Biography

[b]Background and Birth [/b][br /]
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Twelve-year-old Nicola Iacocca landed in America in 1902 with no money, no acquaintance, no roof over his head and absolutely no idea where to go and whom to turn to in time of difficulty. He worked in a coal mine to survive in an alien land. But he soon quit his job and moved to Allentown. By 1921 he had saved enough money to bring his widowed mother from San Marco, Italy, to live with him. On his visit to homeland, he married Antoinette, daughter of a shoemaker and brought her to America with him.[br /]
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The Italian immigrants, now more or less settled on American soil, had a baby boy Lido Anthony Iacocca, known to the world as Lee Iacocca, on October 25, 1924, in Allentown, Pennsylvania, the USA.[br /]
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When Lido was born, his father had opened a hotdog restaurant named the Orpheum Wiener House. He also started America’s first ever rental car business called U-Drive-It. Lido and his sister Delma had a happy childhood and were brought up with a lot of love and strong sense of family values. They were always taught the quintessential aspect of Italian culture - family bondage. Also, Lido inherited sense of work ethics from his father. His father had taught him the dignity of labor, which he carried with him throughout his life.[br /]
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Lido was never afraid of work. As a young boy of 10, he would take his wagon to the grocery store and wait outside. As the shoppers came out, he would offer to pull their groceries for them in return for a tip. By the time he was 16, he worked almost 16 hours a day at a fruit market.[br /]
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The Iacocca family did well in the 1920s. Then the Great Depression happened. They had almost lost their house. However, Lee attributes their survival during these difficult times to his mother. She was a resourceful woman. She managed to put food on the table every night. She even started helping her husband at the restaurant. Antoinette Iacocca even worked for a silk mill, sewing shirts.[br /]
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To Lido, his father was a man full of vigor and boundless energy. Nicola Iacocca, in his later years suffered from leukemia. Lee took his parents to Italy in 1971. His father thoroughly enjoyed the experience of visiting his homeland again. By this time Nicola was in the last stage of leukemia. He had regular blood transfusions and had lost a lot of weight. At one point of time, they had lost track of him and were afraid that he had collapsed and lost consciousness. However, Nicola was a strong man. He died in 1973, still trying to enjoy life as much as he could. Nicola Iacocca did not let the disease get to him. Right till the very end he was brave and was determined to live.[br /]
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[b]School Days[/b][br /]
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In the early decades of the 20th century, immigrants had to put up with discrimination in different walks of life. As a school going child, Lido had to put up with a lot of abuses from other children. His ethnic problems continued throughout his school life where the kids continued to mock him and make fun of his Italian roots.[br /]
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In school he had two Jewish friends that were treated even worse than he was. It did not matter that the three boys were toppers in the class. It just mattered that they were different. This made an impression on Lido that he would never forget. He would later name Gerald Greenwald, as the Vice President of Chrysler, who would be recognized as the first Jew to enter the top ranks of any of the three auto-makers.[br /]
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However, despite these problems, Lido was a diligent student. He was the pet of many of his teachers. Each year, he graduated top rank in class, with straight A’s in Math. When he was 15, he suffered from rheumatic fever. It was a fatal disease in those days. He lost about 40 pounds and was bedridden for six months. He had to give up his regular baseball games. However, lying flat on his back made him turn to chess, bridge and poker. Moreover, he also developed liking for books.[br /]
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[b]College Education[/b][br /]
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Lido developed an interest in engineering and applied to various colleges. He applied for a scholarship at the Purdue University, one of the best institutes in the country, but was rejected. Finally, he chose to pursue engineering at the Leigh University, mainly because it was closer to home.[br /]
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The departments of metallurgy and chemical engineering at the Leigh University were among the best in the world. However, sophomore year for any student was supposed to be a stressing one. Any freshman who did not maintain a high average at the end of his sophomore year was politely asked to leave. Lido’s ability to concentrate on what he was doing, his dedication and effective time management got him through college.[br /]
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Lido completed his studies at Leigh in eight straight semesters, which meant no summer vacations. He participated in a lot of extra-curricular activities. He got involved in the school paper The Brown and White. His first assignment was to do an interview of a professor who had rigged up a car that ran on charcoal. The story was well received and the Associated Press picked it up and ran it in hundreds of papers.[br /]
