Iconic Iacocca

I’d first come across the name Lee Iacocca when I’d watched the recent film in the theatre: Ford v. Ferrari. Though he wasn’t highlighted as the protagonist in the movie, as it was about Carroll Shelby and Ken Miles, the audience was aware as to who he was. Another place I’d encountered the name Iacocca was in Dr. Carol Dweck’s Mindset (stay tuned for the upcoming summary on this excellent must-read book!), where she talked about him under the subsection labelled ‘CEO disease.’ She grouped him in the ‘fixed mindset’ category, similar to that of John McEnroe and a few others.

However, reading about Iacocca has made me realise that there are more than a few number of people who put him on the pedestal and thought very highly of him. It seemed that the general public had encouraged him to become the President of the United States at one point in time! In this article, let’s look at what Iacocca highlighted in his autobiography. Apart from the success story of Chrysler and Iacocca himself, in this book, he has also expressed his views on management styles, on what’s wrong with the American way of doing business, and how America can become stronger in world markets.

Introduction
In Part 1 of the book, Lido Anthony Iacocca talks about his Italian immigrant family and his experiences at school. Since he couldn’t join the army for World War II due to rheumatic fever as a child, he attended Lehigh University, where he completed his studies in 8 straight semesters. He then received a fellowship for graduate study at Princeton University, after which he joined Ford, where he worked as a novice salesman initially. He then rose through the ranks to become the head of the Ford Division in 1960, when he and his team developed the Mustang, one of the most popular cars of all time.

The Ford Story and its Aftermath
In Part 2, Iacocca narrates his triumph of the Mustang and his climb to power in the company. After becoming President of Ford, Henry Ford II, fearing that Iacocca would be after the CEO job next, fired Iacocca from the company on October 15, 1978, his 54th birthday. When Lee left Ford, he got a job in a warehouse, where he only stayed for few hours. In fact, these couple of hours forced him not to give up at any cost, and throw all the negative thoughts aside, picking up only the positive ones and moving ahead. It was the humiliation of being at an ordinary office right after serving as the president of a great company for so many years that he decided to fight back and reach at the top at Chrysler Motor Corporation. Quoting Lee verbatim,
“There are times in every one’s life when something constructive is born out of adversity. There are times when things seem so bad that you have got to grab your fate by the shoulders and shake it. I am convinced it was that morning at the warehouse that pushed me to take on the presidency of Chrysler only couple of weeks later”.

The Chrysler Story
In Part 3 of the book, Iacocca narrates how he saved Chrysler from bankruptcy. At first, Iacocca was made the president and later, he became the chairman CEO of Chrysler on January 1st, 1980. Unfortunately, the day he joined his office, the organization declared losses of about $160 million. The company was in serious trouble. It not only suffered from gross mismanagement, but also was on the brink of collapse due to the energy crisis and the economic recession that occurred at that time. Amidst several internal problems enlisted below, Chrysler also suffered from external issues such as the Iran Revolution and more (see Notes). He also tried approaching the government to ask for help, but to no avail. Even Volkswagen declined a merger request. Towards the end, Iacocca decided to sell Chrysler’s tank division to General Dynamics to keep the company from going bust. He also began a total reorganization of the company and laid off several employees. After pleading to the government for a while, the outgoing Chairman John Ricardo finally gave Iacocca a $1.2 billion loan guarantee. The stipulations included increasing fuel efficiency of Chrysler’s vehicles and restructuring the company to become profitable. Chrysler began to flourish from July 1983, once the loan was fully paid back.

The Final Part
The final portion of the book, titled “Straight Talk”, talks about making America great again. It was a bittersweet victory after Chrysler started producing a line of fantastic cars from K-Car, Le Baron, and Chrysler E Class to Dodge 600, Dodge Daytona, and Chrysler Laser. Iacocca modernized the Chrysler plants based on the latest technology, converted a fleet of cars to front wheel drive technology, became the leaders in fuel economy, and promised to maintain employment of its half a million workers.

Notes:

Global Motors:
Iacocca wanted to form a consortium of car companies which he would name as Global Motors, based in Europe, Japan and the US, in order to break GM’s monopoly. This project couldn’t take off due to American Antitrust Laws.

Problems at Chrysler:
Lack of discipline, functionality, cohesion, and inter-department interaction. There was also no management structure, no teamwork, bad morale, deteriorating factories, and security leaks.

Effects of extra-organizational stressors on Chrysler’s business:
1979 Iranian revolution resulting in the ousting of the Shah of Iran
Doubling of gas prices
Chrysler’s market share plunging to a mere 8%
Rumours of Chrysler’s demise

9 C’s of Leadership by Iacocca