The Chrysler Years

The Chrysler Years

Lee Iacocca was named President of the Chrysler Corporation on November 1, 1978 by John Riccardo, Chairman of the Board of Chrysler, less than four months after parting ways with the Ford Motor Company.  A self-described “car man”, Iacocca couldn’t see himself in any other business.  He well understood the challenges that lay ahead, as the precarious financial state of the company was public knowledge.

Iacocca’s first order of business was to get the company back on firm financial footing – he knew it had the strongest engineering program of the “Big Three” (General Motors, Ford, and Chrysler), and therefore would succeed in developing innovative products certain to regain the car-buying public’s trust and interest.

Recognizing that it was imperative to change business practices at Chrysler immediately, Iacocca addressed critical communication practices in the company.  For example, Iacocca learned that manufacturing units were engaged in building vehicles for which they had no orders as the sales force was not communicating with the manufacturers.  This resulted in a large, expensive, inventory deteriorating in remote regions in the United States and Canada.  He restructured this process to eliminate unsold inventory, requiring dealers to anticipate need and place firm orders each month.  At that time, expenses far outpaced income.  Chrysler was spending approximately more each day on parts, labor, and overhead, while accounts were rapidly dwindling.  Lee Iacocca was able to cut costs by closing plants and restructuring personnel. 

Iacocca’s professional aspirations were realized within a year.  In September 1979, just ten short months after his appointment as President of the Chrysler Corporation, Riccardo retired as Chief Executive Officer, leaving Iacocca to fill that role and free to name his own successor.  His appointment of the experienced Paul Bergmoser as President freed Iacocca from day-to-day management responsibilities to concentrate on lobbying the federal government to help sustain the beleaguered company. 

The company first approached the government for help in the summer of 1979.

Marketing Chrysler:
“If you can find a better car - buy it!”

Lee Iacocca became one of the most recognizable men in America when a series of direct television advertisements enabled him to enter into millions of homes.  This national exposure was the brainchild of Leo-Arthur Kelmenson, an advertising executive who had worked closely with Iacocca at the Ford Motor Company at a time when Kelmenson’s firm, Kenyon & Eckhardt, produced most of the advertising for the automotive giant.

When Iacocca left Ford in 1978, Kelmenson announced that Kenyon & Eckhardt would become the exclusive advertising agency of the Chrysler Corporation in 1979.  Chrysler was teetering on the brink of bankruptcy at that time, and the surprising move served as testimony to Kelmenson’s faith in Lee Iacocca’s ability to turn the company around.

Kelmenson’s first campaign centered around the theme: “Would America be better off without Chrysler?”  He used television advertisements to urge approval of a $1.5 billion federal loan guarantee package, which was authorized in 1980.  This initial advertising campaign was just the beginning.  Kelmenson stimulated renewed interest in Chrysler’s cars by putting Lee Iacocca in front of the camera as corporate spokesperson.  The firm produced a series of ads in the 1980s featuring conversational lines that challenged the American public: “If you can find a better car, buy it.”  The ads not only made Lee Iacocca a household name, synonymous with Chrysler’s return to profitability, but they also helped to turn Chrysler around.

According to a New York Times article, Leo-Arthur Kelmenson began his advertising career at the firm Lennen & Newell, where he rose to senior vice president before joining Kenyon & Eckhardt in 1968.  He remained chief executive at K&E through a series of mergers, the last of which made him the chief executive of a marketing, advertising and public relations firm known as the Bozell Group.  He retired in 1999.

Lee A. Iacocca.  “We Can Do It the American Way,” Speech Presented at the National Press Club Luncheon, Washington, D.C.  July 22, 1981.
                    
As Chairman of the Board of the Chrysler Corporation, Lee Iacocca was invited to speak about the company’s milestones at a wide range of venues. This is a copy of a speech presented at the National Press Club. In it, he provides details about Chrysler’s finances and technological advances.