Raised in Nick Iacocca’s house, an immigrant’s home, he absorbed his father’s odd mixture of love of America and suspicion of those who ran it, a suspicion that never left either father or son. He never voiced it except in the company of other non-Protestants who he was certain had experienced prejudice themselves. But from the beginning, Nick and Antoinette Iacocca meant to Americanize their son. Though the family was Italian and proud of it, Lee did not speak Italian because his parents did not want him to learn it. He was going to succeed in the new world, not the old one. He was exceptionally close to his father. Anyone who was Lee’s friend was Nick Iacocca’s friend too. When Lee was named president of Ford, Nick was at the ceremony, and it was a victory for Nick as well, a vast personal victory over prejudice. Nick believed that the world out there was controlled by Protestants, that as a matter of course they condescended to Italians, and that one could not get a fair break from them. Do not trust that world, he often counseled his son. Work for yourself, do not work for anyone else.
Nick Iacocca, from San Marco near Naples, exuberant and energetic, had largely followed his own counsel; in Allentown, Pennsylvania, he launched a series of businesses for himself. He ran hotdog restaurants, founded a car-rental company (some said it was the first of its kind in America), and branched off into real estate. He did very well in real estate, but when he was completely wiped out in the 1929 crash, he did not bemoan his luck; instead he started off again where he began—with a restaurant. Soon he was doing well enough to buy real estate, including two movie theaters and a large subdivision. He made money, and his son’s childhood was privileged. Lee was the younger of two children and the only boy, and the sun in that home revolved around him. As close as he was to his father, it was his mother, Antoinette, also an immigrant, daughter of the shoemaker in Nick’s hometown, whom his friends thought he truly resembled. Nick was full of energy and enthusiasm and emotion, but it was Antoinette, cooler, stronger, more controlled, always there to put the pieces back together, who watched everyone in the room warily. It was Nick’s qualities, friends thought, that had gotten Lee started in the early years of Ford, but it was Antoinette’s discipline that had carried him to the company’s highest levels.
Lee Iacocca listened to almost everything his father told him, but he violated that first canon; he intended from the time he went to college at Lehigh to be an engineer and work for Ford. It was a choice filled with risk, for even as some prejudices were lessening in postwar America, those against Jews, for example, bias against Italians persisted. They could be singers, entertainers, and athletes (particularly baseball players), and they could be in the construction business. Or the mob. They had not been as successful as the Jews in the arts or in the media or in business. The way to true American acceptance had somehow seemed harder for the Italians. As an aspiring management trainee at Ford, Lee Iacocca knew he was in for a long, lonely struggle. He had always been aware of the prejudice around him. He believed he could trust fewer people, and that he somehow had to work harder, achieve more, and be more successful, than his fellow executive hopefuls. He was marked as different. Years later, when he had risen to the upper echelon at Ford and his relations with Henry Ford were at their best, it was still there. “I’d like you to meet my young Italian friend,” Ford once said in introducing him to others. There it was, however well intentioned, my young Italian friend.
The loneliness and wariness persisted as long as he was at Ford. No matter how he triumphed, he was triumphing in the enemy camp. Partly as a defense mechanism he formed his own clique at Ford. Yet even among those he was close to, he would seldom let himself go and confess his true feelings. His friends were obliged to see him as he wanted to be seen, not necessarily as he was. On rare occasions his anger against the governing world, the world that set the rules, would show, and he would rage against the goddam Wasps who always took care of each other and who were never allowed to fail. Once in a meeting with some of his Ford people he mentioned hiring a particular advertising firm. One of the other executives questioned him closely, pointing out that the agency in question was a Jewish firm. Did they really want to hire a Jewish firm? the executive asked. “Listen,” Iacocca snapped back, “I’d rather have one smart Jew working for me than a roomful of dumb bastards like you.” But mostly his animus manifested itself in his singularity of purpose; he had come this far and would not be turned aside. He would outdo them all. He would know as much about Wall Street and banking as the financial people, as much about engineering as the engineers, as much about schedules as the manufacturing people. There would be no aspect of the business he would not master. More was always at stake with him than with others, and everything that happened was always more personalized. Each victory was sweeter because it was a victory for both himself and Nick Iacocca over a system he never trusted, and each defeat was more bitter.
But his success stemmed not from drive alone. He had almost perfect instincts for the market. That was at the core of his political strength within the company. The dealers loved him; he knew them, understood their taste, and did not look down on them as so many of the company’s rising executives now did. In turn they remained remarkably loyal to him. (When he met his eventual fate at Ford, there was more than mere grumbling; there was talk of a dealer revolt.) He was, they thought, the highest-placed man in the company who still spoke their language. No one else in the upper echelons wanted to have very much to do with them, indeed even liked to acknowledge their existence. They were, after all, usually louder and brassier than the poised young Ford executives; their self-conscious good fellowship was jarring, they dressed in flashier clothes, and they wore their materialism too blatantly. The new elite of the Ford Motor Company knew how to signal its affluence discreetly; their Ivy League suits murmured success. The dealers were different. If they were successful, they wanted to shout it.
