What This Country Needs
The architect of an earlier bailout says it’s time once
again to rev up the auto industry—and the nation
Thirty years ago Chrysler chairman Lee Iacocca engineered
a controversial government bailout of the world’s third-largest
automaker. Chrysler paid back its loan in three years, and Iacocca
became a business icon who, by 1985, rivaled George H. W. Bush
in presidential preference polls. In an
exclusive interview
about the economic
challenges before us,
the retired 84-year-
old displayed his gift
for plain speaking.
HE WAS CAR CZAR
“Nobody’s worth
$100 million a year,”
says Lee Iacocca, who
in 1980 cut his own
pay to $1 a year.
The free lunch is over
“We’re drowning in debt,
but our public servants are
always talking about a free
lunch. Nobody’s asked us
to do anything but enjoy
life. But think of it, just in
November, 500,000 unemployed. It’s a critical
time in this country.”
Detroit can be saved—
just like before “The
Loan Guarantee Act of
1979 was tough. It was
extreme oversight. And
it was sacrifice at every
level. While we were getting a loan of $1.2 billion,
our employees, dealers,
and suppliers conceded
$2.5 billion. Without them, we would
have died.
“I remember our tire supplier was
Goodyear—Chuck Pilliod, the CEO. At
one point we hadn’t paid them for six
months. I said, ‘How do you keep your
board shipping us tires?’ He said, ‘If it
doesn’t work, you’ll be talking to a new
CEO. I’ll be fired.’ So you’ve got to get
everybody working together. That’s
what we need today.”
Workers hold the key “If there are no
concessions made this time, we won’t
correct the problem. Our costs are too
high. If you say, ‘Blame it on the union,’
well, the unions served a great purpose.
They helped build the middle class. But
we can’t afford $50 to $75 an hour to
build a car. To build anything, really.”
Health care costs are killing us “We
save maybe 15, 20 percent by building
a car in Canada because the Canadian
government’s paying that 15 percent for
workers’ health insurance. The United
States has the most expensive health
care in the world, and we don’t have
the best record, whether
it’s infant mortality or
whatever. We’re just not
there with the rest of the
world. How long can we
tolerate that?”
