Lee Iacocca and His Role in the Development of the American Auto Industry

Many famous people left a significant mark on the history of the US automobile industry.

Among them, Lee Iacocca stands out, having held high-status positions in various American companies for a long time and helping them achieve previously unprecedented success. Even though this man died in 2019 (at 94), his memory is still preserved, and his ideas and work methods will significantly benefit humanity for a very long time. Let's study the biography of Lee Iacocca in more detail and determine his role in the development of the American automobile industry.

Lee Iacocca's Tenure at Ford

Lee Iacocca's journey in the US automotive industry began with work at Ford. He got there almost immediately after graduating from Lehigh University and receiving a degree in industrial engineering. That is why Lee Iacocca first accepted the design engineer position and only then transferred to the marketing department. The reason for such a sharp change in the direction of activity was the desire of a young specialist at that time to work with people and not with various mechanisms. Several successful years in his new position elevated Lee Iacocca's status at Ford. Thanks to this, in 1960 (14 years after the start of work), the future legend of the American auto industry could move to management work. His new position was that of vice president.

In 1962, Lee Iacocca proposed ​​creating a revolutionary sports car with a recognizable design equally well-suited for any task. The vice president's initiative was approved by management, which marked the start of the construction of the legendary Ford Mustang. This car was introduced in 1964. It instantly became famous throughout America, and hundreds of thousands eagerly waited for its sales. Once the Mustang arrived at Ford dealerships, unprecedented events began to occur. The cars sold almost instantly and brought huge profits to the company. In the first few months, more than 250 thousand models were sold, the net income from which exceeded $1 billion.

Lee Iacocca's implemented ideas helped him become the most influential person in the company. In this regard, in 1970, he was made president of Ford. Having achieved his initial goal, Lee Iacocca was so happy that he did not notice the approach of complete collapse. This happened in 1978 when he was fired from the company. The reason for this was the popularity of Iacocca, which Henry Ford II envied. This was followed by several other unpleasant events, seemingly sending the brilliant manager to the bottom.

Lee Lacocca's Legacy at Chrysler

Despite several setbacks, Lee Iacocca quickly regained the strength to resume his activities. Two weeks after his dismissal, he was appointed head of Chrysler, considered one of Ford's two main competitors. Iacocca did not see this as a betrayal since his departure was the personal initiative of Henry Ford II. In a new place, he began to fight for the company's survival. At that time, Chrysler was on the verge of bankruptcy, and the arrival of Iacocca could not dramatically change the situation. 

However, a few months later, the new head of the company made several radical decisions that made it possible to achieve at least some financial stability. In particular, he closed all Chrysler plants operating at a loss, sold non-core assets and fired many useless workers (people who were not directly involved in the development or production of cars). He controlled all processes independently, thanks to which his plans were implemented 100%. Iacocca also made several personnel changes and attracted talented General Motors and Volkswagen managers. He even reduced his salary to improve the company's financial affairs. During this period, it was only $1 per year, proving that Iacocca worked all his life not to replenish his bank account but to develop the US automobile industry. The move also increased his support from remaining Chrysler employees.

In early 1979, Lee Iacocca implemented new operating rules for all Chrysler facilities. He paid particular attention to the quality of performance of specific tasks. For control, he and other managers removed several cars from the assembly line daily and sent them to the laboratory. They were compared with new Toyota models, considered the quality standard then. Naturally, Chrysler cars were inferior to the Japanese in many respects. This became the basis for further improvement of products.

The new approach to work introduced by Lee Iacocca required additional financial investments. That is why the head of Chrysler turned to the US government with a request to issue a loan to the company in the amount of $1.5 billion. As arguments, Iacocca cited statistics in which Chrysler's bankruptcy would cost almost twice as much (because all employees would lose their jobs and the state would be forced to pay them unemployment benefits). After short meetings, the loan was approved, thanks to which Chrysler shares increased in price many times in the early 80s. Iacocca's competent management allowed it to reach record profits by 1983 and quickly repay the loan. At the same time, the Chrysler K line of cars was released, further increasing the company's revenues. All models were as economical, comfortable and attractive as possible.

One of Iacocca's main achievements was the appearance in 1983 of a new type of car - minivans. They immediately became popular in the United States and did not go out of fashion over the next few decades. Even today, such vehicles are popular in car dealerships and at online auctions, where you can find not only minivans but also wrecked CTS for sale, as well as other popular models. In 1987, Iacocca insisted on acquiring American Motors Corporation and all its divisions (including Jeep). This decision had a positive impact not only on the financial condition of the company but also on Chrysler's reputation. Lee Iacocca retired in 1992. Without him, the company was declared bankrupt in 2009.

Life After Retirement

After leaving Chrysler, Iacocca tried his hand at other activities. He often acted as an investor in various promising projects (mainly related to the gaming industry), which he independently chose from many proposals. In 1993, he became one of the leaders of MGM Grand. He was invited to this position by multi-billionaire Kirk Kerkorian, with whom Iacocca once again tried to become the head of Chrysler. Then, there were attempts to realize that he was in the gambling and restaurant business and the production and sale of food products. However, he did not achieve success in the automobile industry.

At the beginning of the new century, Iacocca funded research that would find better ways to treat diabetes, from which his wife had previously died. He invested much money in this direction, allowing scientists to work with advanced equipment. He also provided financial assistance to Lehigh University, where he once received his education. With his funds, the previously empty premises of this educational institution were rebuilt and renovated, and several additional faculties were opened. In 2002 and 2008, Iacocca published two books in which he spoke in detail about events that remained outside the scope of his professional activities. For example, in 1988, he seriously considered running for the presidency of the United States. His popularity as the head of a successful company gave him a very high chance of success. This was confirmed by various surveys conducted at that time. However, Iacocca still did not dare to go into politics and focused on the development of the American automobile industry. On July 2, 2019, Lee Iacocca died at 94, but his memory will live forever.

Even if you have little interest in cars, you probably know about Lee Iacocca. This legendary personality left his mark on the US automotive industry and allowed it to develop actively. Nowadays, Lee Iacocca is a standard with which all influential leaders of American companies are compared. His advanced ideas and work methods are copied down to the smallest detail, allowing US automakers to compete on equal terms with Asian and European automakers.