Iacocca upbeat about Chrysler, Ford, future of the industry
David Shepardson / Detroit News Washington Bureau
Los Angeles --Lee Iacocca is as blunt as ever.
"The (Obama auto task force) called me for my advice, but they didn't follow it too well," the former Chrysler CEO said of his chat with top federal officials in the spring of 2009.
"Keep your hands off of (the auto companies)," Iacocca said he told task force co-chairman Larry Summers, now President Barack Obama's top economic adviser. "You can't run a business out of Washington, D.C."
The candor was vintage Iacocca, the straight-talking, cigar-wielding celebrity CEO whose 1970s sales pitch for a failing Chrysler ranks among the most memorable of all time: "If you can find a better car, buy it."
At 86, with the perspective of history and an eye toward the future, Iacocca is optimistic about the industry that made him a household name.
"Two years ago, it looked like Detroit and Michigan and the car business was in the toilet," Iacocca said during a recent interview with The Detroit News in his Bel Air home, in the hills west of Los Angeles.
Now, with all three companies on the upswing, he says, "things have turned out pretty well."
Things have turned out pretty well for Iacocca, too.
His gait has slowed a bit, but the visionary designer, executive and pitchman still cracks the trademark smile that sold millions of vehicles for Ford Motor Co. and Chrysler.
As Ginger, his 4-year-old French bulldog, sniffed around the living room, Iacocca's biggest worry was seeing that he was prepared to host his two daughters and eight grandchildren for Thanksgiving.
He still misses Michigan, where he made his mark
"I just love Michigan," said Iacocca, who moved from the state to California in 1993, with his third wife. They divorced a year later.
His life today is a big change for the self-described "patron saint of the bailouts."
As Chrysler president in 1979, he convinced Congress and President Jimmy Carter to rescue the automaker from death with a $1.2 billion infusion.
Iacocca believes post-bankruptcy Chrysler, 30 years later, will survive this latest near-death experience, too.
Perhaps not surprisingly, he praises the government actions over the last two years that gave two of Detroit's Big Three automakers — General Motors as well as Chrysler — another chance.
Still, he doesn't agree with everything that was done. GM and Chrysler were forced to cut too many dealers as part of their restructuring, Iacocca said: "They went too far."
Like many others, Iacocca was hurt by Chrysler's bankruptcy, losing 80 percent of his pension. He joined a class-action lawsuit of 450 white-collar retirees in September, but doesn't think it has much chance.
"There is," he observed, "no fairness in bankruptcy."
Daimler hurt Chrysler
Iacocca lays a great deal of responsibility for Chrysler's failure this time around at the feet of the previous owner, Germany's Daimler AG, which sold most of its stake in 2007 to Cerberus Capital Management and got out completely last year.
"For 10 years, all they did was wreck Chrysler," he said. "Ten years it took them, but they did a pretty good job."
Daimler spokesman Han Tjan responded that Iacocca "wasn't there in those years," and "I don't think he is an objective observer."
Iacocca believes Chrysler is finally on the right track, but he isn't convinced all of its moves with partner Fiat SpA make sense — especially the decision to bring the tiny Fiat 500 to the U.S. market yet this year.
"It's a little car. It fits in Italy. Whether it will fit on the California freeway, I'm not too sure," Iacocca said, pointing to the poor sales of the Smart car as a cautionary tale.
Iacocca knows a bit about imports, having twice tried to bring Alfa-Romeo to the United States.
But he is encouraged by Chrysler's gains.
"Chrysler's got some great new products," Iacocca said. A new Jeep Grand Cherokee — Chrysler's first post-bankruptcy new car — sits in his garage, and Iacocca calls it a "knockout."
Next to it, under a sheet, is the first Dodge Viper that came off the line in 1991.
His old company's new mantra — quality, quality, quality — is spot on, Iacocca said.
"They put out some lousy products," he said of Detroit's automakers. "The quality is better. We shipped a lot of junk in the past at times. Styling sells them but the quality keeps them sold."
