As Other Executives Leave, Iacocca Decides to Stay On
Chrysler Chairman Lee A. Iacocca said Thursday that he will remain head of the nation’s third-largest auto maker after his contract expires in December, 1991.
The announcement comes a week after his heir-apparent, Gerald Greenwald, resigned to head the employee group bidding for the parent of United Airlines. Greenwald’s departure and the resignation of other top Chrysler officials last month for various reasons left many unsettled questions about the auto maker.
“He made that statement to calm the concerns of both the people inside the company and those on the outside,” said auto industry analyst Raymond J. Mucci at Baird, Patrick & Co.
Iacocca, 65, announced his decision after meeting with the nominating committee of Chrysler’s board. A Chrysler spokesman said Iacocca will remain with the company for an undetermined length of time after December, 1991.
“We have an outstanding management team at Chrysler,” Iacocca said in a statement. “One of my primary responsibilities is to put an orderly succession plan in place. We’re going to do that according to our own timetable, and it won’t be driven by a big X on a calendar.”
While credited with Chrysler’s dramatic turnaround in the early 1980s, Iacocca has been accused of neglecting the auto maker in the mid- and late 1980s while writing and promoting best-selling books and heading the effort to restore the Statue of Liberty.
Iacocca, who joined Chrysler in 1979 after the late Henry Ford II fired him as president of Ford Motor Co., had hinted in recent weeks that he might change his mind about stepping down in 1991.
“I’m not going to tell you exactly what I’m going to do because I haven’t made up my mind yet,” Iacocca said in response to a stockholder’s question at the company’s annual meeting in Universal City last month.
Industry officials and analysts said it was Iacocca’s indecision that triggered Greenwald’s departure. In addition to Greenwald, Chrysler’s vice president of international operations, Michael Hammes, quit to join Black & Decker, and Treasurer Fred Zuckerman said he planned to leave this summer.
Shortly after Greenwald’s resignation, Chrysler promoted Chief Financial Officer Steve Miller, 48, to vice chairman and, as a result, Miller became a serious contender to succeed Iacocca.
Another leading candidate for Iacocca’s job is Robert Lutz, 58, who heads the Chrysler Motors division and who assumed some of Greenwald’s responsibilities. As was Miller, Lutz was an Iacocca recruit from Ford.
Iacocca and his newly empowered lieutenants face numerous challenges. Chrysler saw profit for the first three months of 1990 dive 80% from the same period last year. Sales have fallen 13% in the first five months of this year.
In addition, Chrysler must replace its aging line of K-cars, whose strong sales record helped restore the company’s financial health, said Mucci. “The major challenge is the expiration of the K-car,” he said.
