BUSINESS

The quiet conqueror

Chrysler finds Iacocca’s heir in Europe

JOHN DALY March 30 1992
BUSINESS

The quiet conqueror

Chrysler finds Iacocca’s heir in Europe

JOHN DALY March 30 1992

The quiet conqueror

BUSINESS

Chrysler finds Iacocca’s heir in Europe

Although the two men design cars for rival manufacturers in Detroit, General Motors Corp.’s vice-president of design, Charles Jordan, and his counterpart at Chrysler Corp., Thomas Gale, are personal friends. Last week, after outgoing Chrysler chairman Lee Iacocca surprised the automotive industry by naming Robert Eaton, president of GM Europe, as his successor, Gale telephoned Jordan and asked him what Eaton was really like. Jordan replied that he had nothing but praise for his former boss. “Those of us in the creative end of our company know him very well,” said Jordan. He added: “Chrysler has a great team there now. I’m envious.” Some senior Chrysler managers had more personal reasons to be envious. By choosing Eaton, Chrysler’s board of directors had to push aside the flamboyant Iacocca, 67, who had campaigned hard in recent months to stay on as chairman past his announced retirement date of Dec. 31. The board also passed over company president Robert Lutz, 60, widely regarded until last week as Iacocca’s heir apparent. Nine other high-ranking executives have left the company over the past two years, including Chrysler vice-chairman Gerald Greenwald, who quit abruptly in 1990, but who still enjoyed widespread support among Chrysler’s senior management. Still, in a clear attempt to present a united front, Lutz declared: “You don’t sulk or quit when someone else is appointed captain of the team.”

At first glance, the difference in personalities between the subdued Eaton and the tough-talking, cigar-smoking Iacocca could not be greater. Shortly after Henry Ford II fired him as president of Ford Motor Co. in 1978, Iacocca took on the top job at Chrysler, which was then on the brink of bankruptcy. With the help of $1.7 billion in U.S. government loan guarantees, he guided the company back to profitability in the early 1980s. He also became a celebrity by appearing in the company’s television commercials and publishing a bestselling autobiography.

By contrast, Eaton has spent almost his entire career out of the limelight, in design and engineering jobs. When they worked together at GM, said Jordan, Eaton “loved to just sit down and talk about cars,” even in his spare time. And unlike the thrice-married Iacocca, Eaton has been married to his wife, Cornelia, for 28 years; they have two sons. Indeed, last week a joke quickly began circulating in Detroit: “They are going to rename those blank books they sell in bookstores. They are going to call them Eaton: An Autobiography.” Because Eaton has only limited experience in finance and marketing, some analysts advised caution about investing in Chrysler in the

coming months. They added that Eaton may have difficulty running a much smaller and less stable company than GM. Said David Dreman, chairman of New York City-based investment firm Dreman Value Management Inc., who

sold all his firm’s Chrysler stock earlier this year: “Eaton has had no experience in Chrysler’s type of culture—the culture of survival.” Last year, however, GM Europe posted a $2.3-billion profit under Eaton’s direction, while GM as a whole lost a record $5.1 billion. Said Jordan: “He does not have a narrow Detroit mentality. He has a broad viewpoint.” Unlike his predecessor, Eaton, who declined requests for interviews last week, seems to be content to let his actions speak louder than his words.

JOHN DALY