Where's Lee Iacocca when you need him?

Posted by: David Welch on November 20, 2008

Anyone who watched the Congressional hearings for a Detroit bailout will understand why Congress is waiting to vote and demanding a business plan before they approve a bridge loan. In a hostile environment, all three Detroit CEOs were utterly unconvincing. This is especially true of General Motors Chairman and CEO Rick Wagoner.

They all spent most of their time talking about what they have done to date. There was no plan detailing other things the companies can do to save cash and make sure the loan will be paid back. They didn’t offer anything resembling a business plan that showed how short they are and how the money will see them through the tough times. In a set of hearings where many lawmakers said that Detroit’s business model has failed, they didn’t have anything new to sell. Congress even had to pry out of them how much each company actually needs. That’s no way to approach a loan officer.

There was no salesmanship, either. When Lee Iacocca went to Washington in 1979, he offered to work for $1. (Granted, current Chrysler CEO Robert Nardelli did, too, but the other two didn’t immediately follow) Lido said back in ’79 that the company just needed money to tool up to make the K-cars. There was something in the pipeline to save the company if they could just get the cash to make them. Wagoner, Ford CEO Alan Mulally and Nardelli didn’t have such a plan. Though in fairness, Nardelli came closest to saying that he needed cash to engineer new cars. But none of the CEOs have Iacocca’s pitchman qualities.

In that sense, Wagoner was ill prepared. He’s a likable enough guy. But he has never been a fan of media coverage or the spotlight. He came off as aloof and avoided some tough questions. In fairness, Detroit hasn’t had a CEO with Lido’s presence since he retired. But if there was a week when Wagoner, Mulally and Nardelli had to rise to the occasion, it was this one. Now, they must sweat out more deliberations in Congress.

Reader Comments

Faraz Zuberi

November 20, 2008 7:50 PM

Yes, the Big 3 need a plan by Dec 02 to present it to the Congress.

While restructuring and making plan, they need to define a process to improve their sales. Ultimately, it all boils down to "Sales". If they can not improve their sales, they can not succeed.

My company, Exelra Inc. has developed an innovative marketing method (patent pending) to help the Automakers to substantially increase their market share. Detroit automakers should give Exelra Inc a chance and listen to our marketing method that could revolutionaize the way autos are sold in US. You can read about our innovative marketing plan at www.exelra.com or call me at 214-282-8810 to discuss.

Either the Big 3 do nothing and wait for the economy to recover (and hopefully the sales will improve) or they can be proactive and look into improving sales thru creative marketing which is unique to the auto industry. This is exactly what our patent has to offer.

Schmeltz

November 20, 2008 8:55 PM

We should start a petition to get Lee Iacocca back to Detroit leadership where he belongs. If Bob Lutz can do it, by darn well Lee can too!

Lee: Your country and your industry needs you! Please come back and fight!

Tony Kuhn

November 22, 2008 3:06 PM

First, his name is spelled: Lee Iacocca.

I know for a fact he is living in California and is available as a consultant.

David Welch

November 22, 2008 3:35 PM

Tony, David Welch with BusinessWeek here. You are quite correct. Edit made. Thanks and cheers.

Markus Fors, Sweden

November 22, 2008 5:12 PM

I'm an Iacocca fan since long but I also read an article from The Guardian (UK) by Ryan Avent about his opinion about Lee Iacocca

"Chrysler went to the government hat in hand, seeking help to avoid bankruptcy. It got it, and in return promised to build better and more fuel-efficient cars.

Chrysler survived and even thrived at times on sales of minivans and SUVs, but the firm never solved its fundamental problems.

The bail-out kept a company alive, yes. But it failed to save the Rust Belt or produce the necessary top-to-bottom restructuring. We have little reason to expect a different outcome this time around"

http://www.guardian.co.uk/commentisfree/cifamerica/2008/nov/11/obama-car-industry-bailout

-----------------------------------

And from Plug In America Jay Friedland

No Bail Out Without Strings

"Now the automakers are asking to use that money for short-term cash flow needs. In other words, at the brink of bankruptcy, the automakers are still resisting technological change and wishing for business as usual.

GM CEO Rick Wagoner admits his company is burning through "$5 billion each month."

How does GM expect to repay taxpayers, and compete in tomorrow's showrooms, without undergoing change?

After years of resisting technological change, including scrapping electric car programs, auto manufacturers are asking for a taxpayer handout. Let's make sure that any bailout is contingent on the auto companies retooling to make the clean cars we want and need.

Markus Fors
Sweden

CARLOS E. URRUTIA

December 7, 2008 10:20 PM

I have never understood why the car manufacturers in this country make so
many models instead of making three
super models in three categories:
basic - special - deluxe or something
along those lines. Strive for quality and reliability as the most important
goals. Amen!

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