A Spunky Tycoon Turned Superstar
TIME – April 1, 1985
A Spunky Tycoon Turned Superstar
Straight-talking Lee Iacocca becomes America’s hottest new folk hero
In his book and in his conversation, he goes hardly a page or a half-minute without mentioning “guys”–specific guys or guys in the abstract, guys who build automobiles (“car guys”) or sell automobiles or buy them. He is a big guy (6 ft. 1 in., 194 lbs.), a driven guy, an earthy, passionate, volatile, funny and profane guy, a talkative guy who tells it like it is, who grabs for gusto, who damns the torpedoes and plunges full speed ahead. He is a high- strung, stand-up guy, the consummate can-do guy, a guy who enjoys spending time in the company of other guys: duck hunting in Canada, drinking Scotch with Frank Sinatra at Manhattan’s “21″ Club, hanging around the Yankee dugout during spring training.
Lee Iacocca is also an increasingly rich and celebrated guy. Over this past winter, his popularity has assumed extraordinary proportions. His memoir, Iacocca, has stayed at the top of best-seller lists for almost five months, moving out of bookstores for a while at a rate of 15,000 copies a day. “The book’s popularity reaches across all social strata, in all regions of the country,” says Bernard Rath, president of the American Booksellers Association. Indeed, its publisher says that Iacocca has just become the best- selling nonfiction hardcover in history: more than 1.5 million copies are in print.* Hundreds of new devotees write to Iacocca each week, more than 25,000 during the past five months, often beseeching him to run for President of the U.S. In Washington, House Speaker Tip O’Neill says that Iacocca, with Senator Gary Hart and New York Governor Mario Cuomo, is among the most plausible contenders for the 1988 Democratic nomination. During January and February alone, Iacocca was asked by 1,270 different groups to give speeches. Out on the street in any city, strangers approach to stare, to chat, to touch, as if he were a star or something.
Obviously, he is a star or something. After saving and then rebuilding Chrysler Corp. against all odds, Lido Anthony Iacocca, 60, is now achieving another, more ephemeral sort of American miracle: he has become an industrial folk hero in a supposedly postindustrial age and, more improbably still, a corporate capitalist with populist appeal, an eminence terrible admired by working class and ruling class alike. Not since William Randolph Hearst has there been a tycoon who has occupied the national imagination as vividly as Iacocca.
Much of the rest of the world is at least very, very curious. In Japan, 200,000 copies of Iacocca have been sold in one month. It is first on the London Daily Mail’s best-seller list, a bootleg edition is available in Bangkok, and the book is considered a must-read among the Saudi technocratic elite. Says Michigan Governor James Blanchard of his state’s favorite son: “Iacocca is the most revered businessman in the world.”
Inside Chrysler, not surprisingly, the Iacocca legend has held sway for some time. He is adored by the 3,984 dealers, high-torque salespeople more temperamentally akin to Iacocca than many of his executive-suite colleagues. “Dealer meetings are particularly difficult,” says Chrysler Public Affairs Vice President James Tolley. “We have to have security people to keep the dealers off him.” Among Chrysler blue-collar employees, the admiration often seems more like a kind of fealty than mere employee loyalty. “I owe it all to Iacocca,” says Sarah Haynes, a Chrysler assembly-line worker now back at work after a five-year layoff. “If the workers are saying he’s great, it ain’t no jive.” One morning last November, 2,000 employees gathered at Chrysler’s Sterling Heights, Mich., assembly plant for the ceremonial roll-out of Chrysler’s new sports sedans. The workers chatted. They smoked cigarettes and fidgeted. Then, when their boss strode out, they got excited. A chant rose up: “Lee! Lee! Lee! Lee!”
Where his friend Iacocca is concerned, former United Auto Workers President Douglas Fraser is no longer surprised by such heretical outbursts of labor affection for management. “I get asked by people all the time to have Lee autograph copies of his book,” says Fraser, whom Iacocca put on Chrysler’s board five years ago. “Even at Solidarity House.” Solidarity House is U.A.W. headquarters.
But beyond Detroit, beyond Michigan and the auto industry, the breadth of popularity is truly remarkable. “He went out and did exactly what he said he was going to do,” says Gordon North of Rochester, Minn. “He’s probably the most honest man in America.” Even the left-leaning Nation magazine permits kind thoughts for this particular captain of industry. “Iacocca is one of those rare adults who is capable of changing his mind,” wrote Economist Robert Lekachman. Above all, Lekachman declared, “the juices of humanity course through his veins.”
