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Iacocca and Chrysler: How a Corporation was Saved. Presented by: Steve Kaman. Outline. Background Life at Ford Chrysler Ripe for Change Enter Lee Iacocca Changes at Chrysler Iacocca’s Qualities of a Leader. Background. Lido Anthony Iacocca Born: October 15, 1924

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Presentation Transcript
outline
Outline
  • Background
  • Life at Ford
  • Chrysler Ripe for Change
  • Enter Lee Iacocca
  • Changes at Chrysler
  • Iacocca’s Qualities of a Leader
background
Background
  • Lido Anthony Iacocca
  • Born: October 15, 1924
  • Allentown, Pennsylvania
  • Son of Italian Immigrants
  • Experienced Racism
  • Mechanical Engineering at Lehigh
  • Masters from Princeton
career at ford motor company
Career at Ford Motor Company
  • Began as student engineer in August 1946
  • Decided to leave engineering
  • First job in sales
  • Rapidly moved up the corporate ladder
  • The Mustang
  • 8 years as president
  • Fired July 13, 1978
conditions at chrysler
Conditions at Chrysler
  • Over $1.2 billion in debt
  • Debts with hundreds of creditors
  • Sales dropping
  • Increasing Federal regulations
  • Top management not aware of what was going on
  • Habit of treating suppliers poorly
the chrysler years problems
The Chrysler Years - Problems
  • Immediately recognized numerous problems
    • All sections worked independently
    • 35 vice-presidents with no committee setup
    • No centralized accounting department
    • $500 million in inventory (not at dealerships)
    • Leasing cars to Avis and Hertz
the chrysler years solutions
The Chrysler Years - Solutions
  • Built his own team
  • Established “quality circles”
  • Fired two Ad agencies, and hired Kenyon & Eckhardt
  • Showed suppliers the future
  • Gave $62 million rebate to Army
the chrysler years the loan
The Chrysler Years – The Loan
  • Asked for guaranteed loans from government
  • Had to prove company on new path
  • Concerns over effects on free enterprise
  • Numerous concessions
the loan the next step
The Loan – The Next Step
  • Began working on concessions:
    • Reduced own salary to $1.00
    • Used “help or go bankrupt with us” with suppliers
    • Explained that helping was only way banks would get money
    • Work cuts through unions
the loan the payback
The Loan – The Payback
  • The K-car – American alternative for economy car
  • Tied K-car with K-Mart
  • Load repaid in full, seven years early
continuing the upswing
Continuing the Upswing
  • Brought back the convertible
  • Brought in the minivan
iacocca s qualities of an innovator
Iacocca’s Qualities of an Innovator
  • Preparation – Art of Thought
  • Decisiveness – Creativity in Business
  • Management is motivating people – The Owner’s Manual for the Brain
  • Speak to people in their own language – The Owner’s Manual for the Brain
iacocca s qualities of an innovator13
Iacocca’s Qualities of an Innovator
  • Consulting workers – Programming Pearls
  • Don’t judge too early – Creativity in Business
  • Providing a dominant design – Mastering the Dynamics of Innovation
summary
Summary
  • Skills cultivated at Ford
  • Chrysler ripe for help
  • Iacocca steps up
  • Management, process and product innovation saved company
  • Connections between Iacocca and our readings
references
References
  • Iacocca, Lee with Novak, William. Iacocca: An Autobiography. New York: Bantam Books, 1984.
  • Levin, Doron P. Behind the Wheel at Chrysler: The Iacocca Legacy. New York: Harcourt Brace and Company, 1995.