Commemorative Speech Why American Cars

Commemorative Speech

Why American cars were failing in the 1970s

Lee Iacocca's success at Chrysler and Ford

America needs another Iacocca

Early Life

Immigrant Parents

Early Jobs

Wagon at grocery store

Fruit selling

Education

Not allowed to serve in WWII

Lehigh and Princeton

Ford Success

Mustang

Baby boom trends

Younger drivers

Women drivers -- the 'two car home'

Wealthier suburban Americans

President of Ford

Unusual because of background and religion

IV Chrysler

million bail out -- loan

K-car and mini-van success

The need for a new Iacocca

Commemorative Speech: Lee Iacocca

Toyota dominates the American market. Gas prices are soaring. There is a crisis in the Middle East of epic proportions. The worldwide demand for American cars has curled up and died and even American consumers are turning in droves to fuel-efficient Japanese models. An accurate portrait of the America automobile market today? Perhaps, but I'm talking about America in the early 1980s. Thanks to the inspired leadership of Lee Iacocca, Chrysler skyrocketed to the forefront of the auto industry once again, when industry analysts were writing the company's obituary. As he had once shown far-reaching vision at Ford, making Ford the number one car manufacturer in America with the 'pony car' known as the Mustang, vanquishing General Motors new dominance -- in the 1980s Iacocca set a new, positive direction for Chrysler.

Iacocca's success story is a classic American immigrant story. Although you all probably know him as Lee, Lee Iacocca was born Lido a. Iacocca on October 25, 1924 to Italian immigrant parents. His father only had a 4th grade education and pushed a hot dog wagon, sold real estate, and ran a rental car business -- anything to make ends meet. Ten-year-old Lee struggled to help his family by taking odd jobs. He often offered to help shoppers at the local grocery store by using his little red wagon to pull their groceries home, hoping to get a tip, which he would give to his mother. You could say this was Lee's first success 'on wheels.' At sixteen Lee worked sixteen-hour days in a neighborhood fruit market while still excelling in school (Swinfin, 2007).

The Great Depression hit the Iacocca family hard, but through the kind of frugality Lee would later show at Chrysler, they survived. Lee said that it was at the family table that he learned to hate waste of any kind -- cutting Chrysler fat, cutting costs -- good business sense learned early on in Lee's life. Then, when Lee tried to enlist in the army to fight in World War II, he was classified as 4F, unfit to serve because of the rheumatic fever he suffered as a child. But he persevered and got a scholarship to Lehigh University, even without the financial help of the GI bill. His goal was simple, quantifiable, and direct, just like the later goals and benchmarks he would make for Chrysler. He would make $10,000 a year by the time he was twenty-five, a considerable sum at the time, and then progress to becoming a millionaire (Swinfin, 2007). Nothing could dampen young Iaccoca's resolve -- not depression, war, rejection, or the constant threat of poverty. He was like an unstoppable force of nature.

After graduating from Lehigh University with a degree in engineering, Lee went on to Princeton, where he had won the Wallace Memorial Fellowship. Then, he got a job as an engineer with the Ford Motor Company, one of the worldwide leaders in car manufacturing at the time. Ford's dominance, however, was being threatened by General Motors. At Ford, he became known as the Father of the Mustang, the model that saved Ford's image and propelled it to the top of the car-manufacturing heap once again.

Lee always had his eye on current market trends. He predicted number of car-buying young adults between the ages of eighteen and thirty-four would increase, based upon post-war 'baby boom' demographic trends. He also noted that more Americans were moving to the suburbs. He saw this would mean an increase in two car families, and more women would be buying cars, which meant that color, design, and shape would become a more important factor in deciding what car to buy -- no more of the 'any color you want, as long as it's black' type thinking which still dominated the Ford mentality. He also thought that Americans would be more willing to spend more money on cars, as the average American in the 1950s and 60s was growing richer (Swinfin, 2007).

The result of all this analysis -- Mustang was born! It was a sexy sports car that a young man might want for his first car, but that that women could still drive around the neighborhood to do their shopping. Iacocca 'got' the Baby Boom, suburban car-driving teen lifestyle even before it became an official trend -- he was ahead of the curve. The predicted promise of the 'pony car' promised plenty of success for Ford!

The Italian-American Catholic Iacocca became president of Ford in 1970. This was considered ground-breaking, in a company dominated by WASPs, and family tradition ("Lee Iacocca," Britannica Concise Encyclopedia, 2006). However, President Iacocca's brash style clashed with the more buttoned-down style of management of Ford, specifically the personality Henry Ford III. At Ford, toeing the line and making your character as conformist as an old-style Model T. was often more important than the profits. Lee's innovation and naked determination to be the best didn't always fit in. But Iacocca was ready for an even greater challenge. He moved onto Chrysler, a once proud star in the American automotive firmament which had fallen into bankruptcy.

People said his task was hopeless, but Iacocca ignored these doubters. At first, as predicted Iacocca was unable to get private banks to finance his vision for Chrysler. But he went to President Carter and Congress and asked for $1.2 billion in federal loan guarantees. The loss of jobs and a major American automotive company would further destabilize the already fragile American car market, he argued. Congress agreed, and passed the Chrysler Loan Guarantee Act. Filled with the confidence, and knowing he had benefited from the trust and the taxpayer, Iacocca made Chrysler prosper. "The K. car, and the numerous models derived from it (including the minivan) put Chrysler back into the black" (Goodrich, 1990:1).

This came at a price -- Iacocca had to be harsh. It meant layoffs, wage cuts, and plant closings to make the company more efficient. Success always comes at a price. But Lee's most important insight was the need to shift to more fuel-efficient cars and compete with the Japanese behemoths of Toyota and Honda with an aggressive advertising campaign that restored the trust of the American populace in American-manufactured cars. Subcompacts were the new order of the day and smaller cars were better cars. This was new, innovative thinking for the American car industry