Why are people saying that a fleshy, overbearing auto executive should be President of the U.S.? What accounts for the rampant Iacoccamania? There are many reasons, if no pat explanation. He is powerful, a VIP, yet his bullish candor reminds people of a pal at the local tavern who calls ‘em as he sees ‘em. He is feisty and anti-Establishment, but his patriotism makes that posture seem safe and red-blooded. Partly, his popularity is a function of the times: two-fisted capitalism is in vogue. After a long period of feeling cranky and skeptical, the country seems in the mood to have a hero or two. Moreover, his life embodies just the kind of happy ending that Americans like to celebrate: he had reverses, he fought back, he came out on top.
“He’s real,” says Attorney Joseph Califano, formerly a member of the Carter Administration Cabinet and now of Chrysler’s board. “And he cares–I think that comes through. He takes on fights he doesn’t have to. He’s like the hero of Raiders of the Lost Ark: he’s been down, on the edge, picked himself up, came to the top again.” And, like Raiders, Iacocca’s nip-and-tuck struggle to save Chrysler was something of a pop spectacle: the stakes were so high, and the auto company’s decline and fall so conspicuous, that from 1979 to 1982 the cliff-hanger drama of corporate survival unfolded in the press almost like a weekly serial. First the huge losses and painful layoffs, then full-court- press lobbying to win the federal loan guarantees that permitted the company to hang on. Still more layoffs, shutting plants, more billions of dollars lost.
Throughout the crisis, this big, not quite familiar guy named Iacocca was attracting bursts of public notice, standing his ground before congressional committees and giving snappy, sometimes scathing, answers at press conferences. He seemed sincere. More important, he seemed absolutely resolute and tough. During the dithery decline of the Carter Administration, Iacocca’s own steadfastness and true grit were especially appealing to Americans. Malaise? Did somebody say malaise? “He tapped into America’s frustrations,” says Ron DeLuca, the Kenyon & Eckhardt advertising agency executive in charge of Chrysler’s ads. “He said, ‘It doesn’t have to be this way. You can create your own destiny.’ ” Says Leo Arthur Kelmenson, president of Kenyon & Eckhardt: “The country was starved for leadership and charisma. Lee talked directly to the American people.”
He did indeed. Chrysler launched an expansive media campaign. From the beginning, Iacocca was the pitchman. Soon, however, he and his eye-to-eye pugnacity became the message as well, and the chairman became a celebrity. “We wanted his personality to cut through,” says DeLuca. “In the copy, we tried to reflect the cadence of his thought.” The first wave of TV commercials was broadcast in the winter of 1980. Iacocca came across as up- front, reasonable. “I don’t want you to buy a car on faith,” he told viewers, “I want you to compare.” Then came the quintessential Iacocca tag line, the slightly belligerent ad that turned the promise of automotive quality into a dare. “If you can find a better car,” he barked, “buy it.”
The ads conveyed a credible, hard-headed corporate self-confidence. . Eventually they sold K-cars. But the subtext–extolling the virtues of workmanship, assertiveness and pride–sold Iacocca to the public too. Explains Kelmenson: “Iacocca isn’t hustling cars. He’s selling trust.”
Iacocca’s tough-guy face and intense, you-gotta-believe-me manner are not supposed to work well on the cool medium. Perhaps Americans permitted him to confound the rules because he seemed like almost no one else in the limelight: he is, after all, the apotheosis of the regular guy. To a viewing public ordinarily soothed and stroked by carefully inoffensive spokesmen, Iacocca’s bluntness was electrifying. In addition, of course, there has been the sheer quantity of exposure over the past five years. In all, Iacocca’s 30-second spots have reached 97% of American households an average of 63 times apiece. But even that sustained barrage of television visibility was only a prerequisite for Iacocca’s popularity, not its ultimate cause: he had to touch nerves. “We didn’t invent Lee Iacocca,” says Kelmenson. “We couldn’t have. We just communicated the Lee Iacocca persona to the American public.”
Nor was it merely a matter of his potent personality. For unlike most video- generated celebrities, Iacocca was not famous simply for being famous: he had done something. By 1983, everyone could see that Iacocca had, in fact, carried out his immense logistical mission. He had managed to whip a sprawling company into shape, and saved American autoworkers’ jobs by the tens of thousands. Congress had fussed. The White House had postured. Out in the Rust Belt, Iacocca proved he could make things work. His feat was by no means single-handed: the Government’s $1.5 billion guarantee of Chrysler loans was essential. Still, it was like the underdog pool player in a high-stakes game who announces an impossible bank shot involving awkward, oblique angles and chancy ricochets, and then does it. All over the country, people were impressed. Gil MacDougald of Atlanta thinks Iacocca is great, and has a plausible sociological explanation to boot. “In America,” says MacDougald, a window washer, “people pull for underdogs and they just love a winner. Iacocca was both.”