Iacocca drew strength from them, for they remained a power in the company. Most people outside the industry and a good many new Ford executives assumed that the company sold its cars to customers; in reality it sold them to dealers. The older generation of executives, the men who had run the company until the fifties, were at ease with the dealers, for these executives were rough men with few illusions about the purpose of the business. If the dealers were out there squeezing customers by selling them unnecessary options, that was just part of the game. The business-school graduates now coming to dominate the company were far less comfortable with the dealers, for the dealers were a reminder of the essential coarseness of the business itself: They were supposed to be selling something, and it often had to be done in primitive ways. The finance people didn’t complain when the benefits of all that huckstering showed up on the bottom line; they just didn’t want to be around it.
Bob McNamara, who had never been very much at ease in the auto business, hated doing business with the dealers. He considered them unseemly hucksters, and about the last thing he liked doing was assembling them every year to give them a pep talk about going out there and selling more for the greater glory of the Ford Motor Company. Early on, McNamara had spotted Iacocca as someone who was smart enough for him to talk to yet capable of handling the dealers for him. So McNamara expedited Iacocca’s rise. Each time Iacocca dealt successfully with the dealers was one less time that McNamara had to do it. Iacocca was delighted by the early help he got from McNamara. He saw McNamara as a conflicted man, torn between his need to show an ever greater profit and his private preference for small, utilitarian cars. But if Iacocca felt sympathy for McNamara, he felt nothing but resentment toward his professional progeny, the bright young men who came after him, all those careful achievers who had been to the right colleges and then the right business schools and had had their career paths greased for them. All they really had to do, he thought, was keep their noses clean and not fail. Someone was always looking out for them. No one, Lee Iacocca was convinced, had ever been looking out for him except his family. He had gone to Ford after four years at Lehigh
and graduate work at Princeton, entering the company as a $185-a-month trainee. He spent a year as a trainee, and when it was done he did not get the job in sales that he coveted. Instead he was sent to a minor plant, making automatic transmissions, in Edgewater, Pennsylvania. He wanted out immediately and tried again to get into sales. He applied for a job as a salesman in the New York office and thought he was well qualified for it, but the manager, Nelson Bowe, turned him down. Defeats of any kind rankled with Iacocca, and this one, coming at the beginning of his career, was especially painful, seen as perhaps a reflection of prejudice. More than thirty years later, when Cal Beauregard, one of his friends at Ford, mentioned casually that he had been hired by Bowe, Iacocca was stunned. Bowe had hired Beauregard but not Iacocca! How could that be? All that day Iacocca kept coming back to the subject of Bowe and of why Bowe had not hired him. Finally Beauregard said: “It was because you’d been to college. He thought you were overqualified, and he didn’t want to deal with someone who had a college education—he just didn’t want the problems.”
Iacocca did land a low-level sales job working out of Ford’s Chester, Pennsylvania, office. There he came under the aegis of Charley Beacham, the Eastern district sales manager. If McNamara and the Whiz Kids represented the company as they thought it should be, Charley Beacham represented the company as it really was. (Years later, after McNamara had gone to the Defense Department and was trying to cut back the National Guard system, Beacham was immediately doubtful. “I think Bob will lose this one,” he told friends. “I don’t think he knows enough about those small towns, and how they like having their parades on July Fourth, and how the governors of the states like to review the Guard like they were the damn President of the United States. No, I think I’d lay off this one—I think Bob will lose.” He was, of course, quite right.) The world of McNamara and his successors at Ford was a spare, ascetic place where rational people did rational things and numbers always came true, and where ambition was about achievement and not about greed. Beacham’s world was a meaner place, where everyone had an angle and wanted a slice of what his neighbors had. The key to understanding human behavior was not rationality but a knowledge of human desire and snobbery. It was still a world where men bought cars because they wanted something—to impress their neighbors or a certain girl.
Charley Beacham became Lee Iacocca’s foster father within the company. On the exterior Charles Rufus Beacham was a vintage good old boy, a back-slapping buddy with a cornpone style who could also, when he chose, quote Shakespeare. He always had a cigar in his mouth, but he would never smoke it; smoking cigars wasn’t good for him, so he ate them instead, chewing them down to the stub. He got on with everybody, had a joke for all occasions but particularly those where there were no women present. But underneath all that Southern con there was a hard man with a hard eye. He never forgot that the good humor and the good nature were not ends in themselves but means to an end, pushing cars on customers, some of whom needed the cars and some of whom did not. The question of whether the sales benefited the customer did not arise; the only question was whether it benefited the dealer. That meant pushing the salesmen, keeping their feet to the fire, so they in turn would push the cars on the customers.
