Lee Iacocca's long, painful fall from grace at Ford Motor Co. ended July 13, 1978, when Henry Ford II fired him.
Robert Lutz, now General Motors' top product executive, is another powerful automotive figure who had one person come between him and the top job at his former company - in Lutz's case, the former Chrysler Corp.
In this excerpt from Six Men Who Built the Modern Auto Industry, by Automotive News Managing Editor Richard Johnson, Iacocca, 80, reflects on his day of reckoning with the Deuce. And Johnson revisits the complicated relationship of Lutz with former Chrysler Chairman Robert Eaton.
At Ford, the family comes first
When Robert McNamara resigned as Ford's president in 1960 to become John F. Kennedy's secretary of defense, Lee Iacocca was caught in the updraft. He was promoted to the top job at Ford Division. Iacocca had lost his chief sponsor in the company, but he didn't see it that way at the time.
"My first thought was, 'What happens now?' I knew I could not be president as long as he was there. I thought, 'He's out of the way. Now I can get that job.' I was so ambitious."
Iacocca's years of partnership with Henry Ford II were about to begin. In the 1960s, Iacocca would accompany the Deuce on many of his joyous sojourns to Europe, trips that were part business and part pleasure.
"In Europe he was like a king, and I followed him. He'd be up until 2 or 3 in the morning, while I wanted to go to bed. But Henry did his homework. He was the first guy to walk into the meeting the next morning. And he asked the right questions.
"He paid me a lot of money and I admired him, because whatever he took in pay and bonus, I got the same. It was never a dollar less or a dollar more. That was his way of telling me I was equal."
Lee Iacooca said of Henry Ford II, above: "His great fear was that his family was too weak to keep the company running, and therefore he diffused power."
"I told Charlie, 'If he asks me to go hunting, I'm not going to turn him down. What am I supposed to do?'"
Beacham said, "Well, be careful with your press."
In the late 1960s, Iacocca wound up on the cover of the New York Times Sunday magazine.
"It was a knockout story, and Henry had called and congratulated me on it. But a couple of these guys said, 'Yeah, that's bull-. You're getting more press than Henry Ford.' "
Franklin Murphy, the chancellor at UCLA and a Ford board member, gave Iacocca some advice.
"Frank Murphy said, 'Henry hates Asia, so do what you want there. But stay out of Europe. That's his baby.'
"I said, 'When I go to Europe, sh-, I go with him. I can't upstage Henry Ford.' "
Yet Iacocca managed to overstep his bounds.
'He got scared'
"I think Henry decided he was mortal," Iacocca said. "He had heart problems and he got scared. I think deep down he reached the point where he said, 'Son of a b--, what do I do now?' And in fact Bill Ford (William Clay Ford, Henry's brother) told me that he had gotten pretty sick."
"Then his mother died (in October 1976) and she was one of my great proponents. She called him 'Henny.' Bill Ford was also in my corner, but he wasn't strong enough and he didn't want to ever contradict Henny. Bill said, 'He turned the company around, and I have to be in his shadow.'
"I told Bill, 'Why, you're the smartest son of a b-- of all.'
"But you've got to remember Henry was going through the trauma of divorce with Christina (Vettore), the Italian girl, and he was sort of mixed up, and his great fear was that his family was too weak to keep the company running, and therefore he diffused power. He brought in McKinsey. The company spent, Christ, a lot of money on that."
At the consulting firm's recommendation, Henry created the power-sharing Office of the Chairman, which included Henry, Bill, Iacocca and eventually a newcomer to the power circle, Phil Caldwell.
"It seemed like five guys were running the company at one time," Iacocca said.
Henry had been slowly maneuvering for years, nudging Iacocca out of the picture. His very deliberateness was a sign of respect - of fear of his underling.
"I don't know what happened, to be honest," Iacocca said. "You look back and say, 'Well, God dealt you a pretty good hand.' But those days were tough. I don't like the way he did it. Every quarter he found something to change. And then Caldwell came in. For five years he kept giving the message that he wanted to make sure the power was spread. Henry was concerned that his family was so weak and I was too strong, and he wanted to decentralize."