Indeed, if Americans like the rather subdued Iacocca they have seen for 30 seconds at a crack on TV for the past five years, they love the full-bodied Iacocca they experience in person. Of the more than 3,000 speaking engagements he was offered last year, he accepted only 46. He devotes enormous energy to + each performance. At the 1983 University of Michigan graduation exercises, the audience was not hot for him at first: the seniors were naturally rather self- absorbed, and a commencement speech, after all, is just a commencement speech. But no, Iacocca is not dour or hortatory. When he finished with the graduates 45 minutes later, some 14,000 people were on their feet, cheering and stomping. At last year’s Al Smith Memorial Dinner in New York, the annual gathering of the city’s political Establishment, Bob Hope unwisely chose to perform after Iacocca. Iacocca was, as usual, a tough act to follow. Hope has said quite seriously that he will never again let the chairman of Chrysler Corp. precede him onto the podium.
Iacocca claims that before he took Dale Carnegie courses at age 25, he was a terrible speechmaker. Nowadays in public, and often in private, he seems more a crackling stand-up monologuist than a sober corporate spokesman, a sort of Rodney Dangerfield who gets all the respect in the world, or George C. Scott’s Patton turned happy and unthreatening. “I gotta tell ya,” Iacocca told a wined-and-dined gathering of stock-market analysts in Detroit earlier this month, “with our $2.4 billion in profits last year, they gave me a great big bonus. Really, it’s almost obscene.” (The bonus, to be made public soon, was about $500,000.) Asked at a press conference a few days earlier why he lays so much blame on Toyotas and Nissans for the U.S.-Japan trade deficit, he snapped back with his own questions: “Whadya want me to talk about? Tomato puree? Rutabagas?”
A slight Daffy Duck lisp comes and goes, and provides an affecting touch of vulnerability. He works the audience, improvising. On some occasions he will begin slowly, reading straight from a prepared typescript. But then, eager to give his measured words emphasis, he starts his right hand stirring the air in tight counterclockwise loops. And before long, like one of his new turbocharged cars, he revs up and zooms off, quoting himself, zigzagging between ’60s idiom (“flip out,” “bummer”) and mild profanity, tossing away irreverent asides like empty beer cans. Hyperbole comes naturally, and repeatedly: to the analysts in Detroit, he said Chrysler’s admittedly successful mini-van is “the hottest new product . . . in your lifetimes.” Says Douglas Fraser: “I’m a hip shooter. I’ll admit it. But Lee, Lee is a hip shooter deluxe.”
So, Lee, uh, what about economic policy? “Where’s Dave Stockman?” he shoots back, expecting no answer, then providing plenty of his own. “Every time he tells the truth he gets in trouble. He gives them the hard facts. ‘Shoot the messenger!’ they’re yelling. Don Regan, why talk about him? He’s not my favorite, but that’s beside the point. He sold the President the idea that the deficit has nothing to do with interest rates. So I’ve stricken him off. I don’t listen to him or I’m liable to get mixed up on Economics 101, O.K.? So who’s in charge of economic policy? Who are these people?”
Iacocca talks nonstop, like the salesman he is. If not for the humor and the regular flashes of common sense, his declamations would be rants. When Iacocca gets going, which is usual, he pauses only when he runs out of breath. He is in such a rush to say so many things that he cannot always be bothered to find the mot juste: if guys is his trademark noun, helluva is Iacocca’s favorite modifier.
That he gets carried away is part of his appeal, yet his razzmatazz does not charm or convince all listeners. Harvard Sociologist David Riesman finds Iacocca’s “showmanship” distasteful. “Somewhere between the excessive caution of most businessmen and the excessive bravado of Iacocca,” Riesman says, “there is a position of responsible corporate leadership.” A recent article in the New Republic suggests that Iacocca’s mythic managerial skills may be seriously overrated. The Wall Street Journal, Iacocca’s longtime antagonist, recently called him the “Motor City’s most famous motor mouth.” On the subject of trade conflicts with the Japanese, he does in fact speak somewhat promiscuously. Says an ex-colleague from Ford, where Iacocca worked for 32 years: “He doesn’t know when to shut up.”
