Biography of Lido A. Iacocca

Connie S. Swinfin


Lido A. Iacocca was born on October 25, 1924.(Lido would change his name to Lee after going to work for Ford. He felt it would be easier for business associates and contacts to recognize and understand.) His parents, Nicola and Antoinette, were Italian immigrants. Nicola came to the United States from San Marco in 1902. He was only 12 years old. He did odd jobs until he saved up enough money to return to Italy in 1921 to bring his widowed mother back to the United States. While he was there he fell in love with Antoinette, a shoemakers daughter, who was 17 years old. They were married a few weeks later, and he brought both his mother and new bride back to his new country

Leeís parents worked hard to provide for their family. Nicola believed in America. He felt in America you had the freedom to become anything you wanted to be if you were willing to work hard for it, and he did just that. He opened a hot dog stand called the Orpheum Wiener House, sold real estate, and started the first rental car business called U-Drive-It. He did all this with only a 4th grade education.

Lee was never afraid of work. When he was 10 years old, he would take his wagon to the grocery store and wait outside. As shoppers came out he would offer to pull their groceries home for them for a tip. When he turned 16, he worked 16 hours a day in a fruit market. Lee attributes his work ethic to the example set by his father.

The depression hit his family just as hard as the rest of the country. Lee feels the depression had a direct impact on his life. It turned him into a materialist. When he graduated from college his only goal was to make $10,000 a year by the time he was 25, and then progress to a millionaire. Lee believes the reason he gets upset about waste, whether itís throwing away food, having to get rid of clothing just because itís gone out of style, or waste in business is a direct result of the depression. He also feels this is why most of his financial investments are very conservative. In the back of his mind he knows disaster could strike without warning.

In grade school Lee came face to face with ethnic intolerance. He was looked down on because he was Italian. He also had two Jewish friends that were treated even worse than he was. It didnít matter that the three boys were top in the class, it just mattered that they were different. This made an impression on Lee that he would never forget.(Later in his career when he was with Chrysler, he wuld name Gerald Greenwald as the Vice President of Chrysler. He would be the first Jew to enter the top ranks of any of the top three automakers.) He realized the importance of recognizing people for their contributions and abilities, not their race or nationality.

When Lee tried to enlist in the army to fight in World War II, he was classified as 4F. This was due the rheumatic fever he had as a child. Instead he went to Lehigh University. After graduating from Lehigh he landed a job with Ford, but put it on hold because he won the Wallace Memorial Fellowship at Princeton. He Graduated from Princeton and started working for Ford in 1946.

Lee married Mary McCleary in 1956. Family was very important to him. He always made time for his family. He kept Friday night, Saturday and Sunday for his family. This was always a priority. He also made it a point to leave his work at the office during this family time.

One of the reasons I feel Lee did so well in business was his ability to adapt quickly in any situation. He had to do a sales presentation in the South, and even though these are the friendliest people anywhere, they tend to be cautious with outsiders. Rather than introduce himself as Lee Iacocca, he stated that his first name was Iacocca, and his family name was Lee. He no longer seemed to be an outsider, but one of the good ole boys.

Lee says there is one word that describes a good manager, and it is DECISIVENESS. You have to think on your feet. This is exactly what he did in 1956. His district was 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 % down and $56.00 a month for 3 years. The program was a huge success. His district went from last place in sales to first place. Due to this program it was estimated that an extra 75,000,000 cars were sold.

Lee says there is one word that describes a good manager, and it is DECISIVENESS. You have to think on your feet. This is exactly what he did in 1956. His district was 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 % down and $56.00 a month for 3 years. The program was a huge success. His district went from last place in sales to first place. Due to this program it was estimated that an extra 75,000,000 cars were sold.

Another project that Lee undertook was the Fairlane Committee. This committee used research data to decide what type of new car to produce. The data included demographics regarding the increase in the number of young adults between 18 and 34, the fact that the 20 to 24 year old age group would increase by 50% during the 60ís, there would be and increase in 2 car families, more women would be buying cars, and Americans would have more money to spend. Based on this data a set of guidelines were developed. The car must be small, but needed to hold 4 passengers. There would be a 2500 LB limit, and the cost could not exceed $2,500.00 with equipment. It must also appeal to several markets at once. The consumer should feel comfortable driving the car to church, the drag strip, or the country club. The final goal was to develop one basic car with a wide range of options so the customer could buy as much economy or luxury as he could afford. The end product was the 1964 Mustang. This project allows us a glimpse of Leeís business management style. He used good marketing research data, he surrounded himself with good people, and he was willing to listen to them. He was also willing to take the risk of introducing a new product. All of this combined to make the Mustang a success. Lee became known as the Father of the Mustang.

