He had one sister named Antonette. The family lived in Allentown, Pennsylvania. His father was some what of anentrepreneur in the food service industry. The family business was called theOrpheum Weiner House in Allentown, Pennsylvania. The company is still standing today, operating under the name Yocco’s,his uncles’ are still making hot dogs for the public. Growing up in Allentownwas difficult for Lee, because of his ethnic background.
Allentown wasprimarily made up of Dutch immigrants. In his early years of education he wasridiculed for his heritage. An his senior year in high school Lee came downwith rheumatic fever. He had a harsh bout with the disease because there was nomodern medicine to aid in the recovery. In 1941 during the World War he wasvery excited about joining the military. Ironically, the illness that had almostkilled him, saved him from going to war.
Most of his classmates that joined theservice had been killed over-seas and abroad. For college Lee chose LehighUniversity for its engineering program, although he wanted to go to Purdue, hedid not get a scholarship. Lehigh University was one of the sights that FordMotor Company used to recruit new employees. He was able to secure a place inthe Ford training program, it was difficult for him to get admission but hesurvived.
During his time in the training program Lee had become lessinterested in the engineering aspect of the business and more in sales. Hedropped out of the program to pursue areas in sales with the Ford Corporation. During his time at Ford Lee Iacocca came out with several very innovativepurchasing concepts. One concept was the 56 for 56 payment plan.
This paymentplan would allowed the consumer to purchase a new Ford vehicle with a twentypercent down payment and a $56 monthly payment until the vehicle was paid off. This was one of the first payment plans that was structured to be affordable forthe consumer. The system was responsible for selling over seven hundred fiftythousand vehicle in 1956. Although his career with the Ford Motor Company wasextensive, all that would come to an end with the production of one vehicle the”Pinto”. After Ford was able to settle law suits over the compact car forexplosive reasons, (the Pinto was noted for exploding from rear end collisions),they recalled over a million and a half Pintos. This was June of 1978, onemonth before Lee was fired.
In 1979 Lee Iacocca was employed with the Chrsler Corporation. Withinhis first few month there he had seen Chrysler cancel production of over sixtythousand cars. After a short period of time he found out there were no dealersto sell cars for them. Their inventory was bulging because of cars that weremade with no destination. These vehicles were part of Chrysler’s sales bank.
It was a large inventory of cars that were manufactured only to keep plantsrunning. One of his first ideas was to get rid of the sales bank. He putpressure on all local dealers to empty the inventory. He made the dealers takeup the slack so he could implement a just in time form of inventory. They wouldbe manufacture specific orders so no capital would be wasted. Another problemwith Chrysler was they were leasing vehicles to rental agencies instead ofselling to them.
Chysler had been running the worlds largest leasing company. Every six months they would buy them back. The new car dealers wanted nothingto do with the rented cars. With this policy in effect, Chrysler also madeitself the worlds largest used car broker. In late 1979, early 1980 Chrysler had wrote off almost 88 milliondollars in used car losses. Between the inventory problem and the leasing issue,Chrysler’s loss was in the five hundred million dollar range.
The next item was the staff. He needed to replace over thirty five stoplevel managers, and replace then with people that knew what they were doing. With over twenty years of experience with Ford it was clear were thereplacements would come from. Sales continued to drop steadily until thecreation of the K car. These were compact vehicles that would put Chrysler backin the market place or finish them off.The present problem was that Chrysler had such a