Business Columns & Blogs

Celebrity CEO Lee Iacocca, who died recently, helped make the government bailout a thing

In this Aug. 6, 1980, file photo, Chrysler Corp. Chairman Lee Iacocca sits on the hood of K Car Number One, a Plymouth Reliant, in Detroit. Former Chrysler CEO Iacocca, who became a folk hero for rescuing the company in the ’80s, has died, former colleagues said Tuesday, July 2, 2019. He was 94.
In this Aug. 6, 1980, file photo, Chrysler Corp. Chairman Lee Iacocca sits on the hood of K Car Number One, a Plymouth Reliant, in Detroit. Former Chrysler CEO Iacocca, who became a folk hero for rescuing the company in the ’80s, has died, former colleagues said Tuesday, July 2, 2019. He was 94. AP

Another round of “Spot the Generational Differences”? Why, of course!

News item: “Lee Iacocca, the auto executive and master pitchman who put the Mustang in Ford’s lineup in the 1960s and became a corporate folk hero when he resurrected Chrysler 20 years later, has died in Bel Air, California. He was 94.”

Your reaction:

A) Man, does that bring back memories. If there’s such a thing as an American-business folk hero, Lee Iacocca was the modern version of it. He stepped in at Chrysler at a time when the future of American manufacturing, especially car production, was in question. Such was the regard in which he was held that his book became a bestseller, and his name was floated as a serious presidential contender.

B) Lee Iacocca’s fame exceeded his record. The cars that Chrysler built part of its revival on were better than the rolling horror shows Detroit was putting out in the 1970s, but no one is going to remember the K-car as a landmark of automotive engineering. His biggest hit, one that still pays dividends, was the minivan. His biggest legacy was to set the example of corporate America running to Washington (the other one) to be bailed out from the consequences of its own mistakes.

C) Lee Iacocca launched the modern era of the celebrity CEO, one endures to this day.

D) Lee who?

Much like the moon landing that we’ll be commemorating later this month, the significance of Lee Iacocca, not only in his time but to current events, has to be explained by those who were there to those who weren’t.

Doing so is a complicated matter, because in many ways Iacocca was a man of his time, and that time is not this time.

Just the reference to Iacocca as head of one of the Big Three American automakers (and an executive at Ford before that) is an anachronism that will leave many befuddled. But in the late 1970s and early 1980s, the Big Three were still a big deal to Americans, who were as upset by the quality of the cars being manufactured in this country as they were by the incursion of imports into the American car market.

Ask a member of the younger generation to list the Big Three automakers today and you might get a few mentions of Toyota and Honda. They wouldn’t be wrong; Japanese and European carmakers have built a network of plants, mainly in the Southeast. Chrysler, meanwhile, one of the Big Three, has gone through two phases of foreign ownership, first with Daimler-Benz, currently with Fiat.

But Iacocca’s influence is fully contemporary in other ways, starting with the phenomenon of the business executive as a larger-than-life, celebrity-level figure.

It’s not that no one knew who ran American business before the Lee Iacocca era. Names like Ford, Rockefeller, Morgan, Carnegie and (in the West) James J. Hill were as famous as politicians, entertainers and sports stars. Many prominent corporations retain the name of the founder, even if representatives of the founding family were no longer on the scene (Boeing, Weyerhaeuser). People around here always figured Nordstrom was run by Nordstroms, even if they couldn’t name which ones were minding the store.

Iacocca combined a compelling story, a forceful personality and the power of mass media (think of what he could have done in the internet era) into a potent fuel that made him at least as prominent as the company he ran or worked for — much to the displeasure of the Ford who happened to be running that company.

Now the celebrity CEO enjoys near mythical powers to build, transform and, in some cases, rescue companies. Some actively cultivate the image (Steve Jobs), while others inherit it more for the successes of their companies (Bill Gates). To the extent it’s given people more insight into how companies are run and what they’re doing, it’s been a good thing. To the extent it’s given people the impression of CEOs having powers and skills beyond what they actually have, it’s been a bad thing.

The era of the celebrity CEO isn’t done. The current occupant of the White House parlayed celebrity business status into political success (not an easy feat; consider Howard Schultz’s attempts to translate his Starbucks story into a political saga). In the car business, most people may not know who is running Toyota or Ford at the moment, but even the most casual follower of business has heard of Elon Musk and Tesla.

Less discussed in the Iacocca legend is what his years at Chrysler did to make acceptable the notion of a government bailout. It’s hard to fully comprehend in 2019 how controversial the idea was at the time of the federal government aiding a failing American corporation. The Ford administration’s reluctance to help New York City in its financial crisis led to one of the most famous headlines in newspaper history (“Ford to City: Drop Dead”, in the Daily News) and illustrated an antipathy to saving even another governmental entity from itself.

Bailouts are no less controversial today. But the fact that the auto industry and banks got federal aid at the onset of the recession, and everyone from city and state pension plans to student-loan borrowers hope for bailouts of their own, is a result of what Iacocca managed to accomplish for Chrysler.

Lee Iacocca’s time in the public eye ended years ago, and a mention of the name won’t elicit a response for many. That’s one more lesson from his story. Some of the biggest names in the headlines today will be influencing business, culture, politics and society for decades, even if the names themselves fade from the collective memory.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at