By the fifties he had become a character out of American folklore in a company filled with smooth, educated overachievers. He filled the young men around him with Beacham’s rules. They did not, he said, have to answer most of their mail from Detroit. Ninety percent of it was make-work, and on the rare serious query, someone from Detroit would follow up. If they were caught in a conversation from which they wanted to escape, he advised, the time to hang up was when they themselves were speaking; it was the safe way to do it—no one would believe they had hung up on themselves. Always go to the bathroom before any Glass House meeting, he counseled, whether there was a need or not. “Those meetings,” he said, “go on forever, and just when you do have to go, they’ll slip something by you.” In a meeting Beacham might scribble a note to an aide: “Notice he’s talking much louder,” it might say, “a sure sign his facts are weak.” He maintained that little of what was called progress was in fact an improvement on man’s condition. As an example, he cited the boom in outdoor home barbecuing. “When I was a boy, we went to the bathroom outdoors and cooked indoors, and now that I’m a grown man we’ve reversed it, and that’s called progress.” He bemoaned the coming of jet travel, which as far as he was concerned encouraged Detroit’s ambitious young men to visit his premises and interrupt the natural conduct of business. “Your only job for the next two days,” he would tell his deputy, Matt McLaughlin, of a visiting VIP, “is to make sure that he does not miss his plane leaving here.”
He was a boomer from the days when American business still belonged to boomers. With the growth of television, that would change, and most of the real selling would be done on TV, and because TV was a hot medium, the selling would have to be cooler. Beacham’s approach was more elemental. He knew how to excite his salesmen, for this was crucial. His counterpart at Chevy, a man named Bill Holler, had once gathered all of his regional salesmen around a brand-new model, opened the door, looked at them all long and solemnly, and then slammed the door as hard as he could. “Boys,” he announced, “I’ve just slammed the door on the best goddam car in the world”—and a huge cheer went up. Beacham was much the same way. Once he called in his men to fire them up about what he believed was a relatively weak model, and he did it with great cunning, cajoling them until he could see the enthusiasm in their faces. He walked out of the room, turned to a friend, and said, “I don’t much like my methods, but they sure as hell get results.” During a bad year when the Chester office was under pressure to cut costs, he had, so the story went, formed his salesmen into two lines, one to one side of him, one on the other. “All of you here,” he told the ones on the left, “are going to take a ten percent cut in pay.” Their faces fell. “But don’t feel too bad,” he said, “because all of you here”—he pointed at the men on his right—“aren’t working here anymore.”
That was not out of character. He had learned that to succeed in the auto business a man had to be unsparing. He might praise his employees generally but never to their faces. He once said of Matt McLaughlin, “McLaughlin here knows more about the resale market than anyone else at Ford,” realized he had gone too far, and quickly added, “Of course, no one at Ford knows a damned thing about it.”
He knew the entire operation—how to squeeze the dealers and make them squeeze their salesmen so the salesmen squeezed their customers; how to withhold the hot models from the dealers who were sluggish and give them as a reward to the good dealers. Beacham’s view of the auto business was primal. “Make money—screw everything else,” he told the young Iacocca. He liked Iacocca because he was so smart, and because he sensed that his hunger meant he was more like Beacham’s generation than the generation then taking power. He did not like the finance people, though he knew the company needed them. He would tell of a log that had frozen in the waters of a great northern river, rushing downriver with the thaw of spring, going faster and faster, with one tiny ant aboard. “That ant thinks he’s steering the log,” Beacham would say. “And do you know who the ant is? He’s a Ford Motor Company bean-counter.”
Beacham tested the young Iacocca from the start. Iacocca liked to tell of being sent to Pottstown, Pennsylvania, where a dealer had forty used trucks on his lot that he had been unable to sell. Nothing but used iron, in Iacocca’s phrase, a tiny step up from junk. Iacocca went there and figured out the market and got the dealer to lower the prices so that if it was junk, it was at least heavily discounted junk. The dealer soon moved everything. Iacocca sent back word to Beacham of his great victory. The only response was a telegram from Beacham which said, “Move on to Tamaqua,” another Pennsylvania town where another junk pile awaited him. The lesson he learned from those days was very basic: Get cash for junk, move it, keep nothing on the lot for more than thirty days.
I
n time, his career aided by Beacham, he became a star. Even more remarkable was that he was about the only one of Beacham’s boys allowed to tease their leader. Once, after Iacocca had begun his ascent, he outlined his proposal for an upcoming sales campaign about which Beacham was quite dubious. There were three main reasons it would succeed, Iacocca said, and listed them. Beacham interrupted him.
“I don’t know, Lee,” he said. “I won’t be here to help you—I’m going on vacation.”
“That’s reason number four,” Iacocca quickly responded.
But all of his early training came from Beacham. The first law was always to push the car. The second was that the car could always be pushed. If the car had not been pushed it was the fault of the salesman, not the car. That training set Iacocca apart: In what was becoming an increasingly genteel, almost theoretical profession he was a man without illusion. He also understood right away that to succeed at Ford he needed visibility, and he was skillful in gaining it. As a very junior salesman, only one year in the company, he decided that most of the salesmen in the region were poorly prepared. So he came up with the idea of a regular evening training course to raise the level of professionalism. That promptly set him apart. Soon the idea was taken up by other regions, and his superiors were aware that Iacocca was different, more directed.
Reckoning Page 46
