Iacocca: An Autobiography

by Lee Iacocca

On July 13, 1978, I was fired. I had been president of Ford for eight years and a Ford employee for thirty-two. I had never worked anywhere else. And now, suddenly, I was out of a job. It was gut-wrenching.

My father always drilled two things into me: never get into a capital-intensive business, because the bankers will end up owning you. (I should have paid more attention to this particular piece of advice!) And when times are tough, be in the food business, because no matter how bad things get, people still have to eat. The Orpheum Wiener House stayed afloat all through the Great Depression. Later,

ever! In this respect, my father was a little ahead of his time. He foresaw that buying things on time and getting into hock would undermine people’s sense of responsibility about money. He predicted that easy credit would eventually permeate and sabotage our entire society and that consumers would get into trouble by treating their little plastic cards as if they were money in the bank.

They say that people vote with their pocketbooks, and certainly my father’s political views shifted along with his income. When we were poor, we were Democrats. The Democrats, as everybody knew, were the party of the common man. They believed that if you were willing to work hard and not be a deadbeat, you should be able to feed your family and educate your kids. But when times were good—before the Depression and then again when it was finally over—we were Republicans. After all, we had worked hard for our money and we deserved to hold on to it.

I still think all the talent in the world doesn’t excuse deliberate rudeness.

But I always kept in mind my father’s warning: “If he’s bigger than you are, don’t fight back. Use your head instead of your fists.”

Remember this: Anybody who ever buys anything—a house, a car, or stocks and bonds—will rationalize his purchase for a few weeks, even if he made a mistake.

McNamara used to say that the boss had to be more Catholic than the Pope—and as clean as a hound’s tooth.

For example, you may know your subject, but you have to keep in mind that your audience is coming in cold. So start by telling them what you’re going to tell them. Then tell them. Finally, tell them what you’ve already told them. I’ve never deviated from that axiom.

So I’m a great believer in having executives spend time together talking—not always in formal meetings but simply shooting the breeze, helping each other out, and solving problems.

When the product is right, you don’t have to be a great marketer.

I’ve never gone along with the idea that all business skills are interchangeable, that the president of Ford could be running any other large corporation just as well. To me, it’s like a guy who plays the saxophone in a band. One day the conductor says to him: “You’re a good musician. Why don’t you switch over to the piano?” He says: “Wait a minute, I’ve been playing the sax for twenty years! I don’t know beans about the piano.”

Back in 1643, Massachusetts granted a new smelting company exclusive iron-producing privileges for twenty-one years to encourage this developing industry.

Before the prime rate came unglued, interest rates had gone as high as 12 percent only once in our entire history, and that was during the Civil War. But now, once they hit 12 percent, they kept on going. At one point they reached as high as 22 percent. That’s legalized usury. Some states have laws that kick in at 25 percent, suggesting criminal intent. The Mafia calls it vigorish. But as tough as 20 percent interest rates are, what’s even worse is the yo-yo effect. From October 6, 1979, to October 1982, rates went up (or down) eighty-six times, which comes out to once every 13.8 days. How can you plan anything on that?

Freedom is just the ticket of admission, but if you want to survive and prosper, there’s a price to pay.