Business: Chrysler Gets Some Firepower

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Feisty Lee Iacocca is back at the wheel again ft

"Johnny called me and said, 'Why don't you come over and give me a hand?' " So said former Ford President Lee Iacocca last week, talking about how he had just made one of the most spectacular moves in Detroit's long history of high-level executive swapping. Iacocca was appearing at a press conference in the Highland Park, Mich., headquarters of his new employer with his new boss, Chrysler Chairman John J. Riccardo, whom almost no one ever calls Johnny. But Riccardo did not seem to mind the unaccustomed familiarity. Speaking of the man just named by Chrysler's board as the troubled company's new president, Riccardo beamed and said he was "personally, extremely pleased."

So, clearly, was Iacocca. "I really didn't want to retire at 54," he said. "I really didn't want to be banished from the auto scene."

Iacocca's return was almost as startling as his departure. Only last July, one of Detroit's sharpest marketing men was abruptly ousted after 32 years at Ford, the last eight years as president. The precise reasons for Iacocca's downfall are still unclear, but at least one of the causes was a clash of wills with Chairman Henry Ford II. After his firing formally took effect in mid-October, Iacocca was relegated to a drab, linoleum-floored office in a spare-parts warehouse near Ford's headquarters in Dearborn, Mich.

Ford executives say that Iacocca's new job "came as a surprise." Only 24 hours before, Ford had announced a severance agreement with Iacocca that granted him a termination payment of $400,000 plus a separation payment of $275,000; he also stood to get $1.1 million in additional payments, on condition he did not go to another auto company. No one at Chrysler would say what Iacocca would be paid now, but almost certainly he is not going to miss his forfeited Ford pay very much. According to some reports, he was guaranteed a salary package totaling more than $1 million over an unspecified term, as well as an option to buy up to 400,000 shares of Chrysler common, now selling at $11.25 a share.

Iacocca insisted on being given a free hand in running Chrysler's day-to-day affairs, and evidently he will get it. President Eugene Cafiero, who at 52 is only two years younger than Riccardo and was not a strong candidate to succeed him, was made vice chairman and given vaguely defined duties involving planning. Riccardo announced that he will turn over his job as chief executive officer to Iacocca next year and devote most of his energies to Government relations and Chrysler's finances, which he says already occupy "almost 100%" of his time.