Iacocca Firing Linked to Feud With Officials : Car Maker Expresses Shock, Calls Dismissal Almost ‘Un-American’

Chrysler Chairman Lee A. Iacocca’s surprise ouster as head of a Statue of Liberty advisory commission culminated a long-simmering feud with federal officials over his handling of the restoration project and reflected White House Chief of Staff Donald T. Regan’s strong distaste for him, government and private officials said Thursday.

The popular Iacocca, lashing out in fury at his removal Wednesday by Interior Secretary Donald P. Hodel, blasted the action as bordering on “un-American” and said it will harm the restoration project. After declaring himself “shocked,” he described Hodel’s telegram notifying him of his removal as “a drop-dead wire.”

‘I Don’t Get Hurt’

“It’s too bad the secretary of Interior chose to do it this way,” Iacocca said. “In the end, the statue, a beautiful project like this, gets hurt. I don’t get hurt. Not me; from day one, it was and is a labor of love. I did this for my mother and dad.”

Iacocca, the son of Italian immigrants who passed through Ellis Island, attributed his removal to his opposition to an Interior-supported plan to build a luxury conference center and hotel on Ellis Island.

When asked at a press conference in Highland Park, Mich., about Regan’s known dislike of him, Iacocca said he has “no animosity, no bad blood” toward the White House official.

“I’m no threat,” said Iacocca, whose name has been bandied about as a possible Democratic candidate for President. “I’m not running for anything except my life. If it was just politics, boys will be boys down there. They get nervous, and an election is coming up and that’s the game they play in Washington.”

White House spokesman Larry Speakes, briefing reporters in Santa Barbara, Calif., where President Reagan is vacationing, said that a potential Iacocca candidacy had nothing to do with his firing. Speakes added that Regan, who normally plays a role in high-level departures, was vacationing in Florida when the ax fell and “had nothing to do with it.”

But he acknowledged that Regan had known of the dispute for several days and did not try to talk Hodel into another course of action. Regan previously had clashed with Iacocca over the disposition of stock warrants held by the government as a result of the government’s financial rescue of Chrysler Corp. in 1979, and Iacocca wrote in his autobiography that Regan “kept me twisting slowly in the wind.”

Dual Chairmanships

Hodel, in an interview, steadfastly maintained that he removed Iacocca because he believed that the auto executive faced a potential conflict of interest as chairman of both the commission, which advises Hodel on restoration plans, and of a private fund-raising foundation that hires the contractors that do the work. Hodel said he does not have a preference among the various proposals for the restoration of Ellis Island.

National Park Service employees privately rejoiced at the decision of their boss to fire Iacocca. They had chafed under Iacocca’s suggestion that the Statue of Liberty had not been well maintained--a responsibility of the Park Service--and complained that he tried to “run roughshod” over them.

“He was used to being in command and he was never able to cope with the idea that he is an adviser,” said a park official who asked not to be identified. “Basically, you’ve got a man who is a powerful and influential figure who has ready access to any number of Administration and congressional officials, not to mention corporate leaders. So he can swing a lot of clout.”

Would Raze Buildings

The Park Service, which runs Ellis Island as a national monument, disagrees with Iacocca’s proposal for refurbishment. The official said that the service supports the conference center as a way to make the island financially self-sufficient and opposes elements of an Iacocca-backed plan for the razing of minor buildings and the sale of ethnic foods and crafts.

The official said that Park Service employees were “very unhappy” about the use of the statue’s torch in the 1985 Rose Bowl Parade. “Our folks didn’t like the idea of having such a remarkable historic artifact hauled around the country in the first place,” he said, “and they certainly didn’t like the fact that we had no choice but to provide several of our people as a living escort for the torch.”

The torch suffered minor damage in the trip, the park official said. “We’ve been unhappy about the commercialization of the torch,” he said. “Last year, they took it to a race track in New York” for display and fund-raising.

Hodel said he was not aware of anti-Iacocca sentiment in the Park Service, which is part of the Interior Department. He said also that he had not been aware of Regan’s dislike of Iacocca, even though his undersecretary, Ann Dore McLaughlin, previously had served as assistant Treasury secretary for public affairs when Regan was Treasury secretary.

Firing Called ‘Dumb’

The firing of the popular, earthy auto executive was widely viewed as politically unwise. An adviser to President Reagan called it “dumb.” A spokesman for House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) called it part of a systematic effort by the Administration to try to discredit potential Democratic presidential nominees.

“Politically, it’s got the fingerprints of the White House all over it,” said the spokesman, Christopher Matthews. “This is not a question of James Watt zapping the Beach Boys. This is a question of a very popular figure being challenged and embarrassed by the Administration.”

Hodel announced his decision to fire Iacocca at an unscheduled press gathering in his office Tuesday evening. He said that the issue of a potential conflict of interest was raised in telegrams by an attorney for the foundation to two members who sat on the commission also. The telegrams said that Iacocca wanted no “crossover” and that they should resign one of their posts.

Hodel said he decided that Iacocca was correct and asked him to resign his chairmanship. Iacocca said Thursday, however, that he had not seen or signed the telegram sent by the attorney. He said he wanted the two to resign one of their posts because they were not “pulling their weight.”

Telegram Seen as Excuse

Iacocca dismissed the telegram as an excuse to get rid of him. He said that he will continue, as the foundation chairman, to oppose a restoration plan, favored by the Interior Department, that he said calls for developing two-thirds of Ellis Island into the conference center and hotel complex through tax shelters sold to the wealthy.

“How that money is spent is far more important than how it was raised . . . “ he said. “I will do everything in my power to ensure that those funds are spent to restore these two national shrines.”

Chrysler Corp. officers reported that they had received hundreds of phone calls of support for Iacocca. But Iacocca said he does not plan to fight back because he does not want a lingering feud to spoil plans for the Fourth of July celebration for the Statue of Liberty restoration.

His displeasure, however, was clear.

“Hodel’s action borders on being un-American,” he said. “I do not appreciate being disenfranchised on somebody’s whim.”’

Maura Dolan reported from Washington and James Risen reported from Highland Park, Mich. Staff Writer Eleanor Clift also contributed from Santa Barbara.