Who Will Succeed Iacocca? : Chrysler's Board Is Split Over Whether an Outsider Should Get CEO Post


It seemed inevitable that Lee A. Iacocca would not leave Chrysler Corp. in an orderly fashion, and now evidence of a boardroom quarrel over who will succeed him as chief executive is spilling awkwardly into the open.

Members of Chrysler's board are reportedly to meet in New York over the weekend in hopes of hastening the selection of a successor. The 68-year-old Iacocca has said he will retire as chief executive at the end of this year.

Speculation has centered on various combinations of the three top posts at the company: chairman, chief executive and president. It is unclear whether Iacocca will remain as chairman.

People close to Chrysler say Iacocca is attempting to install outsiders atop the auto maker and cut out his current president, Robert A. Lutz. But key shareholders and some board members are backing Lutz.

Iacocca's apparent opposition to the respected, strong-willed Lutz has dragged out the selection process, created uncertainty throughout the company and has provoked criticism from shareholders and other top executives.

One former candidate for one of the top jobs, Chrysler Vice Chairman Robert S. Miller, left the company this month to become an investment banker after writing a memo said to have criticized Iacocca's lack of plans for a successor.

Soon after, John Neff, who runs the Windsor Fund Inc., one of Chrysler's largest shareholders, publicly called on Chrysler to quickly anoint Lutz to clear up the uncertainty and avoid disruption at the company.

"There's obviously a battle going on," one Lutz backer said Friday. "I wish to hell the board would just take over. When Iacocca finally leaves, they're going to say, 'Thank God.' "

Chrysler officials wouldn't confirm or deny plans for a special board meeting, while others said the board's three-man nominating committee planned to convene, perhaps by phone. One published report said the panel would meet in New York with the latest candidate whose name has surfaced publicly.

He is General Motors executive Robert J. Eaton, 52, president of GM's highly profitable European operations. Eaton confirmed to the New York Times this week that he has discussed a job with Iacocca and would consider an offer.

The Zurich, Switzerland-based Eaton was in Hungary on Friday to preside over the opening of a GM plant. In Detroit, GM officials said they had no information on any other travel plans. GM also declined comment on the reported wooing of Eaton.

Eaton is the latest of several outsiders approached about a post-Iacocca job at Chrysler, any of whom would probably block Lutz's path and trigger his departure from the company.

The charge against Lutz is that he is mainly a car buff and has too prickly a personality for the top job. But backers contend that he is well suited to Chrysler's only plausible long-term role in the auto industry, as a small producer of hot cars and trucks.

The uneasy relationship between the two brash executives--said to have resulted in loud public arguments--recalls Ford Motor Co. Chairman Henry Ford II's distaste for his then-president, Iacocca, that led to Iacocca's 1978 firing as Ford prepared for his own retirement.

A former Chrysler officer described two possible scenarios at Chrysler:

* Lutz, a Swiss-born onetime GM, BMW and Ford executive--a dashing auto enthusiast, pilot and cigar fancier who also was once considered a candidate for Ford's presidency--would become chief executive and perhaps chairman. Jerome York, recently promoted to chief financial officer in place of the departed Miller, would become president.

* Gerald C. Greenwald, Iacocca's heir-apparent until May, 1990, when he left to lead the aborted union buyout of UAL Corp., would return as chairman or chief executive. Now at Dillon, Read & Co. investment house in New York, he is a finance man who would be complemented by GM's Eaton, an engineer, as president.

The big unknown remains Iacocca's own plans. He has said only that he will retire as CEO, raising the prospect that he would remain as chairman and cast a big shadow over his successors. That likelihood is apparently what soured another candidate, racing mogul and businessman Roger Penske Sr.

Others whose names have come up in the Chrysler succession derby include William Hoglund, a top GM executive now in charge of the company's huge components operation, and Alexander Trotman, Ford Motor Co.'s chief of North American cars and trucks, a onetime chief of staff for Iacocca at Ford.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World