If he had shut up, he might not have produced his astounding best seller. More than the TV spots or the personal appearances, it is the galloping success of Iacocca that has made him seem something more than just another colorful mogul. Since publication last November, his book has sold more copies than Chrysler has sold cars. “From the first day,” says Missie Koche, manager of a Waldenbooks in an Atlanta mall, “it’s been a best seller. Everyone seems to like it, not just the business types. There must be something about it that makes it magic.” Similarly, at the Harvard Book Store and Cafe in Boston’s ultra-yuppified Back Bay, Manager Michael Bills says that “at first, it seemed mostly executive types were buying it. Then it caught on, and you could feel its popularity in the air.”
^ Bantam Books, after giving Iacocca a comparatively modest $150,000 advance, “is surprised at the success,” says Bantam President Louis Wolfe. “We didn’t expect this.” After a scheduled first printing of 150,000, low best- seller range, the author raised a ruckus. “I broke my butt for this?” he asked Wolfe.
Iacocca reads like Iacocca talks, more or less. The book was actually stitched together by Writer William Novak (for a flat fee of $45,000) after some 20 tape-recorded sessions with his subject. Most of the syntactical switchbacks and impulsive rhetorical questions have been edited out. Most notably, his abundant profanity was reduced to a tangy minimum, although at least one “f—” stayed in. But the voice is unmistakable. In print, as in person, Iacocca works hard to please: he has produced several different books in one, alternately sentimental and nasty, inspirational and hard-boiled, by turns a conventional autobiography, a gossippy cuss-and-tell expose, an executive primer, a knowing account of Chrysler’s renaissance and a sketchy excursion into public policy prescription. Sort of Citizen Lee: What They Don’t Teach the Street-Smart One-Minute Salesperson About the Search for Excellence at Harvard Business School.
Indeed, the Harvard Business School, M.B.A.s and “bean counters” are used almost interchangeably as synonyms for button-down corporate caution. Iacocca, born and raised in Allentown, Pa., regards the risk taking of his Italian-born father as the way to do business. In the 1920s and ’30s, Nicola Iacocca made and lost and remade rather glamorous small fortunes: hot dogs, movie theaters, rental cars. Young Lido, a monkish boy denied military service in World War II (4-F because of a childhood case of rheumatic fever), took an engineering degree from Lehigh University (B+) and then spent a year at Princeton (M.A.). “I wasn’t interested in a snob degree,” he says in Iacocca, despite the Ivy League diploma. “I was after the bucks.”
In the fall of 1946, soon after the Red Arrow train brought him to Detroit, he realized that sales, not engineering, was his truest calling. Very well, they said to the upstart, you can sell: trucks, in Chester, Pa. Undaunted, he sold and sold and sold. During the next nine years, he hustled up the regional sales ranks. Finally, weeks after his marriage in 1956, Iacocca got called back to headquarters as a marketing manager under the chief “whiz kid,” Ford Vice President Robert McNamara. Iacocca officially indulged his ^ love of the punchy phrase. Earlier that year he had devised a $56-a-month credit plan for Ford buyers (“$56 for ’56″); later he was intent on the Mustang’s exceeding the Falcon’s all-time one-year auto sales record of 417,000 (“417 by 4/17″); still later, he introduced his “shuck the losers” plan to winnow out unprofitable departments. In 1960, Iacocca took over as head of the Ford car division.
In April 1964, Ford introduced the Mustang. It is difficult to overstate the attendant hoopla. The car and its principal corporate patron, Lee Iacocca, appeared on the cover of both TIME and Newsweek. Iacocca, TIME declared, “is the hottest young man in Detroit,” brilliant, an “ingenious automotive merchandising expert.” Twenty-one years later, a metal sculpture of a Mustang hangs over Iacocca’s desk at Chrysler, and a 1964 Mustang convertible, a gift from his wife in 1981, sits in his garage in suburban Detroit. “I’m generally seen as the father of the Mustang,” he says in his book’s 17-page chapter devoted to the car, “although, as with any success, there were plenty of people willing to take the credit.” Ford’s design director at the time, Gene Bordinat, has been galled ever since by Iacocca’s putative paternity. “The model was totally completed by the time Lee saw it,” says Bordinat, now retired. “We conceived the car, and he pimped it after it was born.”