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Lido also tried to enlist in the army to fight in World War II, but since he had suffered from rheumatic fever as a child, he could not do so. So he put his heart and soul into studying and graduated with flying colors.[br /]
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By the end of his senior year, engineers were in great demand and Lido had his pick of job. But it was cars that interested him. He had a keen desire to work for Ford Motor Company and so he fixed up an appointment to meet Leander Hamilton at McCormick-Goodheart, the company recruiter. Ford’s recruitment policy during that time was to visit 50 universities and select one student from each. Lido Iacocca was selected from Leigh, and he was on cloud nine.[br /]
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However, this was not to be. Lido Iacocca won the Wallace Memorial Fellowship at Princeton, a grant that covered tuition, books and even personal expenses during his masters’ years. He called Leander Hamilton and explained his dilemma. The recruiter assured him that they would hold a place for him at Ford, once he completed his master’s degree at Princeton.[br /]
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However, by the time Lido completed his thesis at Princeton, Leander Hamilton had left and nobody else knew about the assurance that he had given Lido. So he met, Bob Dunham, who was Goodheart’s boss and explained his predicament. He managed to assure Dunham that it was unfair on their part, and landed himself a job at Ford. At this time, he changed his name to Lee, to make it sound easier for his friends and associates to recognize and remember.[br /]
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[b]Mary Iacocca[/b][br /]
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Lee Iacocca fell in love with Mary McCleary, a receptionist in the Ford assembly plant at Chester. They soon got married and lived a fulfilled married life. They had two daughters, Kathi and Lia.[br /]
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Lee was an out and out family man. He loved taking vacations with Mary and the children. No matter whatever work he was doing, he managed to devote the weekends to his family.[br /]
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Mary was a victim of diabetes, a condition that had led to several other complications. She had also had three miscarriages. The entire family learnt to cope with this condition. Mary was a brave woman. On many occasions she had told her husband that there were people who were worse off than her.[br /]
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Mary was a disciplined woman. She had to take two insulin injections daily. She even controlled her diet well. Their daughters also learned to live with the disease and were well aware of the dangers involved. In their household, fear always loomed over that Mary could go into a diabetic coma any day.[br /]
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Being a diabetic, Mary had cared very deeply for diabetic research. She was a volunteer for other diabetics. She had accepted her condition with great courage and she believed in educating people about diabetes. Lee and Mary had set up the Mary Iacocca Fellowship at the Joslin Diabetes Center in Boston.[br /]
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[b]Days at Ford[/b][br /]
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Lee started working at Ford as a student engineer. It was a great learning experience for him. It was the best place in the world to learn how cars were made. He could finally see the practical application of the things that he had learnt in college.[br /]
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He even spent four weeks on the assembly line. His job was to attach a cap to a wiringharness on the inside of a truck frame. It wasn’t hard work but it was tedious. The supervisors were pretty decent, but the student engineers were treated with suspicion. Many of the workers were convinced that they were spies who had been sent to keep an eye on them.[br /]
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Working at Ford, Lee soon realized that engineering no longer interested him. He wanted to stay at Ford, but in marketing or sales. He liked working with people rather than with the machines. Following his dream he landed himself a job in the Ford sales office in Chester, Pennsylvania. He was hired for a low-level desk job in sales. Lee soon discovered that salesmanship was in his blood. He would make his sales pitch to the dealers more dramatically, having the undivided attention of his audience.[br /]
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According to Lee, there was one word that described a good manager - Decisiveness. A person had to continuously keep thinking. This was exactly what he did in 1956. His district was the last in sales. He decided to introduce a new program called 56 for 56. This program made it possible to purchase a new 1956 Ford for 20 per cent down payment and $56 installment a month for three years. This program was a huge success. His district went from last place in sales to first place. Due to this program, extra 75,000,000 cars were sold.[br /]
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With his skills, he worked his way to the top and soon became the zonal manager in Wilkes-Barre, Pennsylvania. It was during these years that he learnt the tricks of the trade. He was also promoted as the National Truck Marketing Manager for Ford the same year. Within a year he was the head of car marketing and in 1960, he took over both the functions.[br /]
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On November 10, 1960 he was promoted to the post of a Vice President and General Manager of the Ford division. Robert McNamara, who was offered the post of the President, turned it down to take up a post in the Kennedy cabinet. Lee Iacocca was odds-on favorite to become the next president of the Ford Motor Company. But it did not happen till 1970. In 1968, General Motors Vice President Semon Knudsen resigned, as he was not offered the Presidency at GM.[br /]
