Iacocca's Tightrope Act

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miserable state of affairs in part on past failures by the U.S. industry's leaders, including himself, and with characteristic brashness he predicts that Chrysler, though possibly not its U.S. competitors, will conquer. He proclaims, "I was arrogant, but GM made a science of goddam arrogance. I think the Townsends of this world,*the Henry Ford Us and some of the GM chairmen wrecked this industry. That arrogance should be gone now. We got our comeuppance. If GM and Ford keep thinking that way, we'll run over them. If they had been on the ball, I don't think we'd have made it. So who wants to wake them up?"

Although lacocca's company is only one-sixth the size of GM in terms of revenue and less than a third as big as Ford, that kind of talk has made him easily the auto industry's best-known figure. A Gallup poll of heads of small-and medium-size businesses earlier this year found lacocca the U.S. business executive they respected most. He got 27 times the number of votes of the runner-up, Frank Gary, who retired last month as chairman of International Business Machines Corp.

A few red-white-and-blue bumper stickers have even sprouted declaring IACOCCA FOR PRESIDENT. Preposterous? Yes, preposterous. lacocca greatly enjoys the sound of his own voice and often pontificates on political and economic matters, especially as they affect Chrysler. But friends say he does not have the patience for politics, and he concurs. "I'm not interested," he says, and then, as if to explain how the stories start: "If you only talk cars, people say you're a provincial son of a bitch. If you're outspoken, then they say you are running for office." Quips Publisher Keith Crane of Automotive News: "Hell, Lee doesn't want to be President; he wants to be appointed Pope."

It is easy to dismiss lacocca as just another supersalesman because he is so good at it. He exudes confidence and conviction: well-tailored clothes, big cigar, self-satisfied smile. But lacocca has proved he is a remarkable manager as well. He has a knack for getting the most out of people, for making them do more than they think they can. Says St. Louis Plant Manager John Burkart: "All of us at Chrysler believe in the man. I worship the guy." Vince Williams, a Portland, Ore., auto salesman, says he decided to open a Dodge dealership rather than a Pontiac outlet just because of lacocca.

The boss is by turns charming and demanding. Extremely demanding. His edict to top managers: "I don't need a $100 million mistake. Try to make it a $5 million mistake if you have to make one." Investment Banker Felix Rohatyn, who helped rescue New York City from insolvency in 1975, sums it up: "Lee is a man who can instill leadership in a crisis. He knows his business from front bumpers to back ends. He is the right man at the right time."

Keeping Chrysler alive has been a wrenching process. lacocca has effectively cut the company almost in half. Of its 52 plants, he has closed 16. Overseas operations and unrelated businesses were auctioned off to raise cash. Five years ago, Chrysler had 157,000 employees; today there are 74,700. In the past three years its costs for wages and salaries have been slashed from $2.1 billion to $1.5 billion. Once the world's sixth largest automaker, Chrysler now ranks twelfth.*In