But Iacocca’s salesmanship–his hucksterism, even–accounted for much of his personal success in the mid-’60s, when carmakers were discovering the youth market. For snazziness and corporate profligacy, Detroit has not equaled itself since. The introduction of a sporty new sedan, orchestrated by Iacocca, typified the wonderful wantonness. In 1966 he sailed dozens of Lincoln-Mercury dealers to the Virgin Islands, where after a meal on a beach at sunset, an amphibious landing craft thrashed ashore. Out onto the sand popped a brand-new white Cougar driven by Singer Vic Damone, who proceeded to croon.
Iacocca became Ford’s president in 1970. Eight years later, Chairman Henry Ford II demoted and exiled him. “He’ll always be mad at Henry Ford,” says Kathi Iacocca, 25, one of his two daughters. “He will take it to his grave. People who don’t understand his anger don’t know my father.” Says a former Iacocca colleague: “He believes in reprisals for his enemies.” In the book, Henry Ford is depicted as venal and mean, an almost unbelievably unappealing character. Iacocca asserts that his former boss was paranoid, vulgar, personally extravagant at company expense, cruel and sexist. Many former and current auto executives, including Iacocca’s friends, think he was wrong to carry the vendetta so acidly into print.
Even the author, now that he has disgorged all the animus, entertains second thoughts. “Maybe I shouldn’t have written a couple of those things,” Iacocca concedes. Yet another time, he could not contain his old angers as he defended his view that people are divided into two camps–”nice guys” and jerks (his own term is far earthier). “I know, I know,” he said to the suggestion that life is not that simple. “But if a guy is over 25% jerk, he’s in trouble. And Henry was 95%.” Finally, many Ford executives bristle at Iacocca’s implication in the book that it was he who made the company hum. Indeed, they claim he left Ford in disarray, strategically aimless. Then there are his professions of humility. Says a Ford executive: “He suffers delusions of modesty.”
Iacocca earns an estimated $3 on every copy of his book that Bantam sells. That comes out to about $4 million so far. But he also earned $1 million in salary and bonus last year, and is probably worth about $20 million besides. His publishing income he is giving away. The money will endow the Lee Iacocca Foundation, a philanthropy run by Daughter Kathi. Part will be passed on to the Joslin Diabetes Center in Boston. His wife Mary, who died in 1983, was diabetic.
Iacocca’s other principal civic work is his chairmanship of the Statue of Liberty-Ellis Island Centennial Commission. The renovation of the statue will be finished in 1986. The more ambitious Ellis Island project, which is to include a new museum of immigration, will take until at least 1987 to finish. “Everybody’s getting into the act,” he gushes. “How about this–we even got $2,000 from the Hell’s Angels!” Commission Architect John Burgee says that when the two of them take inspection tours of the enormous Ellis Island entry hall, Iacocca, the immigrants’ son, chokes up.
For meetings of the commission or of Chrysler’s board, Iacocca comes to New York about three times a month. He stays in the company’s three-room suite at the Waldorf Towers. In Boca Raton, Fla., he owns a condominium (with five bathrooms) overlooking the Atlantic. But much of his time he spends at home in Bloomfield Hills, a sylvan suburb northwest of Detroit.
In Bloomfield Hills one night recently, the main course was pasta in a tomato-and-duck sauce. The cook, Peggy Johnson, is Iacocca’s fiancee; they became engaged in December. “Lido,” explained Johnson, 34, “shot the ducks in Canada last fall.” Across the table, he smiled. “Yeah, she called me up today to ask a little advice on the meal.” Her comeback is quick, Iacocca- style. “I called you up to find out what the hell to do with these birds.” The couple met in 1982 in the offices of the Statue of Liberty Commission where Johnson, a flight attendant on leave from Pan Am, worked as a volunteer. “He is a very caring person,” she says of her husband-to-be, who is 26 years older than she. “He gets hurt very easily.”
Iacocca’s life is not loaded with leisure. At Sinatra’s house in Palm Springs he did see A Passage to India (“Too long”), and he is reading two books by fellow best-selling Italian Americans–Mario Puzo’s The Sicilian and Leo Buscaglia’s Loving Each Other. But in addition to doing the New York Times crossword puzzle, his main hobby seems to be hypochondria. After learning of an acquaintance’s death not long ago, he shook his head and said gravely, “I’ve got to start guarding my health.” In fact his health is under pretty tight security already. Among other medicinal regimens, he doses himself every night with Metamucil, a fiber laxative. He is a confessed fiber zealot. “I’ve probably saved 500 lives by spreading the gospel,” he says. For Lent he has given up smoking his daily two or three Monte Cristo Havanas. At home on weekends, he crews a rowing machine for half-hour stretches. Every weekday at 11:15 a.m., he begins 45 minutes of sweating in the gym he had built on the fifth floor of the K.T. Keller Building at Chrysler headquarters.
