Iacocca to Hold Chrysler’s Reins Until End of ’92
Lee A. Iacocca answered one of the corporate world’s hotter questions Thursday by announcing that he will stay at the helm of Chrysler Corp. until the end of 1992, or longer than some expected.
That will make him 68 and, by some reckonings, send him out a hero once again--especially if two pivotal new models timed to debut next year to exploit the expected economic recovery are hits.
The decision removes a major uncertainty about Chrysler’s future that has led to the departure of key executives, including heir-apparent Gerald Greenwald.
But it will also intensify the speculation about who will be named to fill Iacocca’s ample-sized boots.
The struggling auto firm has already begun looking outside the company for a successor. Among insiders, the top candidate appears to be President Robert A. Lutz, 59, and finance man Robert S. Miller, vice chairman. Both are former Ford Motor Co. executives like Iacocca.
Speculation has also touched on everyone from William Hoglund, a top General Motors executive, to retired war hero Gen. H. Norman Schwartzkopf.
“I don’t think there’s a logical successor inside the company, at least not in Iacocca’s eyes,” said DeWitt Bowman, chief investment officer at the California Public Employes Retirement System, owner of about 15 million Chrysler shares.
In a brief statement after a regular board meeting at Chrysler’s Highland Park headquarters, the company said Iacocca had agreed with the board’s request that he “remain in his present position until Dec. 31, 1992, at which time he plans to step down.”
“The board has already begun discussions on the selection of a successor,” Chrysler said.
Company spokesmen said they didn’t know whether Iacocca plans to relinquish both his positions, board chairman and chief executive. He could continue to dominate the company by remaining as chairman.
However, he has said repeatedly that he wants to retire.
Chrysler’s latest woes have tarnished Iacocca’s reputation somewhat, but his status as one of the automobile industry’s legendary figures--as father of Ford’s 1964 Mustang and architect of Chrysler’s successful government bailout in the 1970s--seems secure.
Chrysler’s fortunes have sunk badly in the past year, its weakness blamed not only on the recession but on Iacocca’s admitted miscues that diverted hundreds of millions of dollars to acquisitions and other ventures at the expense of new-vehicle development. Two critical errors--delays in developing new Jeeps and mid-size autos, causing major inroads by competitors--will be remedied in early 1992 with a new Jeep Cherokee and next summer with a much praised new line of sedans code named LH.
By staying on, Iacocca will also oversee an upcoming $400-million public stock offering and difficult negotiations on Mitsubishi Motors’ proposed buyout of the two firms’ joint-venture auto factory in Illinois. He will also get a hefty financial gain promised by the board if he stayed beyond this year.
