerging from near-bankruptcy, and he did so with great ceremony by wrapping their arrival in the American flag. Nobody’s idea of refinement, the K-cars nevertheless sold well and provided the underpinning for a dozen or more additional models, many of them named LeBaron.

Chrysler LeBaron convertible 1982-1988

No domestic convertible had been sold in the U.S. since the 1976 Cadillac Eldorado until Iacocca revived the ragtop style with the LeBaron six years later. A faux wood-paneled version of the car became his favorite. The LeBaron was so successful that Chrysler kept making convertibles, introducing topless versions of the Sebring in 1996 and the 200 in 2010.

Dodge Caravan/Plymouth Voyager 1984-

Working with Hal Sperlich, another Ford alumnus, Iacocca revived an old idea for a “maxi-van” by dropping a boxy body on a K-car platform and adding elevated captain’s chairs for the driver and a sliding side door for passengers. In beating the Renault Espace to market, he created the first minivan. Competitors took years to catch up, and despite stiff competition from Honda and Toyota, Chrysler still owns half the market.

Chrysler TC by Maserati 1989-91

Along with his buddy de Tomaso, then running Maserati, Iacocca cooked up the idea of marrying a Maserati body with a Chrysler engine. The aim was to brush Chrysler with an international patina, but the car was repeatedly delayed, subject to quality problems, expensive, and sold poorly. Even the opera windows in the removable hardtop couldn’t disguise its similarity to the much less-expensive LeBaron convertible.

Jeep Grand Cherokee 1992-

Although AMC was getting ready to introduce the ZJ in the late 1980s, Iacocca delayed it until 1992 while he ramped up minivan production. His timing was perfect. Built in Detroit and the first unibody SUV, the Grand Cherokee caught the initial wave of sport-utility popularity and continues to deliver outsize profits to this day.

Second-generation Dodge Ram 1994-2001

Iacocca was around for the redesign of the Dodge Ram with its “big rig truck styling” and distinctive large grille, but he retired in 1992 and thus missed the launch. Instantly recognizable, the new Ram quadrupled in sales within three years and established itself as a legitimate contender in the full-size pickup wars against Ford and Chevy. Although its design has been essentially unchanged for nearly two decades, the Ram, now shorn of its Dodge brand affiliation, was the fifth-best-selling vehicle of any description in September 2012.

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