Down the hall, he puts in 9 1/2-hour days running the company. “Some guys in this business slow down, retire and take it easy,” he says. “A couple of months later, they’re dead.” Not Iacocca. He has spent almost 39 years in America’s pivotal industry, and he still glories in the hurly-burly of his factory floors, in the sheer quantities of capital ($2.8 billion) and steel (1.3 million tons) and humans (110,000 employees) that he must commit to producing 2 million vehicles a year. Iacocca likes it best when he can make managing a car company seem like a martial task, urgent and vast and possibly heroic.
From the Keller Building to the design dome is only a quarter-mile, but a general rides, as Iacocca did one recent afternoon in the back of a black Chrysler Fifth Avenue. At the styling dome, six subordinates awaited him, two clutching clipboards and pencils. Iacocca had come to decide how he wants several new cars to look. One seductive prototype parked in the dome will be manufactured beginning in 1988 as a co-production of Chrysler and Maserati, the Italian high-performance carmaker. Iacocca stands in one place, arms folded, studying the maroon convertible as it rotates slowly on a turntable. “I like the chrome,” he announces. An aide scribbles a note. Chrysler’s Maserati makes a half-turn. “I want better-looking wheel covers than this,” the boss tells them. Clipboards rise. The hubcaps go. Iacocca has been at Chrysler for six years and five months. The first half of his time there was infamously miserable. There are some noteworthy errors from that dark era. “Selling our realty company was a goddam mistake–excuse me, a big mistake,” he says. The second half of his Chrysler reign, on the other hand, has been rollicking. The minivan is a hit. Bigger cars, with higher profit margins, are selling well. “Americans are falling in love with big cars again,” Iacocca explains, “and with gas at a dollar a gallon, what the hell, why not?” Chrysler profits last year, $2.4 billion, were higher than those of the previous 60 years put together. (Ford’s were $2.9 billion last year, GM’s $4.5 billion.) Of the laid-off workers, 41,000 have been rehired. Iacocca last month had the company give a $500 bonus to all 100,000 employees. The morning he announced that Valentine’s Day gift, Peggy Johnson remembers, “he was like a kid at Christmas. He couldn’t wait.”
It almost seems like Detroit’s go-go days again. And some of the resonances from the old times seem ironic. “In many ways,” reckons a member of the Ford family, “Iacocca and Henry Ford are alike.” Iacocca, for instance, can be an unreasonably terrifying boss. Says one chewed-out executive: “He’s vitriolic and explosive.” Ford had Iacocca do his dirty work; former Chrysler executives say that Iacocca has relied on Gerald Greenwald, his vice chairman and suave heir apparent, to deliver the bad news. Iacocca’s definition of management by consensus is revealing. “Consensus,” he says, “is when we have a discussion. They tell me what they think. Then I decide.”
For most of his life, Iacocca says frankly, his politics have been a function of his class. “When we were poor,” he writes in the book, “we were Democrats. But when times were good, we were Republicans.” As recently as the 1970s he called himself a Republican, and two years ago he was approached about the job of Transportation Secretary by the Reagan Administration. “I’d happily serve a President on either side to run economic policy,” he says. “I would like to be the economic guy.”
But Chrysler’s bad times have firmly shoved him over toward the Democratic Party, and the prickly free-enterprise purity of the Reagan Administration has kept him there. He is a Democrat, isn’t he? “Yeah, I guess I am,” Iacocca told TIME, “when you put it that way–straight Democrat versus Republican. The Democrats today are more pragmatic, not so ideological.”
Iacocca has become an advocate of Government intervention in the marketplace. “I’m not very popular with the people around the White House anymore. I told them (on trade policy), ‘Let’s make sure we don’t get hosed.’ They don’t like that. This Administration sees you either as a protectionist or a free-trader, with no shades in between. And we’re going to lose, as a country, for it.” Given the protectionism and market intervention practiced by Japan and other foreign governments, Iacocca would have Washington intervene in the market too, setting up import tariffs and quotas to keep manufacturing jobs in the U.S. In his view, the U.S. “is being played for suckers” by sticking to principles of free trade while other industrial nations subsidize their exports and limit imports. The U.S. trade gap, $123 billion in 1984 and growing, is to Iacocca the most urgent danger facing the country. “I don’t care what the cause of it is, I know the end result. I don’t give a shit whether it’s the strong dollar or what it is. At $123 billion we become a debtor nation of the worst order.” More and more U.S. manufacturers, he fears, will build their factories abroad unless, for example, they are forced by domestic-content legislation to keep production Stateside. “And once they’re invested,” he says, “you can’t pull them back. In the (capital) investment world, once you’ve done it, you’ve done it! A guy buys a Toyota, you can get him back three years from now. But you can’t bring an auto plant back home. As the months or years go on, we are deindustrializing the country.”
