Lee Iacocca: He Engineered One of History's Greatest Business Comebacks
American auto executive Lee Iacocca became a world-renowned business icon for steering the Chrysler Corporation away from bankruptcy toward record profits in the 1980s.
“I chose the automobile industry because honestly I just love cars. And, if you have to work for 50 years, it’s a lot more enjoyable doing something you love,” Iacocca said.
“Thank you, Ford. Thank you, Chrysler, for providing the opportunity so I could live my passion.”
Lido Anthony "Lee" Iacocca was born October 15, 1924, in Allentown, Pennsylvania, the son of Italian immigrants. Iacocca grew up in comfortable surroundings learning the nuts and bolts of business from his father who worked as a cobbler, hot dog restaurant owner, and a theater owner. His father was a businessman who taught his son about the responsibilities of money and the need for a strong drive and a great vision in order to build a thriving business. The father also ran one of the first car rental agencies in the country and passed on his love of the automobile to his son.
Lee suffered a serious bout of rheumatic fever as a child, and as a result, he was found medically unfit for military service in World War II. During the war, he attended Lehigh University as an undergraduate. He then received a master's degree in engineering from Princeton University.
"I was raised to give back. I was born to immigrant parents and was fortunate to become successful at an early age."
It’s a passion that goes back to his childhood. As his sister, Delma Kelechava recalls, there was only one place her brother ever wanted to work.
“All his life, he wanted to go with Ford,” she says. “Even as a little kid, he’d drive you crazy with those cars and he read everything on the old Mr. Ford, the founder. That’s all he ever talked about was Henry Ford. That’s where he wanted to go, and that’s where he went.”
After earning a scholarship to get his master’s in mechanical engineering from Princeton, Iacocca began his career with Ford in 1946. He completed the 18-month training course in nine months and went to work as a salesman in the Ford district sales office in Chester, Pa.
His success there caught the eye of Robert McNamara, the General Manager of the company’s Ford division. Promotions followed in quick succession until McNamara was named President of the company in November 1960, and Iacocca was named to take his place as general manager. (McNamara went on to become Secretary of Defense under Presidents Kennedy and Johnson.)
Under Iacocca’s leadership, Ford began making and marketing cars to young people, broadening its appeal. He also pushed the company into automobile racing to boost its reputation. His efforts culminated with his championing of the Mustang—often over the objections of Ford’s top executives.
The first Mustang rolled off the assembly line in 1964, and it was so hot, it landed Iacocca on the covers of Time and Newsweek magazines the week it was launched.
In its story headlined “Ford’s Young One,” Time Magazine wrote: “At 39, after 17 years in the auto business, this tall, rugged son of Italian immigrant parents is the hottest young man in Detroit and probably the most ingenious automotive merchandising expert since General Motors’ hard-selling Harlow Curtice.”
Two years later, the one-millionth Mustang was built.
Iacocca’s meteoric rise continued and, in 1970, he was named President of the company. It was, he often said, “a dream come true.” Although the company continued to enjoy great success, Iacocca increasingly clashed with Henry Ford II, the grandson of the company’s founder Iacocca had admired so much as a boy.
It all came to a head in 1978, when Ford fired Iacocca—coming off a year when the company posted almost $2 billion in profits. The news stunned the business world, but within four months, Iacocca was hired to run rival Chrysler, which was on the verge of bankruptcy. Drastic measures including layoffs, plant closings, and selling off the ailing company’s European division weren’t enough to turn things around.
So in 1980, Iacocca went to Capitol Hill to secure $1.5 billion in loan guarantees to be used to rebuild the company. Iacocca cut his own salary to $1 a year, restructured Chrysler, and launched two of the most innovative and successful automobile lines of the decade: the K-car, a compact car that offered higher gas mileage during the depths of the energy crisis, and two years later, the first Chrysler minivans—the Dodge Caravan and Plymouth Voyager.
Iacocca also starred in a series of TV commercials for Chrysler that made him one of the most recognizable figures in the country. In the commercial that cemented his status, Iacocca pointed directly at the camera and uttered his famous catchphrase: “If you can find a better car—buy it!”
Lee Iacocca promised anyone who test-drove a Chrysler $50 if they ended up buying a similar car from a competitor.
Sales boomed and, in 1983, Iacocca paid back the government loans—with interest and seven years early.
He was on top of the world. The miraculous turnaround fueled talk that Iacocca would run for president. He didn’t, choosing to sign another three-year contract with Chrysler at the time instead of entering the political arena.
Iacocca's success in turning Chrysler around made him a national celebrity. President Ronald Reagan asked him to help coordinate fundraising efforts for the restoration of Ellis Island and the Statue of Liberty. Two books are written by Iacocca, his 1984 autobiography Iacocca and Talking Straight (1988), became best-sellers.
Iacocca retired from Chrysler in 1992. He was then able to devote more time to the Iacocca Family Foundation, a charity that supports diabetes research (Iacocca's first wife, Mary, suffered from diabetes and died from complications related to the disease).
"Philanthropy is now a big part of my life, with the Iacocca Foundation funding cutting-edge research to find a cure for diabetes."
Iacocca also worked with Kirk Kerkorian on an attempted hostile takeover of Chrysler in the mid-1990s. Despite the thwarted takeover attempt, Iacocca resumed his role as a Chrysler pitchman in 2005, appearing in ads with Jason Alexander and Snoop Dogg. Iacocca's compensation for the commercials was sent to his foundation. He remains a booster for the U.S. car industry, though his frustration with both public and private leadership was the subject of his third book, Where Have All the Leaders Gone? (2007).
After losing his first wife in 1983, Iacocca married Peggy Johnson from 1986 to 1987. He had another short-lived marriage to Darrien Earle from 1991 to 1994. In his later years, he enjoys spending time with his two daughters, Kathryn and Lia, from his first marriage and his grandchildren.
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