The final meeting was on July 13, 1978, in Henry Ford II's office. It lasted 45 minutes. Bill Ford was in the room.
"He knew he had to fire me, but he just couldn't get around to doing it without Bill there," Iacocca recalled.
'It's not right'
"I said, 'Jesus Christ, it's awful. It's not fair, it's not right. And Bill starts crying. By the way, we are still good friends with Martha and Bill. They never missed a year of sending me a Christmas card. They're good people.
"But it was one of those things where Henry made up his mind, and nobody wanted to go against Henry. Henry had told Frank Murphy, 'It's either him or me,' and the board had to knuckle under.
"Well, I could understand that, but it shouldn't have gone that far. But he wanted to diffuse the power of the company.
Lee Iacocca, shown during his heyday at Ford, says now: "I wouldn't want to do it again -- put my family through it."
"And then he told me: 'You'll run over them.'
"I said, "No, Jesus, I'm a loyalist, Henry. In my 32 years with the company why would I want all that bull-? I came here as a trainee. You had confidence in me. We've had a good eight-year run as president. What the hell did I do wrong?'
" 'Well,' he said, 'Sometimes I don't like somebody.' "
That was the end of the meeting. Henry Ford II and Iacocca never spoke again, although they did cross paths.
"He saw me once. It was with Katherine Graham at a Newsweek affair. He saw me and my wife, Mary, all dressed up. Here comes Henry. He sees me. I always wondered what would happen, and guess what? I just sat there and he ran away from me. He didn't want any contact.
"Listen, I wasn't much for carrying a grudge. We had a bad moment. That's past. First of all, I don't think about the past. We did a lot of stuff. We had a lot of good days.
"I never expected to be chairman. They have a (Ford family) chairman to this day, Bill Ford Jr. I was happy. We were making close to a billion dollars a year. We made $800 million that year. My mother said, 'What would they have done to you if the company had been doing poorly?'
"I wouldn't want to do it again - put my family through it. But it came over time. It came as an insidious wind. You knew that something was up. But I was made president in 1970 and I always said, 'Well, I lasted two terms, eight years. That was a pretty good tenure to be president.' "
Lutz: Too outspoken to be CEO
Iacocca would become chairman of Chrysler Corp. Nearing retirement in 1992, Iacocca hired General Motors Europe President Robert Eaton as his designated successor - passing over his top lieutenant, Robert Lutz.
Lutz had grown older and wiser by the time Bob Eaton became his boss in 1992. At this stage of his life and career, Lutz decided to accept his fate: He would never make CEO. There was just something about him that kept the top job out of reach. He was too flamboyant, too outspoken, made too many enemies, got too much attention, stepped on too many toes. Too often he questioned the judgment of his superiors. He was his own worst enemy.
Lutz, who turned 60 in 1992, was eight years Eaton's senior. It was time to submit. "Sometimes what you want is not what you need," Lutz said.
Lutz had achieved such a uniquely powerful position as the No. 2 eminence at Chrysler that he didn't really need to be the CEO. He could all but ignore Bob Eaton and continue building Chrysler in his own image. Only now he could do it without Lee Iacocca looking over his shoulder.
Lutz already commanded the intense loyalty of his troops. He would take the company where it needed to go whether he was chief executive or not - almost as if Eaton weren't there. Anyone whose opinion he really cared about and whose support he really needed was already with him.
Steve Harris was a public relations executive who began his career at General Motors in 1972 and wound up working at American Motors Corp. in the 1980s. He was at AMC in 1987 when Chrysler bought the company from Renault. Harris promptly ascended the PR ranks at Chrysler, and became the company's top spokesman.
Waiting for the sparks
From left, Chrysler executives Robert Lutz, Robert Eaton and Thomas Denomme: Smooth surface, stormy subtext.
