Marketer Profile

Date: 2015-10-07; view: 377.

Lee A. Iacocca of Chrysler Corporation

Lee A. Iacocca began his career in the automobile industry in1946 with Ford Motor Company. Iacocca rose rapidly to the top at Ford and became president in 1970; however, in 1978 he was fired. Iacocca could have received up to $ 1.1 million in deferred bonuses from Ford if he had not gone to work for another automobile company. Instead, he accepted an offer to be president at the almost bankrupt Chrysler Corporation. In 1978, when Chrysler was close to bankruptcy, Iacocca faced the almost impossible challenge of making the company profitable again. He immediately responded to this challenge by attempting to transform Chrysler into a marketing oriented firm. Chrysler was still a production-oriented company, and its rationale for existence was superior engineering. Former Chrysler president Townsend said it best, "What this company had in all of its pro­ducts was more engineering differences that any other products being offered to the American people". Iacocca decided to change his orientation by giving the American car-buying public what they wanted instead of what Chrysler engineers liked to design. He began to give them smaller cars with fuel economy, good styling, better quality, low cost maintenance, and lower prices. He also brought back the convertible, which was an instant success, and introduced a minivan geared toward today's smaller families.

One successful strategy that Iacocca introduced at Chrysler was production of several cars from interchangeable parts. Iacocca took two successful K-cars-the Plymouth Reliant and the Dodge Aries - and created the Chrysler LeBaron, Dodge 400, Chrysler B class and Chrysler New Yorker. The cost of these transformations and other new product development ran about $ 6 to $ 7 billion between 1980 and 1985.

Iacocca also realized that Chrysler needed more than the con­sumer's patronage to succeed, so he also developed good exchange relationships with other key public including the Federal govern­ment. He obtained major wage and salary reductions from the Uni­ted Auto Workers, received $ 1,2 billion in guaranteed government loans, obtained discounts from key suppliers, and borrowed money from its dealers. Under the direction of Iacocca, Chrysler succeeded not only in becoming highly profitable, but also in paying back all of its government-guaranteed loans by early 1984.

Source: Chrysler Corporation annual reports

and selected news releases