But tough talk does not necessarily make good economic policy. The Administration and some Democrats argue that protectionist barriers cost more to maintain than they are worth. By the estimate of the U.S. International Trade Commission, the voluntary import restraints on Japanese autos that were recently lifted cost U.S. consumers $89,250 a year in higher car prices for each U.S. autoworker’s job saved. Furthermore, free-traders argue, a protectionist cocoon would discourage manufacturers from reaching for greater operating efficiencies.
The Administration’s tax-simplification plan angers Iacocca: he shouts about the provision that would abolish the tax preferences enjoyed by industry–like automobiles. “I don’t see any broke-ass McDonald’s out there. I don’t see anybody (in services) shutting down jobs so fast you’re throwing them on the dole.”
Most notable, perhaps, is Iacocca’s enthusiasm for “industrial policy.” The idea, essentially, is for Government to engage in active economic planning: a thoroughgoing, centrally coordinated set of federal policies intended to encourage certain industries. Such planning, he writes in Iacocca, “doesn’t have to mean socialism.” No, but critics do not share his bouncy faith in the ability of Government to fine-tune market forces. It may be that the U.S. economy is too big and complex for such meticulous economic tinkering. Curiously, he cites the past half-century of tangled agricultural- subsidy policies as a model for a future industrial policy.
What about the Pentagon, Lee? “I don’t get into defense because I’m in over my head. I’ve never studied that.” Come on. “I’m just talking about waste. So how about me giving you the strong defense you want? And leave it up to me what’s ‘strong,’ at 20 cents less on the dollar by getting efficient. People would shout, ‘Oh, shit, be my guest!’ I would take the slop out of the military-industrial complex. And I happen to know it exists. I mean, it’s cost-plus, and there’s no competition. What the hell, there has to be slop.”
It is just that sort of high-frequency rap that excites Iacocca’s admirers. At a weekend-long gathering of House Democrats in West Virginia earlier this month, it was a similar talk on trade that caused a small ruckus. Iacocca’s speech included a challenge to the Japanese Prime Minister concerning the U.S.-Japan trade imbalance, which rose to $37 billion last year. “Look, Mr. Nakasone,” Iacocca said, “that’s just too big a rip-off, even for a friend. I’m giving you (a goal) for your team: $10 billion out next year. Tell me how you get there . . . Your call. You’ve got 30 days. Sayonara.” California Democrat Robert Matsui, a Japanese American unaccustomed to Iacocca’s happy- – go-lucky tendency toward the shrill, called the remarks “racist.”
It took days for Iacocca to get over his hurt and bewilderment over the “sayonara” brouhaha. Clearly, he still has an uncertain feel for the hair-trigger proprieties of national politics. In the past his Japan bashing had never provoked such alarm. “Jesus, it was a closed meeting! These single- issue guys–I mean, what the hell’s going on? How’d you like to do that for a living every day? I don’t understand it.” Joseph Califano, who has worked for the past three Democratic Presidents, does understand it. Says Califano: “The only guys who get shots as far out as that one are guys who are perceived as candidates.”