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This was too good an opportunity for Henry Ford II to miss. He offered Knudsen the Presidency at Ford, thus throwing Lee out of the race. Lee was told that he was too young to become a President. But Knudsen could not achieve the desired results. Henry Ford II soon fired him. Despite this, he did not offer the Presidency to Lee. Instead, he set up a three-man office of the President, Lee being in charge of the company’s North American Operations.[br /]
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[b]Presidency at Ford[/b][br /]
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It had taken a long time to happen. Lee was ecstatic. Lee became the President of Ford on December 10, 1970. He realized quickly that his job, as a President was far different than that of a manager. He now had to cut costs and increase profits instead of designing, marketing and selling.[br /]
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As soon as he became the President, he called a meeting of the top officials at Ford to establish a cost cutting program. The goal was to cut down expenses by $50 million in the four areas - timing foul-ups, product complexity, design costs and outmoded ways of doing business.[br /]
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Lee also initiated a program called “Shuck the Losers”. This program gave the managers three years to make their departments profitable or sell them off. He was also involved in several other projects at Ford. Two of these projects were partnering with Honda to produce cars, and the development of the mini van. However, Henry Ford II rejected both these projects.[br /]
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As the President of Ford, he enjoyed the power and prestige of his position, which had come to him when he was just in his mid 40s. All the top executives of Ford lived a good life in Royal court. White-coated waiters were on call throughout the day and all of them ate lunch together at the executive dining room. [br /]

The Ford Aftermath[br /]
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After becoming the President, Lee began to see Henry Ford II on a daily basis, as their offices were very close. The more he came to know Henry Ford II as a person the more concerned he became about the company’s future and his as well.[br /]
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To Lee, Henry Ford II was an autocrat, who, when felt threatened by someone, would go to extreme lengths to get rid of him. He had power but he did not know how to deal with it. The arbitrary use of power was not merely a character flaw. Henry believed in it. He had once asked Lee to fire an employee, just because his pants were too tight. Henry’s management philosophy was that if a guy worked for a person, the employer should not let him get too comfortable and do the opposite of what he expected.[br /]
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Henry used to spend the company money for his own personal uses. He had used the corporate jet on numerous occasions for his own use and the Ford stockholders had to bear the burden of the luxurious life that Henry led. Henry was a bigot and it was only a matter of time till he slandered the Italians.[br /]
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In 1975, relations between Henry and Lee had deteriorated to a considerable extent. Henry used Lee’s shoulder to achieve personal targets. If he wanted anyone to be fired, he would ask Lee to do the job. He had also made certain decisions, which Lee did not agree to. Soon, Lee Iacocca was added to Henry Ford II’s hate-list. Henry could not stand that Lee Iacocca was far more popular than he was and had friends all over the company. Owing to this popularity, he could not fire Lee directly. People looked up to Lee, and they considered Henry nothing more than a figurehead and that Lee had to rescue Henry Ford II in many situations.[br /]
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Henry cleverly started to isolate Lee, in his attempt to throw him out. He first started firing Lee’s friends and supports in the company. Among the people to get the axe were Bill Winn and Hal Sperlich.[br /]
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Bill was with the advertising company who worked for Ford’s promotions and did excellent work. He was also Lee’s closest friend. Hal, who was a product planner, had Lee depend upon him for various decisions in product planning. Henry soon fired Hal Sperlich and Lee had to undertake the job of firing his most valuable employee. Hal joined Chrysler Corporation and he played a major role in the Chrysler revival.[br /]
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In 1977, Henry brought in the top consulting firm of McKinsey & Company to reorganize the top administration at Ford. After their recommendations, a three-member office was set up which consisted of the Chief Executive Officer and Chairman, Vice Chairman and the President.[br /]
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Henry was of course the CEO and Chairman. Phil Caldwell was the Vice Chairman and Lee continued as the President. However, this was a demotion for Lee because in the absence of the CEO it was the Vice Chairman who took the decisions. Making Caldwell number two, brought Lee’s fight with Henry out in the open. Soon the three-member team of the top management had an addition of William Clay Ford, Henry’s brother. Lee was now pushed down to number four. This further added to his humiliation and the agony that he was suffering.[br /]
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Henry was purposely out to humiliate Lee so that he quit himself. When he failed to break him, he decided to finally take the matter in his own hands. In July 1978, Lee was called and fired, thus ending a 32-year association with Ford. William Ford was a mute witness to all this.[br /]
