Automobiles: Jockeying for Position

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For more than a decade now, Lee Iacocca has been synonymous with Chrysler Corp. -- for good and for ill. Almost singlehandedly he persuaded Congress in 1979 to bail out the ailing car company with a $1.5 billion loan guarantee, then paid back the money seven years ahead of schedule. After two best-selling autobiographies and 11 years of hawking his cars on TV, he became a household fixture.

Back at the Highland Park, Mich., headquarters of America's third largest automaker, platoons of loyal lieutenants toiled in his broad shadow, the best of them hoping to inherit the Chrysler crown one day. Yet, as the years passed, Iacocca led an elaborate executive-suite game of musical chairs. Somehow, every time the music stopped, Lee was still in the chair -- and eventually no fewer than five leading contenders for his job were left standing idly on the sidelines.

So it seemed like deja vu all over again when Chrysler's beleaguered directors last week plucked Robert Eaton, 52, from his post as president of General Motors' profitable European business to become Iacocca's latest heir apparent. No sooner had Eaton arrived than insiders began to speculate privately about his departure. "Eaton's biggest problem is that he's probably a nice guy, and nice guys won't last long," predicted a senior executive. "Lee will kill him."

But the time for a smooth transition to the post-Iacocca era may finally have come. Chrysler directors chose Eaton during a 12-hour weekend showdown in which they apparently called the chairman on his two-year-old promise to step down. The compromise deal, which muscled aside Chrysler's respected president, Robert Lutz, brought Eaton into the company as vice chairman and chief operating officer. If all goes as planned, he will succeed Iacocca as chairman and chief executive when the latter retires Dec. 31. Iacocca, who had sought to stay on as chairman past that date, will take the lesser but still influential post of chairman of the executive committee.

Despite plentiful skepticism within the company, Iacocca and Eaton downplayed any talk of possible friction. "I'm going to be the public-policy guy," says Iacocca. "He's coming back to the U.S. after a four-year absence when the culture has changed. I don't play elder statesman, but he needs my guidance for a while. He understands that. There's plenty of responsibility to go around." Concurs Eaton, who pulled into Chrysler headquarters in a new Jeep Grand Cherokee at 7:45 a.m. last Friday for his first full day on the job: "If there weren't any personal chemistry between us, I wouldn't be sitting here right now."

But the protean treatment by Iacocca of his own proteges hardly inspires confidence that the road will be smooth. The consummate car guy has repeatedly extended and withdrawn his favor since 1978, when he arrived at Chrysler from Ford following his own bitter ouster by Henry Ford II. The first heir apparent was Harold Sperlich, who preceded Iacocca from Ford and developed the K-car line of compact autos that kept Chrysler alive in the early 1980s. Then came financial wizard Gerald Greenwald, also from Ford, in 1979. As Sperlich faded, Greenwald rose to become vice chairman. Just as he was approaching the throne, however, Iacocca plucked another Ford star in 1986, when he hired Lutz as executive vice president.