Former Chrysler boss Lee Iacocca passed away today at the age of 94. Since he was one of the most prominent protectionists of the 1980s and 1990s, I wrote about him often. Here’s a piece I did for the Detroit News in 1985. (I tip my hat to my late father, who kept my early articles in a binder because otherwise I would have been vexed to my find this piece from my pre-computer times.)
Detroit News, April 9, 1985
Iacocca: America’s Wonder is “Consumer Enemy No. 1″
by James Bovard
Lee Iacocca’s widespread fame is the ultimate proof that you can fool some of the people all the time. The most respected welfare recipient in American history is being slobbered on by the press, fawned over by politicians, and idolized by thousands of businessmen. But as a non-Detroiter I find myself wondering: Why is a man whose greatest successes in life are finagling a large federal handout and preventing consumers from buying better-built foreign autos revered as if he had actually done something productive?
P.T. Barnum may have been thinking of journalists when he said there’s a sucker born every minute. The Saturday Evening Post saluted Iacocca as “the sex symbol of America’s recovery.” The Washington Post commended Iacocca as “Dr. Detroit,” and Newsweek proclaimed: “Lee Iacocca is a real-world Rocky.”
Iacocca’s biography is selling like hot cakes, and his reputation seems to grow almost daily. Pollster Arthur Finkelstein found in a poll of 1988 presidential preferences that Iacocca trailed George Bush by only three points (41 to 38 percent). Whatever Iacocca is paying his public relations firm – they’ve earned it.
Iacocca is so popular largely because of his reputation for taking Chrysler from the brink of bankruptcy to the heights of profitability. But Chrysler is raking in the billions now not because it is making better cars, but because Iacocca and others persuaded Uncle Sam to prohibit Americans from buying more better-made Japanese autos.
Iacocca brags that the 1979 government bailout of Chrysler was a huge success, and even says federal loan guarantees are “as American as apple pie.” But since 1978, Chrysler has laid off more than a quarter of its workers and shut down 21 factories. A bailout intended to save jobs still resulted in tens of thousands of Chrysler workers losing their paychecks.
Iacocca even tried to cheat the government on the bailout deal. To cover the government’s risk in guaranteeing a $1.2 billion loan to a bankrupt corporation, Chrysler gave the Treasury Department warrants to buy 14 million shares of Chrysler stock at $14 a share. AT the time of the bailout, Chrysler was trading at $7 a share; a few years later, thanks largely to the bailout and import quotas, Chrysler stock was up to $27 a share. When the Treasury announced it would cash in the warrants and collect a few hundred million dollars for taxpayers, Iacocca raised hell and tried to welch on the bargain. Iacocca whined, “That kind of profit is almost indecent….” Even though Chrysler has made billion thanks to government protection, Iacocca still tried to avoid paying Uncle Sam a single penny.
Iacocca wants the entire economy restricted, squeezed, and bled in order to benefit Chrysler. Iacocca tried to block the GM-Toyota joint effort to produce small cars in California, saying the partnership would be terrible for the auto industry. But at the same time Iacocca was doing his “Chicken Little” routine, Chrysler was already colluding with Mitsubishi, selling tens of thousands of their cars in the U.S.
Iacocca is America’s leading Jap-basher. Iacocca sweats that the Japanese “want to rape the market” and that “We’re a colony again, this time of Japan.” When Iacocca gave a speech on Dec. 7 on Japanese imports, he reminded his audience that it was a “day of infamy,” invoking Pearl Harbor and trying to stir up hatred for a valuable ally. Congressman Robert Matsui, D-Calif., derided recent Iacocca remarks as “racist.”
But it is understandable that Iacocca would seize every chance to slur Japan. Japanese car makers are still putting his company to shame.
Consumer Reports recently surveyed used cars, and concluded that most of the 1982 and 1983 American-made Chryslers were “worse than average,” and a quarter of the models were “much worse than average.” By contrast, most Toyotas and Hondas were above average.
Iacocca is the biggest cheerleader for auto import quotas. As a cartoonist summarized Iacocca’s view: “If you can find a better car – slap a quota on it.” A Brookings Institute study estimated that atuo import quotas have cost American consumers more than $4 billion a year in higher car prices. Iacocca wants to permanently limit Japan to selling about 1.5 million cars in theU.S. market. If Iacocca gets his way, american consuemrs can look forward to les choice, higher prices, and more time spent waiting around in auto repair shops.
Instead of being praised as a modern-day capitalist, Iacocca should be ridiculed as just another beggar of favors from Washington. Instead of being praised for his leadership, Iacocca should be castigated for his unending hypocrisy, self-serving policy prescriptions, and hate-mongering tactics. Instead of being lauded as an industrial folk hero, Lee Iacocca should be scorned as Consumer Enemy Number One.
Here’s a 1992 Los Angeles Times Magazine article where I discussed Iacocca, scoffing at his assertion that the U.S. is “the last bastion of free trade.”
Here’s a 1992 New Republic piece I did on Bush inviting Iacocca & other CEOs to accompany him to Japan for a reelection campaign photo op that turned into a disaster.
Here’s a 1992 Journal of Commerce oped I wrote bashing Iacocca’s Minivan madness.
Iacocca probably got thumped in this 1991 C-span appearance.
I also jibed Iacocca’s endless demagoguery against auto imports in The Fair Trade Fraud (St. Martin’s, 1991).
UPDATE – Just found this copy of the angry letters to the editor that the Detroit News oped provoked –JPB Iacocca Letters Editor 1985