Jack Bogle            Elon Musk             Lee Iacocca

 

All three gentlemen are personal heroes!

I grabbed Lee Iacocca An Autobiography paperback book from the giveaway table at my local public library. I did not intend to read the 1984 partially torn book from cover to cover until I came across this passage on page 169: “California is really the mirror into the future…California has contributed some things that we in Michigan aren’t too happy about…they have given us some supercharged emission standards that have almost transformed California itself into a foreign country.” These words meant the author and this book would be a masterpiece reflecting three principles I cherish: 1. I live and love California, 2. I bought solar panels and drive two electric cars, and 3. Many Americans and Californians, in particular, live and breathe in supporting new technologies that fight climate change. When Iacocca wrote his spot-on description of Californians owning small cars and our emission standards 45 years ago, I had to read his autobiography.

It takes a lot of guts, intelligence, foresight, and innovation from a major CEO of one of the “big three” automakers of that time to simply realize that California is on the right side of history. California and its people want to save our environment by reducing greenhouse gases and demanded that Detroit make cars that met those emission standards. He knew Detroit, and the rest of the auto industry did not! I took matters into my own hands by solar and electric car pro-environmental purchases.

What is pertinent for myself and my blog is the financial impact of solar and electric cars (click here for a previous article I wrote about my personal experience cutting my energy bill to $0.00!). Thus, I not only save a bundle of money eliminating house and transportation energy costs, but I am also proud to contribute with reducing CO² emissions, just as Iacocca said 45 years ago.

We know that Iacocca kept Chrysler Corporation from bankruptcy and saving 600,000 jobs. That itself is huge, and it was surprising news at the time! But he did a lot more. I am impressed with the author’s added accomplishments:

1. He designed and built the first major American-made fuel-efficient cars at a time in our country’s history when we desperately needed them
2. He was the first to install auto seat belts way back in 1950s
3. He was one of first to use robots on the assembly lines
4. He was the first-ever CEO of a major American corporation to invite labor representations to sit on the Chrysler Board

The author says that Europe and Japan had labor reps on their boards for years, but not here. Why? “American CEOs are prisoners of ideology,” wrote Iacocca, which view labor as the “natural, mortal enemy of managers.” I love the author’s thinking and action on inclusion. Inviting all stakeholders at the decision-making table is nothing original, but it is a rare practice in America. He believed that labor should see and understand the inner workings of the corporation! Duh? What’s the matter with that?

Turning Chrysler around was the best part of the book. In 1979, I lived right next door to a Chrysler dealership. One day this dealership had an auction to get rid of their biggest gas-guslars on the planet. I can still visualize the two-door sedans with those gigantic front doors and the longest hood to cover that gas hog engine. With gasoline prices at nosebleed levels, Chrysler couldn’t give them away! Iacocca inherited not only a failing management team but products that were not selling.

Chrysler hired Iacocca within weeks of getting fired as President of Ford Motors.  Iacocca details how he saved Chrysler by going to Congress for those loan guarantees. Just the author’s reporting of the politicking and handshaking with congressional leaders and President Carter could be a separate book! But after getting the approval of Congress, he then had to get the cooperation of:

• dozens of banks that Chrysler owed money,
• labor unions,
• the hundreds of Chrysler’s suppliers,
• thousands of shareholders who lost their dividend income temporarily
• former retired and fired auto executive friends from Ford to help redefine the old negative image of Chrysler into a new and improved corporation
• of the Chrysler dealerships

A significant part of the loan agreement is that Iacocca had to reconstruct Chrysler’s corporate culture. And he had to convince everyone that Chrysler is a new corporation that will have to design, build and successfully sell new fuel-efficient autos!

Oh my God! Historically, according to the major car companies, Americans did not buy fuel-efficient cars. But that was before the energy crisis when gasoline was 20 cents a gallon. Can you imagine the incredible pressure Iacocca endured? Iacocca marvelous talents on balancing being tough and diplomatic, and open or closed to compromises with all stakeholders, would get Mother Terresa’s attention.

He also had this strange corporate philosophy of thinking about the consumer’s interests first. Iacocca said that most CEOs of the major corporations are “never interested in long-term planning only want their quarterly results and their bonuses.” Jack Bogle did the same when he was the CEO of Vanguard, always thought about the ordinary investor and their long-term plans. Iacocca and Bogle have a lot in common; they both despised bonuses and looked out for their prospective customers’ best interest.

Iacocca warned readers about greed. According to him, greed is the worse of the seven deadly sins. Unfortunately, his warning was never taken seriously by corporate America. The 21st century CEOs and Wall Street’s greed are now accepted by the corporate media, and our economic and political systems.

Additional tidbits I found mesmerizing because Iacocca practiced it:

• Took a $1.00 salary while at Chrysler as a role model to get the cooperation needed by all Chrysler employee and management stakeholders.
• He dealt with the unions in a reasonable and fair way, and as a result, about 17% of the company is owned by the union members during his tenor as CEO.
• A sense of humor. In 1984, Iacocca was asked if he considered running for president as millions of Americans knew him from his TV commercials. He responded: “everybody knows that being an actor doesn’t qualify you to be president!”
• Don Regan, the Reagan administration’s Secretary of the Treasurer, was so hostile towards the loan guaranteed deal approved by the previous Carter administration that the Secretary demanded that the Chrysler stock shares, which were part of the loan deal, be sold at auction. Iacocca reported that Regan’s Wall Street pals cashed in on the enormous and lucrative fees from the $200 million stock sale. Iacocca suggested that the government could use that money to retrain laid-off auto workers (OBVIOUSLY, that suggestion went NOWHERE!).
• Seat Belts: Iacocca believed that there are areas of life where the government has a role requiring safety policies. Nothing wrong with protecting people from unnecessary auto accident injuries. However, once again, the entire auto industry and many American car lovers were against requiring seat belts. Only in America do we allow ideology to interfere with safety (The states did pass seat belt laws by the early 1990s, thanks to Iacocca’s foresight on safety).
• I am confident investment giant Jack Bogle loved Iacocca’s futuristic thinking which extended into our nation’s financial system too. Iacocca praised President Roosevelt’s creation of the Securities and Exchange Commission (SEC) and Federal Deposit Insurance Corporation (FDIC) to protect people when the financial industry goes haywire. The author wrote, “FDR was 50 years ahead of his time.”
• Trade deals: Iacocca talked about what we could learn from Japan about not allowing countries to take advantage of our trade deals. He wrote: “We are the only country practicing free trade and are “getting clobbered” by it.” I think Iacocca may be on to something as the current administration feels the same way, that our free trade deals hurt America.
• Despite his heavy and stressful workload, he made time for his family.

Vanguard founder and famous investor, Jack Bogle and Telsa car maker, Elon Musk

Iacocca’s futuristic thinking throughout the book reminds me of two other personal heroes of mine—Tesla’s CEO Elon Musk and as previously mentioned, the late super-star investor and founder of Vanguard, Jack Bogle. I own a Tesla Model S because of the vision and thinking of its current 21st-century auto CEO, Elon Musk. I have my retirement nest egg in Vanguard with another former visionary–the late Jack Bogle. Lee Iacocca is the Elon Musk and Jack Bogle of the 1970s and 1980s.

Iacocca is an immensely successful son of Italian immigrants, business leader, straight shooter, CEO of two major corporations, survivalist, pragmatic futurist, tough but not belligerent, and an American legend, but his passion and compassion for all people are his greatest successes. Along with Bogle and Musk, I proudly add Iacocca as another personal hero.