After the huge success of the Mustang, Lee was made President of Ford on December 10,1970. He realized quickly that his job as President was far different than that of a manager. He now had to cut costs and increase profits instead of selling, marketing and design. He initiated a program called "Shuck The Losers". This program gave managers 3 years to make their departments profitable or sell them off . He was also involved several other projects while at Ford. Two of these projects were partnering with Honda to produce cars, and the development of a mini-van.(Both of these projects were rejected by Henry Ford II.) He was also instrumental in the development of the Pinto. He used the same approach that was used with the Mustang. The car was to cost less than $2,000.00 and weigh less than 2,000 LB. The car was to be developed for fuel economy and price to compete with foreign cars that were already on the market. Unfortunately this project backfired due to the safety issue of the fuel tank igniting when the Pinto was hit from the rear.

By the end of 1975 Lee began having trouble at Ford. Most of this seemed to be a personality conflict between Henry Ford II and Lee. The tension continued to escalate, and Lee was fired in July of 1978. He didnít sit around for long. He joined forces with Chrysler on November 2, 1978.

It didnít take long for Lee to figure out that Chrysler was in a state of emergency. There was a serious lack of communication, and there was no team work. Each department seemed to be working in a vacuum. He had to make some drastic decisions. He was forced to fire many of the executives. He tried to set up a partnership between Chrysler and Volkswagen, but Volkswagen realized how deep in debt Chrysler was and the deal fell through. Lee was not able to pull everything together and make it work. He had to go to the government to get Government backed loans. He also bargained with the union for cuts in salary and benefits. He reduced his salary to $1.00 per year to show that everyone at the company must be willing to sacrifice if their company was to survive. This again gives you an idea of his management style. He was able to understand the worker as well as the executives, and somehow pull them together. By 1983 Lee had Chrysler back on their feet, and on July 13, 1983 Chrysler paid back all their government loans. Lee made a public statement, "We at Chrysler borrow money the old fashioned way. We pay it back."

It didnít take long for Lee to figure out that Chrysler was in a state of emergency. There was a serious lack of communication, and there was no team work. Each department seemed to be working in a vacuum. He had to make some drastic decisions. He was forced to fire many of the executives. He tried to set up a partnership between Chrysler and Volkswagen, but Volkswagen realized how deep in debt Chrysler was and the deal fell through. Lee was not able to pull everything together and make it work. He had to go to the government to get Government backed loans. He also bargained with the union for cuts in salary and benefits. He reduced his salary to $1.00 per year to show that everyone at the company must be willing to sacrifice if their company was to survive. This again gives you an idea of his management style. He was able to understand the worker as well as the executives, and somehow pull them together. By 1983 Lee had Chrysler back on their feet, and on July 13, 1983 Chrysler paid back all their government loans. Lee made a public statement, "We at Chrysler borrow money the old fashioned way. We pay it back."

Lee feels the keys to successful management are the ability to concentrate and use time wisely. Establishing priorities and being a problem solver are a must. Managers need to be decision makers as well as motivators. The best way to motivate people is to communicate with them. A good manager needs to listen at least as much as he talks. One of the most important things to remember in business is that every problem can not be structured and reduced to a case study if you want to stay ahead of the competition in todayís global market place. In corporate life there are always people who feel they need additional research, but after a certain point when most of the relevant facts are in, a decision must be made. A certain amount of risk taking is necessary. Businesses donít have the luxury of slow decision making today.

Lee Iacoccaís success in business shows he not only talks about the above keys to success, but he has practiced them, and for him they have worked well.


References

Iacocca, Lee A., 1984. Iacocca, An Autobiography. New York, NY: Bantam Books.

Marcus, Alfred. 1996. Business and Society: Strategy, Ethics and the Global Economy. A Time Mirror Higher Education Group, Inc.

DeHaven, Judy. 1995. Iacoccaís Squabble. The Detroit News. 12 December, Detroit.


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