One of two things was expected to happen. Lutz would quit, taking hordes of loyal followers with him. Or else he would work tirelessly to undermine his new boss. Only the latter was not really Bob Lutz's style. Not that he was such a nice guy; he simply thought too much of his own abilities to believe he needed to resort to shenanigans. He always believed that his talent would win out. Infighting wasn't his way.
Harris knew enough to exploit Lutz's esprit de corps and to present the two Bobs as mutual admirers and best of friends. He all but ordered his two bosses to play along. He urged the Bobs to be cordial to one another in public and as much as humanly possible in private. As Chrysler's fortunes soared in the mid-1990s with the success of the Jeep line, the Neon subcompact and the LH, it became the triumph of "the two Bobs."
In fact, being president and COO of Chrysler under a guy like Bob Eaton turned out to be the best job Lutz ever had. If Eaton had been a dogmatic control freak who wanted to do everything himself, things wouldn't have been nearly as much fun for Lutz.
With Iacocca it was different. Lutz had profound business disagreements with Iacocca about the company's diversification strategy. Lutz felt Chrysler should focus on the automobile business. But he also knew in his heart that he had been unnecessarily provocative and at times disrespectful - and probably guilty of a cardinal sin, which was not to show solidarity with the officially appointed leader.
Lutz and Eaton appeared to have come to terms, and they set ground rules for peaceful coexistence. The word from inside the company was that Eaton had agreed to let Bob Lutz set Chrysler's product agenda and see it through. Lutz promised not to second-guess Eaton on strategic matters if he could help it. The irony was that Eaton was the true engineer and Lutz the marketing and operations man, not the other way around.
Eaton joined Chrysler with the understanding that he would become chairman when Iacocca retired at the end of 1992.
After Eaton's arrival, he and Lutz would get together about once a week for a dinner at the swank Townsend Hotel in Birmingham, Michigan, the leafy Detroit suburb. They would be seated away from prying eyes in a more or less private setting.
"We'd just chat on how the company was going and how we were planning to run it and so forth," Lutz recalled. "At the time I found myself wishing that he had said, 'Yeah, you're right, this is working pretty well, why don't you just keep looking after that and I'll do the broad, strategic things.'
"That in fact is not what he said. What he said was, 'Well, I'm a pretty hands-on guy myself. I come out of engineering. My specialty is product. I think I'm pretty damn good at product. I also believe I know a lot about manufacturing from my time reworking the manufacturing in Europe, and I would like to become quite heavily involved in all of the product and manufacturing decisions.'
"Initially I was kind of disappointed and thought to myself, 'I wonder how this is going to work.' But, you know what, after a couple of weeks, maybe months, it all just settled out. I think he got the impression that the thing had a lot of momentum and was going in the right direction. We included him as much as he wanted to be included. We'd take him on the ride-and-drives and obviously gave him frequent styling reviews, but I'd say he never tried to really directly interfere. So from that standpoint it was it was very good.
"He got into manufacturing a little more than perhaps a chairman would who has a chief operating officer underneath him. I let (Chrysler manufacturing chief) Denny Pawley deal with that. I said, 'Look Dennis, the boss likes manufacturing. He thinks he was very good at manufacturing. Just deal directly with him on manufacturing questions.' I had no problem with that at all."
Letting off steam
Indeed, the "two Bobs" seemed to get along famously. But in 1998, as Lutz neared retirement, he finally began to let off some steam.
At the right time in the right mood in the right place, he would unleash his true feelings about Eaton and his contributions to Chrysler's resurgence. So accustomed were people to the story of the "the two Bobs" that they could hardly believe their ears.
The resentment was understandable. Lutz had performed a miracle at Chrysler in the late 1980s and early 1990s - and, it could be argued, lost his last chance of becoming the CEO of an auto company because of it.
He had inherited a product-development system that was a mess in a company that could not survive without an unfailing series of product successes. He was not the only miracle worker at Chrysler in those days - not by a long shot. But he was the catalyst, and he was at the height of his powers.
Excerpted with permission from the publisher, Motorbooks International, from Six Men Who Built the Modern Auto Industry by Richard A. Johnson. Copyright 2005 by Richard A. Johnson.