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The firing got a lot of attention in the outside world. The New York Times, in a front-page story called the firing “One of the most dramatic shakeups in the history of the Ford Motor Company.” The Washington Post had cited “ It raises questions about how much an enterprise as large as Ford Motor is run like a private duchy by the whim of one man.”[br /]
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Another blow came to Lee when Mary suffered her first heart attack in 1978, after Lee got fired from Ford. She had been ailing for some time, but the trauma of that event had made the condition even worse. In 1980, she had another coronary and in the spring of 1982 she again had another stroke. In spring 1983, she got very sick. Mary Iacocca died on May 15, at the age of 57. Lee suffered a great loss by her death. To him, she was a tower of strength who had supported him at every step. She was an optimist who believed that Lee’s subsequent firing from Ford must have been for a good reason.[br /]
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[b]Aboard The Sinking Ship of Chrysler [/b][br /]
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As soon as Lee Iacocca became available to the market, he got many job offers from various fields. Cars were in his blood. He had a meeting with the chairman of the board at Chrysler Corporation. Lee was briefed about the current situation at Chrysler.[br /]
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The Chrysler Corporation was founded by Walter Chrysler in 1925 and reorganized and newly incorporated in 1986. It has long been the third largest auto maker in the United States after General Motors and the Ford Motor Company. The company was in a bad state when Lee Iacocca came aboard. It was bleeding. On his first day at Chrysler, Lee discovered that the entire place was in a state of disorder and lacked discipline. Chrysler did not function like a company at all. It seemed to be working in vacuum. The system of communication had collapsed. Neither did it have a systematic organizational structure; nor there were meetings to get people talk to each other. Everyone worked independently, and there was no coordination between the departments.[br /]
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Chrysler had a respectable past. Their engineers in Michigan had designed the most sophisticated tank. Their engineers in Alabama had designed the world’s first electronic ignition for cars. Chrysler was instrumental in designing the world’s first hydraulic brakes and the first under-the-hood computer.[br /]
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Looking at the past history, Lee was convinced that it had a great future. The company already had a solid dealer organization as well as engineers second to none. The only things that it did not have were the resources needed to build good products. However, Lee was confident of his own abilities. He knew the car business and knew that he was good at it. He honestly believed that the place would be humming within the next few years.[br /]
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[b]The Renaissance[/b][br /]
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Being the true businessman that he was, Lee realized that three things were needed for a turnaround at Chrysler : people, product and profits. Lee soon went about looking for a dream team, which would help him in the turnaround of Chrysler. He needed people who had talent and experience. Lee needed these people to advise him on how to bring the desired turnaround. Gerald Greenwald was one of the best financial talents and Lee brought him aboard. Hal Sperlich was already at Chrysler when Lee arrived. His help was also invaluable to him.[br /]
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Lee Iacocca strengthened his team by hiring retired Ford executives. Gar Laux was one such person who knew the auto industry and the market well. He knew how to handle the disgruntled dealer. But Lee’s problems were far from over. In 1979, the prices of gas increased resulting in a decrease in the car sales. Soon the market share for small cars increased, as they were economical and the market share for larger cars dried up. This was not good news for a company who was looking for survival and trying to save itself from bankruptcy.[br /]
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They started cutting costs wherever they could. Even the annual reports were printed on a plain paper instead of on the glossy ones. Several blue collared and white collared workers were laid off which saved the company millions of dollars. Lee, being a compassionate human being was greatly pained by these mass layoffs.[br /]
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Lee, in another attempt to save Chrysler, tried to set up a partnership with Volkswagen, but Volkswagen, realizing how deep in debt Chrysler was, did not go ahead with the deal.[br /]
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The next logical step was to borrow money to save Chrysler from drowning. Lee Iacocca along with the chairman went to the Government for help. They had extreme difficulty in convincing the officials about their situation. Finally Chrysler applied for loan guarantees. Everybody, especially the business community opposed the prospect of Government backed loans.[br /]