George Romney, the last and only auto executive to make a serious run for the presidency, had no groundswell pushing him along in 1968. How would Iacocca run in 1988? Most pros believe that Iacocca could be politically popular. Like Eisenhower, his worldly achievement is impressive; his Trumanesque candor is bracing; and like Hubert Humphrey or Ronald Reagan, he brims with joie de vivre. Indeed, says Califano, “Reagan and Lee are similar. Both say flat out what they think. There aren’t any hidden agendas.” Wendell Larsen, a former executive under Iacocca at Chrysler, elaborates on the Reagan analogy. “Some of the things Lee has tapped into are the same as Reagan,” he suggests. “The nation has been looking for a leader who is sure of himself, who calls a spade a spade–even if it isn’t. He oversimplifies issues, and people like that. But Reagan is shallow. Lee is not. He’s a hell of a lot smarter than Ronald Reagan and a hell of a lot deeper.” Iacocca has already proved himself on television. Even he alludes to it, jokingly, as a political asset. “Cronkite and I were sitting around the house trying to figure out how much of a phony Reagan is. He said, ‘Why don’t the two of us be running mates? We both know television.’ I said, ‘Sure–what spot do you want?’ “
Of course, a no-holds-barred guy, notwithstanding his appeal as a celebrated citizen, would quickly get into trouble as a candidate, suddenly judged by more fastidious standards. Iacocca is occasionally intemperate and does not always read his audiences correctly. In Washington, at a recent dinner in his honor, he rose in response to a toast. The assembled Georgetown elite probably expected a brief, understated thank-you. Instead they got fun-loving, full-of- himself, jabbery Iacocca for much too long. He does not take criticism well; a campaign entails incessant criticism. And he frets about physical danger. Some years back, when he bumped his head getting into a car, he thought he had been shot. Two years ago, when he was to appear with Reagan at a Chrysler factory in St. Louis, a White House limousine met Iacocca at the airport. Arriving at the plant, he discovered the door could not be opened from the inside, and it shook him a bit. “What if the car caught on fire?” he asked the Secret Service agent who let him out. For days afterward, he talked about that scary sealed presidential limo.
Moreover, Iacocca likes getting his way in the world quickly and unambiguously. He is a bossy boss. Heads of corporations can fold whole departments, hire anybody they choose and, in Iacocca’s phrase, shuck the losers. Presidents, on the other hand, are hemmed in, constrained by the Executive bureaucracy, checked and balanced by Congress. In the give and take of governing, Iacocca’s virtues–frankness, boldness–might not serve him so well. “He’s a man who wants his hands on all the levers,” says White House Aide Craig Fuller, the Administration official friendliest with Iacocca. Could a President Iacocca quietly compromise with opponents? Says Fraser: “His frustration level is too low.”
Indeed, most of his comrades do not expect him to pursue a candidacy. “No way,” says New York Businessman William Fugazy, an old friend. “I’ll bet my life on it.” Califano seems somewhat more hopeful. “He says privately what he says in public–that he doesn’t want it. But once he made the commitment,” he says, “Lee would be phenomenal as a candidate. He knows how to lead. He knows how to communicate.” A few who know Iacocca say they think that he could be nudged into it.
Iacocca relishes all the public talk and letters from strangers, even as he forswears–most of the time–any interest in being President. “I’ve thought about it,” he said one recent sunny day in New York. “Sometimes I say, ‘Maybe I should give it a shot. It’s only four years. It’d be fun, an honor.’ People tell me I should run, and I wonder if I should listen.” Then he brought himself up short. “A woman wrote me a letter and says, ‘You’d probably get killed in office, but you owe it to the country.’ I’d probably get killed? What the hell do you mean, I ‘owe it to the country’? It would destroy me. I couldn’t survive. I would shoot myself first. I don’t want to be President. I’m not going to run. I couldn’t take four years of (ABC White House Correspondent) Sam Donaldson. I just don’t have the desire. I don’t want to climb another mountain.” Maybe not. But when Lia Iacocca, 20, is asked for a single word to describe her father, she does not first suggest “easygoing” or “content.” Her word: “ambitious.”
For now, however, the ambition seems satisfied by the continuing frenzy of his work, by the attention his policy pronouncements are getting and by the downright amazing adoration he encounters all over the country. Lee Iacocca did not set out to become the object of a personality cult, but hey, what the hell? It is fun for him to be able to turn down a $300,000 TV commercial for Pepsi. “I took a powder,” he explains. It pleases him to decline movie producers’ serious offers to buy the rights to Iacocca. “The hell with the half-million advance,” he says. At a safe distance, he even likes the loving mobs. On a damp evening last week in Rochester, he showed up to speak at a Xerox-sponsored lecture series that has drawn crowds of a few hundred. More than 3,000 came out to see Iacocca. After the crackerjack 45-minute lecture, they gave him a standing ovation. Later that night, stretched out on the plane back to Detroit, he was still impressed by all those fans who had paid to hear him speak. “Five and eight dollars a head,” he mused. “And they didn’t even get a drink.”
FOOTNOTE: *There are, of course, hundreds of millions of copies of various versions of the Holy Bible in print. In addition, many dictionaries and cookbooks have sold millions.
— Reported by Paul A. Witteman/Detroi