After a long climb, Iacocca attains the presidency - temporarily
After receiving lavish praise and publicity for the successful launch of the Ford Mustang and for other important vehicle and marketing initiatives, Iacocca kept hearing from Henry Ford II that he was his man. Yet Iacocca stood by and watched Bunkie Knudsen get the job.
Even when Knudsen was fired in 1969, after only 19 months as Ford's president, Iacocca felt passed over again as Henry Ford II instituted a three-man office of the president, with Iacocca as head of Ford's North American operations.
Finally, when the troika failed, Iacocca got his shot. In early December 1970, Henry Ford II summoned Iacocca to his office and told him of his plan to make him president.
"This is the greatest Christmas present I've ever had," Iacocca wrote in his autobiography.
He immediately called his wife, Mary, and his father in Allentown, Pa.
On Dec. 10, 1970, Ford Motor Co. announced that Iacocca would be president. For Iacocca, as he recalled in his autobiography, it was a dream come true - one he had written on a slip of paper that laid out his career path, complete with target dates for promotions, salaries and benefits.
'The king liked me'
"If Henry was king, I was the crown prince," Iacocca wrote.
"And there was no question that the king liked me."
That wouldn't last long.
At the same time, Iacocca admitted feeling a letdown after having made it to the top of the mountain he had been climbing his entire career. He wondered what he would do for an encore, since he was only in his mid-40s. Little did he know.
At the start of Iacocca's presidency, Ford had 432,000 employees and a $3.5 billion payroll, according to Iacocca's autobiography. It was building 2.5 million cars and 750,000 trucks in North America and another 1.5 million vehicles overseas. In 1970, Ford's profits were $516 million on sales of $14.9 billion.
The best laid plans
Iacocca's first task was to cut costs to boost profits. He instituted what he called his "four fifties" plan, which was to cut $50 million from four major areas. Within three years, Iacocca estimated, Ford's profits would rise $200 million for a 40 percent increase, excluding any increases in vehicle sales.
He also instituted his "shuck the losers" program, which would eliminate money-losing or minimal-profit operations if managers couldn't turn them around.
Instead of sales rising, they plummeted by half a million units in 1974 after the oil embargo of 1973 and the onslaught of small, fuel-efficient cars from Japanese manufacturers.
Iacocca and his top product planner, Hal Sperlich, saw small cars as the wave of the future and scoured the company for a way to create one quickly and inexpensively. Their idea, code-named Wolf, would use an enlarged version of Ford's European Fiesta as its base and outfit it with a Honda engine. But Henry Ford II nixed the idea.
It was the first of many Iacocca ideas that Ford would shoot down. And in 1978, he shot down Iacocca.