Iacocca II, The Sequel

By Janice Castro

Ford may be the most successful U.S. automaker at the moment, but Chrysler Chairman Lee Iacocca is not about to give up his standing as America's best- liked fender-side philosopher. His first book, 1984's Iacocca: An Autobiography, sold more than 6.5 million copies worldwide. Iacocca's story, of how he grew up to be the scrappy, quintessential "car guy" who, after a 32-year career at Ford, rescued Chrysler, brought him more than 71,000 letters, including suggestions that he run for President and pleas for advice on family, finance and foreign affairs. Now the chairman is back with a sequel, Talking Straight (Bantam Books; $21.95), in which he dispenses the folk wisdom his fans were asking for. He is by turns caustic, magnanimous and earthy but almost never bland.

Lambasting Washington, Wall Street and special-interest groups everywhere, Iacocca, 63, complains that too many Americans are unwilling to make the compromises necessary to attack such problems as federal deficits, trade imbalances, ineffective high schools and shoddy workmanship. Unlike many industrialists, he calls for a more activist Federal Government. "The next President must find a way to ease the polarization, because we don't seem much like a 'United' States anymore -- just a bunch of fifty states, each doing its own thing."

Talking Straight, written with the help of New York Times Reporter Sonny Kleinfield, spends only a few chapters updating Iacocca's personal history. He recollects the diabetes-related death of his first wife Mary in 1983, then briskly describes his failed, 19-month second marriage to Peggy Johnson, a former flight attendant. These days, Iacocca says, his traveling companion is often his mother Antoinette, 84.

Iacocca's most startling disclosure is that last year he explored the possibility of a $40 billion takeover of beleaguered General Motors, which is four times Chrysler's size. As proposed by Edward Hennessy, chairman of the industrial conglomerate Allied-Signal, the takeover would have given Allied- Signal GM's auto-supply operations and Chrysler the rest. After talking it over with investment bankers and lawyers, Iacocca rejected the notion as too much of a reach. Said he: "I concluded that it might be easier to buy Greece."

By then, Iacocca had acquired American Motors, Lamborghini and part of Maserati. He reports that his management team resisted the $1.2 billion AMC purchase, but he asserted his power of paterfamilias. Says he: "I heard everybody out, and then I overruled them." Iacocca's acquisitiveness seems somewhat at odds with his opinion of what is wrong with corporate America: merger mania, for one thing. He excoriates raiders and corporate chiefs who wage expensive takeover battles, leaving companies bloodied and indebted. He also faults political leaders for shortsighted partisanship: "All we do is finger-point." He particularly chides President Reagan, whom he describes as a "warm and wonderful human being," but "totally incapable of focusing in on any issue."

Iacocca professes no interest in running for President, and he makes prescriptions that would terrify most politicians. To ease the budget deficits, he calls for higher taxes. On the trade gap with Japan, he recommends the U.S. simply demand that the Japanese reduce the imbalance by, say, 20% a year. Says he: "Take my word for it, the Japanese like to work toward objectives. It's time we gave them one." Iacocca calls for gun control, advocates drastic reductions in federal farm subsidies and backs a mandatory draft for all young men and women (with a public service option).

He acknowledges that "it's nearly gold-watch time for me" and discloses his retirement plans: "Teaching and preaching." He hopes to find a podium at his alma mater, Lehigh University in Bethlehem, Pa., where he is helping to raise $40 million for the Iacocca Institute, an industrial-policy center. Says he: "I'm going to try to be a cross between a savvy, street-smart guy and an elder statesman." In that sense, Talking Straight could turn out to be a future professor's best-selling textbook.