Iacocca said he remains convinced that he could have turned around Chrysler if he and billionaire investor Kirk Kerkorian had succeeded in their 1995 bid to acquire Chrysler. The bid failed for a lack of financing.
Iacocca says he still sees Kerkorian.
"I tell him: 'The only time in your lifetime you couldn't raise the money was when you joined with me and Chrysler,'" Iacocca said.
Still a Ford fan
Chrysler was Iacocca's second act in Detroit. Born in Allentown, Pa., the son of Italian immigrants, he joined Ford as an engineering trainee in 1946, climbing up the ranks to become the father of the wildly successful Mustang in the mid-1960s and president of the company in 1970.
Henry Ford II canned him in 1978, the end of a relationship marked by conflict, and Iacocca landed at Chrysler Corp., where he was named CEO the following year.
In his 2007 book "Where Have All of the Leaders Gone?," Iacocca urged automakers to discard losing brands. GM did, last year dropping Saturn, Hummer, Pontiac and Saab. Chrysler had ditched Plymouth in 2001.
But Iacocca has a hard time accepting Ford's decision to kill Mercury at the end of this year. Iacocca was instrumental in developing several Mercury models during his time at Ford.
"I don't think I'd have done it," he said of Mercury. "It's a pretty good brand."
Despite his ouster from Ford, Iacocca still roots for its success and said he believes the Dearborn automaker was smart to avoid taking a government bailout.
"Having gone through bailouts before, if you can keep the government away, you are the winner — and Ford kept them away completely," Iacocca said.
He wanted to buy Ford stock when it fell below $2 a share.
"My advisers told me 'Don't buy it' at $1.30, at its all-time low" in November 2008.
Iacocca did buy in later.
"I bought enough at $5.50," Iacocca said, noting that Ford stock is now trading in the $16 range. "I bought it because (Ford CEO Alan) Mulally has done a hell of a job in a short period of time."
Iacocca has no plans to buy GM shares, but is considering investing in Fiat, which owns 20 percent of Chrysler.
Iacocca has another reason to be bullish on Ford — he is still trying to sell about a half-dozen Iacocca 45th anniversary edition Mustangs that went on sale in the summer of 2009.
The 400-horsepower Iacocca model starts at $90,000, features a custom-built body and interior, and comes with a factory warranty from Ford.
He got his friend Nancy Sinatra to cut him a deal on using her father's "Fly Me to the Moon" song in the ad for the car.
'A great ride'
Looking down the road, Iacocca says the newer automotive technologies — hybrids and electrics — are exciting.
But Detroit automakers were way behind the curve.
"They let Prius for 10 years rule the roost," Iacocca said. "For Detroit to leave (Toyota) with a hybrid for that long is crazy."
Nissan Motor Co. — with its all-electric Leaf — is on the right track, he said, rather than GM and its extended-range, electric-gasoline Chevrolet Volt.
"You are going to have to have a pure electric car," Iacocca said. "There's going to be a scramble for the pure electric car."
That will be a challenge for the next generation of auto executives.
The world's most famous former auto titan is sought after, even in retirement.
Chrysler CEO Sergio Marchionne came to visit Iacocca in Bel Air last year, soon after taking the reins at Chrysler, and honored Iacocca in July at the Walter P. Chrysler Museum.
"Lee Iacocca's Chrysler took help once in the form of government-paid loan guarantees and paid the loans back years early," Marchionne said in July. "I told him that the day we pay the government back, I'll take him to Washington so he can hand over a check for the second time."
But Iacocca has other interests, too. He remains active in philanthropic and charitable endeavors, having raised millions of dollars for diabetes research. His first wife, Mary, died from the disease.
And he recently returned from his home in Tuscany, where his 5 1/2 acres of grapes produce up to 100 cases of wine annually, bottled locally for him under the "Villa Iacocca" name.
He has no plans to work for another auto company, build another custom vehicle or write another book.
"It was a great ride," Iacocca said. "Been there, done that."
From The Detroit News: http://detnews.com/article/20101203/AUTO01/12030389/Iacocca-upbeat-about-Chrysler--Ford--future-of-the-industry#ixzz17BA26F2x