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Finally Chrysler was issued a loan guarantee of $1.5 billion over the next two years. The government took all of Chrysler’s assets as collateral. Now, all Chrysler needed was a miracle to bounce back. Chrysler had to raise another $2 billion on its own. Lee began to find new sources of credit by trimming operations and closing plants and persuading labor unions to accept layoffs and wage cuts. He then shifted the company’s emphasis to fuel-efficient models and undertook aggressive advertising campaigns that included personal appearances on television commercials. His personal image helped build up the company image as he was seen praising ‘The New Chrysler’. The general public of America admired Iacocca’s integrity and believed that it was because of him that the image of American automobiles as a whole has gained momentum into the global market.[br /]
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The miracle that would drag Chrysler out of the dumps was developing in the shape of the K-Car, Chrysler’s new model in the small car segment. This car was put up against the Japanese competition, which prided them as being the masters of small cars.[br /]
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At Chrysler, K-Car was the last train at the station. If it failed, Chrysler would be a history. The K-Car got off to a poor start. It was launched in 1980 and did not receive the expected response. By early 1981, sales picked up considerably and K-Car managed to end up with 20 per cent of the small car market. Despite the K-Car the losses at Chrysler were still staggering at $478.5 million.[br /]
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To save a failing battle, Lee even suggested a merger with Ford. The Federal authorities and Chrysler’s bankers saw the idea as preposterous. According to Lee, this merger would benefit two failing companies because by 1980 Ford had also started accumulating massive losses. For Ford, a merger with Chrysler represented a fast and easy way to get back to their position of number two.[br /]
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The chairman at Ford, Philip Caldwell, gave a statement to the press saying that Chrysler had suggested a merger with Ford. By the end of 1982, economy had begun to heat up and the car sales increased. Chrysler showed a modest profit by the end of the year. The company was solidly back on its feet again in 1983.[br /]
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Chrysler launched the mini van, which had been rejected by Henry Ford II years ago. Connoisseur Magazine selected it as one of the most beautiful cars ever designed. Fortune rated it among the 10 most innovative products of the year.[br /]
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[b]Sweet Taste of Success[/b][br /]
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By July 1983, Lee Iacocca was keen on getting the Government off Chrysler’s back. In a ceremony in New York, the bankers were presented with a cheque worth $813,487,500, a day before it was actually due. Chrysler was reborn. To the media, Lee was a God.[br /]
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Iacocca did not forget his social commitments and responsibility all through these years. As soon as Chrysler Corporation was on its feet again, he involved himself into various campaigns in public interest. He was honored with the 4th Annual Drug Prevention Award for his “Think : Don’t Drive and Drink” campaign in 1989. Chrysler Corporation sponsored the campaign.[br /]
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Lee Iacocca retired as the Chief Executive of Chrysler, in 1992. But he is still deeply concerned about the goodwill and profitability of the company. When the company was dwindling in 1995, he took interest in his friend Kirk Kerkorian buying out the venture. However the deal fell through, but Iacocca did not leave his attempts. Even today, when he finds his fruits of hard work, now renamed Daimler Chrysler, in trouble, he openly offers his advise and help to work the magic once again.[br /]
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[b]The Present[/b][br /]
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At the time of his retirement from Chrysler, it was rumored that he would run for US Presidency. His name is still a major catalyst at the Leigh University where he serves as an honorary trustee. Today Iacocca keeps equally busy with his responsibilities as the chairman and CEO of EV Global Motors, the chairman of Iacocca Foundation and the chairman of the Committee for Corporate Support of the Joslin Diabetes Foundation.[br /]
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Since 1988, he has made major commitments of nearly $8 million for the Iacocca Institute, which is dedicated to increase the competitiveness of business and organizations in a global economy.[br /]
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Lee Iacocca has now crossed 75 and he is still in the transportation business. His EV Global Motors a Californian company, manufactures and markets electric bicycles around the world. His name is associated with the Gunther Ebike. [br /]
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Lee Iacocca is confident that there is a market for electric transportation. He does not believe that the electric car will be in every garage soon, but hopes that electric transportation such as his Ebike shows the value of alternative fuel and transportation.[br /]
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He is one of the most sought after speakers even today. He gets more than 8,000 invitations every year to speak at various places, be it a seminar or at a university. He is considered one of the best managers the world has ever produced.[br /]
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Lee Iacocca has followed his goal, of satisfying the same consumer group’s needs as they age. Through his efforts, he has been influential in the American lifestyle. Though his target market is growing up, his goal is still the same to achieve a solution for the changing needs of the consumer. To this end, he has remained active and influential.[br /]
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