not necessarily a ford thing but the downfall of Detroit is a hot topic hear
and Lee makes some good points.
from Fortune Magazine:
In a new book, Lee Iacocca asks, Where Have All the Leaders Gone? Speaking
with Alex Taylor III, Iacocca, 82, talks about Kerkorian, Chrysler and the
future of Detroit
(Fortune Magazine) -- Your third book, due out this month, is about the
state of American leadership. How is Detroit doing on that score?
I give [GM CEO] Rick Wagoner a lot of credit. He had a lot of pressure on
him, but he kept his cool and he stayed with his plan. Their styling is
getting better, and they're doing better. Ford (Charts) has more difficult
problems than GM (Charts). It has so much invested in the truck business; it
has got to get some good cars. I think this new guy from Boeing (Charts)
[CEO Alan Mulally] knows the business pretty well. Not the auto business,
but he knows what it takes to run a big organization and deal with the labor
unions. As for Chrysler, [president] Tom LaSorda is doing a great job in
manufacturing, but I don't know what's going to happen. I'm reading about it
every day. I would hate to see Chrysler go under. It would be tough to live
There are four apparent bidders for Chrysler, including Kirk Kerkorian's
Tracinda, which has offered $4.5 billion. What is your take?
I read about Kerkorian's bid with interest, especially the part where the
New York Times said I supported it, but I had nothing to do with it. I've
decided to stay neutral on this one.
What do you think Kerkorian would do with Chrysler?
He's a gambler, and I don't know what his endgame would be. He'll be 90
years old in June, but he's a healthy guy and he exercises a lot. Twelve
years ago we [Kerkorian and I] tried to take over Chrysler, and we couldn't
raise the money.
How important are the unions to this deal?
Very. The deal is contingent on Daimler (Charts) sharing the legacy costs
and the union negotiating concessions. Those are two big conditions.
Who do you think is going to wind up with Chrysler?
Who knows? Private equity funds scare me. Do they really understand the car
business? I would like to see somebody with a leadership group that has the
experience to handle the dealers and the employees. If I had the money, I'd
buy it. I'd come out of retirement to buy it. Chrysler builds great cars.
Maybe you could sell off Jeep, but I would hate to see it busted up. I've
done my time in Detroit. I live in L.A. now. [Former DaimlerChrysler
chairman] Jόrgen Schrempp asked me to come work for him, and I said, "Where
do I have to live?" When he said, "Stuttgart," I said, "Forget it."
If you were back as chairman and CEO of Chrysler, what would you be doing?
To succeed today you have to set priorities, decide what you stand for. You
can't do all things for all people. I think the model lines are too
complicated at all the Big Three - too many kinds of cars for customers to
assimilate what they're being sold.
In your book you say the news of the Daimler-Benz merger made you "sick."
Why do you think it failed?
There were no synergies. None. And culturally the Germans operated
differently than the Americans. It was emotional when Chrysler sold out to
the Germans. It's extra-emotional now that the Germans are selling - they're
throwing us to the curb, in effect.
What's the matter with Detroit?
Let's start with health-care costs - the legacy costs. There are lots of
retirees out there. They've earned what they're getting, but we can't afford
it anymore. The world has changed. To use a GM number that I quote often,
Toyota (Charts) pays $200 per car in retiree health care; GM pays a little
over $1,500 a car. That's a tough albatross to carry.
People are living longer, and the government and the union and the Big Three
have got to get together and see what they can do to collaborate. The union
contract is coming up in September. That's a watershed contract. The current
contract is too rich.
I hope cooler heads will prevail, and we'll come to some settlement. But the
union is already threatening a strike. They should wait until they get to
the negotiating table to start their talking, but they're doing it in the
press. We've got to work this out together because it's a matter of
Will Detroit's market share keep slipping?
I think it will stabilize. It's pretty bad right now. The imports have over
half of the passenger-car market. I think GM will start coming back a little
bit. But as you know, in this business more share doesn't come easy.
Do you blame the Japanese for Detroit's decline over the past couple of
I've taken on the Japanese forever. Toyota's a great competitor. Nissan's
(Charts) coming on strong. Honda's (Charts) always been great on
engineering. They're good companies, but they had advantages. It's unfair
competition. Their market is closed to us. They still manipulate currency.
When they come to this country they don't have unions, and that's tough to
compete against. Sometimes I think their trade practices are predatory.
In the '80s you suggested raising the gas tax.
Yes. I went to see Reagan and said, "Let's put a 50-cent-a-gallon tax on
gasoline. That's $50 billion. We can cut the deficit in half." He said,
"You've got to be out of your mind. You don't tax gasoline." And he laughed.
So we never did it. Our state and federal taxes add up to about 46 cents a
gallon, compared with $5 in Europe.
What do you think of global warming?
I campaigned for George W. Bush in 2000 and against Gore because I thought
Gore was a little nutty when he was talking global warming. Now I think it's
a serious problem. As I said in my book, I never thought I'd pay $8 to go
see Al give a PowerPoint presentation. There has to be a solution that
everybody's got to join - the whole planet, not one country - and so I've
become a believer. I didn't get too enlightened until years after I left the
What can the auto industry do?
Plug-in hybrids. I think they're virtually here now. We've still got to get
better batteries, of course, but hybrids are good. Expensive and complex,
but they do the job and get good gas mileage. That's the wave of the future.
Some people are betting on hydrogen-powered fuel cells.
I think that's way off. Where are you going to get all that hydrogen? How
are you going to store it in the car? How are you going to distribute it?
That's a long-term problem.
Are you sorry you never ran for president?
I have no regrets, but I am a little despondent, because I love this country
and I want to do something. I'm running out of time. But I've got to cure
diabetes [through research funded by the Iacocca Foundation].
What do you tell young people who are considering going into the auto
Do it. It's an exciting life. I loved going to work in the morning. I just
loved cars. And if you love what you're doing, it shows.