Word: iacocca
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Four months after being ousted as president of Ford Motor Co., and six days after he had stunned the auto world by taking the same post at troubled Chrysler Corp., Lee Iacocca, 54, sat down with TIME Correspondents Barrett Seaman and Paul Witteman to muse about his new job and his industry. Iacocca's conversation is pure stream of consciousness, leaping from topic to topic at machine-gun speed; it is also refreshingly blunt and unencumbered by modesty. Excerpts: ON WHY HE CHOSE HIS NEW EMPLOYER: I had many offers to be chief executive of big [nonauto] companies...
...Iacocca insisted on being given a free hand in running Chrysler's day-to-day affairs, and evidently he will get it. President Eugene Cafiero, who at 52 is only two years younger than Riccardo and was not a strong candidate to succeed him, was made vice chairman and given vaguely defined duties involving planning. Riccardo announced that he will turn over his job as chief executive officer to Iacocca next year and devote most of his energies to Government relations and Chrysler's finances, which he says already occupy "almost 100%" of his time...
Riccardo says he recruited Iacocca because Chrysler "needed additional firepower." While Ford and General Motors are both enjoying robust sales and profits, Chrysler is in the midst of its worst year since 1975, when it lost $260 million. The company lost $158.5 million in the third quarter alone, and its full-year deficit could reach $250 million. On the plus side, Chrysler in August sold its European automotive assets to France's Peugeot-Citroën in a deal that included $230 million in cash. Riccardo has announced that Peugeot-Citroën coughed up the $230 million this...
...Whatever happens in '79, '80 and '81 will be due to the programs already in place." He adds: "The auto game in the '70s and the '80s will be fuel efficiency, space efficiency, ease of assembly-and none of those are Iacocca's strong points." But others disagree. Says Michael Ward, vice president of Dean Witter Reynolds: "Chrysler's only problem is volume. Iacocca can help; he's a super marketing...
...Iacocca says that he would like to see his new employer develop a "sports car," suggesting that something like the Mustang, which made Iacocca's reputation as a marketing whiz at Ford, may be in Chrysler's future. Iacocca is also expected to inject some new pep into the company's dealer organization. The real test of Iacocca's ability will be in how well he can maneuver within the narrow limits imposed by Chrysler's tight financial circumstances. The auto industry has changed dramatically since he introduced the Ford Mustang in 1964: costs...