BEHIND THE WHEEL AT CHRYSLER
The Iacocca Legacy
By Doron P. Levin
Harcourt Brace 354pp $25
As the man who "saved" Chrysler, Lee A. Iacocca still enjoys a sterling image in most parts of the world. But around Detroit, that reputation is more than a little smudged: It's common knowledge that the cigar-chomping executive bungled his last few years at the carmaker's helm. He delayed spending the billions needed to design new cars and trucks until the company started sputtering on clunky, poor-quality products. He steered scarce resources to stock buybacks and an ill-considered diversification into corporate jets and financial services. And he waffled over retirement until the frustrated executives waiting to take over began to walk.
Doron Levin, a seasoned automotive journalist who is now a columnist at the Detroit Free Press, chronicles those blunders in his new book, Behind the Wheel at Chrysler. Levin portrays Iacocca as an egotistical, domineering executive whose flawed decisions nearly strangled the company he once rescued from bankruptcy. It is a well-researched, dispassionate account that goes a long way toward dismantling Iacocca's mythical stature, which began when he vaulted to prominence as the father of the first Ford Mustang and grew throughout the 1980s, as Chrysler thrived.
Although much of the territory Levin covers has been dealt with in newspaper and magazine reports, Behind the Wheel illuminates by dissecting Iacocca's record and placing it in historical perspective. With telling anecdotes, Levin shows how the auto industry changed radically during the 1980s and how Iacocca, "dazzled by the power, perks, and celebrity of his office," failed to keep pace. He skewers Iacocca's hypocrisy toward Japan, whose carmakers the Chrysler boss publicly lambasted while buying cars and components from them behind the scenes.
Levin's most gripping passages detail Iacocca's clashes with other big egos at Chrysler. Most notable is his slugfest with President Robert A. Lutz, who desperately wanted the chairman's job but who largely foiled his own chances by flaunting his disdain for the boss. Lutz, "who loved to mimic people he didn't like, mocked and derided Iacocca whenever he had a chance," writes Levin. "His performances were even known to spill over to the outer offices, where they were overheard by people who admired Iacocca."
A taste for high living at company expense rankled everyone from the federal watchdogs overseeing Chrysler's bailout to Iacocca's colleagues, Levin writes. To save money, the government forced the sale of all company planes in the early 1980s, a move Iacocca resisted. Later, when the cash started rolling in again, Chrysler purchased corporate-jet maker Gulfstream and had a sumptuously appointed G4 always at the chairman's disposal. More recently, when Chrysler was strapped for cash for new models, Iacocca was spending millions on a makeover of Chrysler's Waldorf-Astoria luxury suite. In the early '90s, the company purchased two of Iacocca's homes so the chief wouldn't have to bother selling them himself.
Levin makes a case that some of Iacocca's mistakes were the direct result of his greed. Much of Iacocca's compensation in his last years at Chrysler was in the form of stock and stock options. Thus he had a vested interest in stock buybacks and other short-term gambits aimed at boosting the corporation's share price. It's a cautionary tale about what can happen when boards give top executives incentives to focus on stock value rather than on the fundamentals. Now, Chrysler's directors are taking a different view of Iacocca's stock options. They're so miffed at his role in investor Kirk Kerkorian's botched takeover bid that they recently blocked him from exercising $31 million in options they had earlier granted.
Unfortunately, like its subject, Behind the Wheel suffers some debilitating flaws. Early chapters that incorporate historical material tend to drag. Levin covers much well-trod territory, such as Iacocca's 1978 firing from Ford Motor Co. And just as Iacocca's monologues tend to meander, Levin's tale sometimes wanders off in confusing directions. For instance, a chapter on "The Making of the L/H" begins with former Chrysler engineer Glenn Gardner's last-ditch effort to design a family sedan to compete with the Ford Taurus and other rivals, beginning in 1989. Then, inexplicably, the reader is taken on a U-turn for a discussion of an Iacocca purge of the board of directors.
There also are gaps in the account. Iacocca's involvement in the Kerkorian takeover attempt gets short shrift: In a hastily recast epilogue, the author goes over the basic events--Iacocca's partnership with a would-be raider intent on getting his hands on a chunk of Chrysler's $7.3 billion cash hoard. And in this coda, Levin misses his chance to show how Iacocca, by engaging in such a naked money-grab, has undermined his own carefully nurtured reputation.
In fact, given Iacocca's recent stumbles, it's a wonder he has much of a reputation left. No doubt Chrysler's current rebound, after another near-brush with oblivion in the early 1990s, explains the continuing esteem in which the former boss is held. But that success is as much despite Iacocca as because of him. Levin's timely, levelheaded review of the record should prompt a more critical assessment of Iacocca's legacy as Chrysler's savior and as a role model for executives everywhere.
BY DAVE WOODRUFF