Legendary news anchor Walter Cronkite told his millions of viewers on the CBS Evening News that “it all sounds like something from one of those enormous novels about the automobile business.”
The drama in Dearborn on July 14, 1978, made headlines in news outlets across the country: Ford Motor Co. Chairman Henry Ford II had fired Ford Motor’s celebrated 53-year-old President Lee Iacocca after eight years at the helm and 32 years working at the company, where he became famous as “the father of the Mustang.”
Ford was known for telling executives, on the rare occasion when they challenged him, that “my name is on the building.” When Iacocca asked why he was being let go, the auto tycoon reportedly told him, “I just don’t like you,” though Iaccoca recalled a slightly different line in his autobiography.
Ford and Iacocca, two titans of corporate America, joined Ford Motor at about the same time, though from far different circumstances.
In July 1945, Henry Ford II, 28, was named president and CEO of the family company, replacing his feeble grandfather, Henry Ford, who had taken the reins of the struggling company following the death of Edsel Ford, Henry II’s father.
The grandson then hired 10 young men from the Army Air Force Office of Statistical Control, soon to be nicknamed the “Whiz Kids.” They included future Secretary of Defense Robert McNamara and Ernest Breech, whom Henry Ford II named executive vice-president. Together Ford and his team introduced the highly successful 1949 Ford sedan that helped save the company.
In an essay about Henry Ford written by Iacocca for Time magazine in 1998, he wrote in part: “It was Henry II who rescued the (Ford) legacy. He encouraged the ‘Whiz Kids’ to modernize management, which put the company back on track.”
The Mustang rocked the fair
Iacocca, the son of Italian immigrants, joined Ford Motor in 1946 as an engineer after obtaining a master’s degree in mechanical engineering from Princeton. He soon switched to sales and marketing, where he quickly moved up the corporate ladder.
By 1960, Iacocca had become known as a dynamic and innovative sales genius. He was named vice president and general manager of the Ford Division, the same year Henry Ford II shifted titles to become chairman of the board and CEO.
When the company introduced the Ford Mustang at the New York World’s Fair on April 17, 1964, the 39-year-old Iacocca became world famous after appearing in Time and Newsweek cover stories as the mastermind behind the iconic pony car that soon set sales records.
Three years later, Iacocca was named executive vice president. Insiders assumed that the wunderkind was the heir apparent to the Ford presidency.
But Henry Ford II thought he had a better idea.
Ford shocked the automotive world in February 1968 when he knocked down “Whiz Kid” and Ford President Arjay Miller to the newly created position of Vice Chairman and hired rival General Motors Vice President Semon “Bunkie” Knudsen to lead Ford, bypassing Iacocca.
But just 19 months later, Ford fired Knudsen by simply telling him without further explanation that “sometimes these things don’t work out.”
Two straight shooters
Instead of then promoting Iacocca to the presidency as most expected, Ford appointed Robert Hampson, Robert Stevenson and Iacocca as the three leaders who were to operate as equals while reporting to him.
After learning that a bitterly disappointed Iacocca was offered a leadership position in another industry, Ford finally appointed Iacocca president in December 1970.
“Hank the Deuce” and “Lido” were known to have clashed over the years regarding product planning and executive changes.
In 1964, Iacocca told Time, “Henry Ford wants you to be blunt, and I happen to be blunt. We don’t try to Alphonse and Gaston each other and we don’t try to beat around the bush.”
According to historian Douglas Brinkley, “Henry Ford II distrusted Lee Iacocca. In 1975, he had even authorized $1.5 million of the company’s money to conduct an investigation of the president, his business, and private life. Nothing of interest was ever discovered.”
‘It’s personal’
In April 1977, Henry began to erode Iacocca’s power when he created a three-member “Office of Chief Executive” with Ford remaining chairman and CEO, Iacocca continuing as president, while Phillip Caldwell was named vice chairman who would serve as CEO in Henry Ford’s absence. Later, Henry’s brother William Clay Ford was added to the group of three.
Ford continued to humiliate Iacocca. In June 1978, Ford appointed Caldwell second-in-command as deputy chief executive with Iacocca having to report to Caldwell, who once worked under him.
Iacocca still wouldn’t quit.
In July 1977, Henry Ford met with the outside board of directors to announce that he planned to fire Iacocca.
When he received strong resistance from some of the directors, Ford reportedly told them, “It’s him or me.”
The board then unanimously approved Iacocca’s firing. The following day, Iacocca was summoned to Henry Ford’s office, where the ax fell.
In his bestselling 1984 autobiography, “Iacocca,” he wrote: “Henry couldn’t give me a reason. ‘It’s personal,’ he said, ‘and I can’t tell you anymore. It’s just one of those things.’ But I persisted. I wanted to force him to give me a reason because I knew he didn’t have a good one.
Finally, he just shrugged his shoulders and said: ‘Well, sometimes, you just don’t like somebody.’ ”
Iacocca became the third Ford president to be fired in 10 years, and the second to be fired abruptly, and virtually without explanation.
Iacocca was permitted to stay with the company until Oct. 15, his 54th birthday, but wasn’t allowed to introduce the ’79 Mustang the following week, as previously planned. He was relegated to an uncarpeted office at a Ford parts depot on Telegraph Road to finish out his distinguished Ford career.
But Lee Iacocca would create an even greater legacy when he was hired on Nov. 2 to lead the financially strapped Chrysler Corporation.
He is credited with introducing the K car, minivan, purchasing American Motors to secure the Jeep brand, and most important, saving the company and 600,000 jobs by securing labor concessions and a $1.5 billion federal loan guarantee of which $1.2 million was used and paid back seven years early.
By the time Iacocca retired as Chairman and Chief Executive in 1992, he had become one of the most recognized faces in the country while appearing in Chrysler television commercials stating, “if you can find a better car, buy it.”
At one point, Iacocca was chairman of the project to restore the Statue of Liberty and Ellis Island and later invested in electric bikes, olive oil and other ventures, while promoting diabetes research. He died at 94 in 2019 due to complications from Parkinson’s disease.
Although in his autobiography Iacocca was highly critical of Henry Ford II, upon Ford’s passing in 1987 at age 70 from pneumonia, he released the following statement:
“Our industry and all of America lost a true leader. His vision and hard work transformed Ford into a great company but he will be remembered as well for his many civic contributions. Henry Ford and I were friends and colleagues for a lot longer than we were adversaries, and my sympathy goes to his family and friends.”
Bill Dow is a metro Detroit freelance writer.