John Riccardo, Chrysler CEO Who Hired Iacocca, Dies at 91by
John Riccardo, who changed the course of Chrysler Corp. in the late 1970s by hiring Lee Iacocca to succeed him and requesting the government loan guarantees that helped save the automaker, has died. He was 91.
He died on Feb. 13 after attending a University of Michigan basketball game in Ann Arbor, Michigan, the Detroit Free Press reported. The Automotive News, which first reported the death, said John Riccardo Jr. eulogized his father yesterday during mass at Our Lady of Good Counsel Church in Plymouth, Michigan, where he is pastor.
Known as “the flamethrower” for his direct, sometimes brusque approach to problems, Riccardo rose through Chrysler’s ranks as a protege of Lynn Townsend, whom he succeeded as chairman and chief executive officer in 1975.
Crisis defined his tenure, which coincided with an economic recession and the U.S. car industry’s worst slump since World War II. In 1974, with new-car sales plummeting, Chrysler cut prices and closed most plants for a month. In 1975, Chrysler canceled its dividend for the first time since 1938. When Riccardo retired in 1979, the Detroit-based company was on the brink of bankruptcy.
In the intervening years, Riccardo pursued two paths that would define Chrysler for decades.
First, he lured Iacocca to Chrysler in October 1978, following Iacocca’s ouster as president of Ford Motor Co. Iacocca became Chrysler’s president with the understanding that Riccardo would step down as chairman and CEO and turn over those titles to him at the end of 1979.
“It was sad in a way,” Iacocca wrote of Riccardo in his bestselling 1984 autobiography, “because he hadn’t even been pushed by Chrysler’s board of directors to approach me. He did it on his own. He obviously realized that the company was in deep trouble and that he wasn’t going to be able to nurse it back to health.”
Second, Riccardo shuttled back and forth to Washington to press Chrysler’s request for federal government assistance, which he said was essential for the company’s survival. When he became convinced that Congress would be more receptive to a new-look Chrysler, he stepped down as chairman and CEO three months earlier than planned.
“I told John that Congress and the country weren’t going to act until we’d staged a morality play,” Wendell Larsen, then Chrysler’s vice president for public affairs, later recalled, “and I told him how he’d been cast: John Riccardo takes on himself all the sins of commission and omission, we drive him into the woods, and the company is pure again.”
Larsen was quoted in “New Deals: The Chrysler Revival and the American System” (1985), by Robert B. Reich and John D. Donahue.
So in September 1979, citing personal health issues as well as his own association “with the past management of a troubled company,” Riccardo stepped down. A month later, when the House Banking Committee held a hearing on the proposed loan guarantees, it was Iacocca who presented the company’s case.
In January 1980, President Jimmy Carter signed legislation providing Chrysler with $1.5 billion in loan guarantees, in exchange for federal oversight of the company’s business operations. Under Iacocca, Chrysler ended up using $1.2 billion of the available funds and paid back the guaranteed loans in 1983, seven years earlier than required. The automaker was on stronger footing when Iacocca retired on Jan. 1, 1993.
In 1998, Chrysler was acquired by Germany’s Daimler-Benz AG, which sold it in 2007 to New York-based Cerberus Capital Management LP. Two years later, Chrysler filed for a government-backed Chapter 11 bankruptcy, emerging as Chrysler Group LLC, majority-owned by Italy’s Fiat SpA.
A spokesman for the modern iteration of the company, Fiat Chrysler Automobiles NV, declined to comment, referring calls to the family.
The Chrysler turnaround of the 1980s made a star of Iacocca, who personally vouched for his cars in acclaimed television commercials. Riccardo entered a quiet retirement, though he did receive praise in Iacocca’s memoir.
“Although it meant the end of his own career, he bent over backward to make sure that the transition would go as smoothly as possible,” Iacocca wrote. “He blew himself out of the water to bring Chrysler back to life. And that is the test of a real hero.”
John Joseph Riccardo was born on July 2, 1924, in Little Falls, New York, the son of a bicycle maker, according to a 1975 profile in the New York Times.
He joined Chrysler in 1959 as a financial officer after working as an accountant at Touche, Ross, Bailey & Smart, a predecessor of today’s Deloitte LLP. Over the years his titles included vice president of Chrysler of Canada, sales manager at the Dodge division and assistant general manager of the Chrysler-Plymouth division.
He served as a corporal in the U.S. Army Quartermaster Corps during World War II, then received bachelor and master’s degrees in economics from the University of Michigan, the Times said.
Riccardo was named Chrysler’s president in a management shakeup in January 1970, succeeding Virgil E. Boyd, who became vice chairman, a new post. Townsend’s retirement in July 1975 prompted Riccardo’s elevation to chairman and CEO.
He had five children with his wife, Thelma.