My condolences to the Iacocca family and to the American automotive industry. Lee Iacocca died yesterday at the age of 94. Many people are far more qualified than I to discuss his accomplishments, but he was a true titan of the American automobile industry.
I am an advocate of capitalism, to the surprise of no one reading this. I believe that the private sector usually allocates resources more efficiently than the public sector and since resources are finite, efficiency matters. However, I do not believe that government should never get involved with the economy. Some extreme advocates of capitalism believe that the government should never “bail out” any company or get involved in any production of anything except those goods that the private sector cannot produce because of externalities; national defense is an example.
Chrysler, of course, has been “bailed out” twice by the federal government. Once again, I believe that externalities played a role in those decisions. The collapse of a Big Three automaker could have results that go far beyond that company. From britannica.com an excellent synopsis of the first bailout, which happened while Iacocca was Chrysler chairman:
“In 1979, in the midst of the second oil crisis in a decade, Iacocca made the bold move of appealing to the U.S. Congress for a loan guarantee of $1.5 billion. He overcame strong resistance on Capitol Hill by producing a list including each congressional district with an estimate of the number of jobs that would be lost if Chrysler failed. The strategy worked. Congress approved the deal, and in January 1980 Pres. Jimmy Carter signed the Chrysler Corporation Loan Guarantee Act.
Having secured the loan, Iacocca went to work transforming the company, beginning with serious cost-cutting measures. He announced that he would slash his own salary to $1 a year, and he demanded that everyone else, up and down the line, “take a haircut.” With unprecedented cooperation from both union and management, Iacocca trimmed the company’s balance sheet. In 1983 a more stable Chrysler repaid the loan, well in advance of its deadline, along with an additional $350 million in interest. In a ceremony in Washington, D.C., Iacocca proclaimed, ‘We at Chrysler borrow money the old-fashioned way. We pay it back.'”
Of course, Iacocca is also known as the “Father” of the Ford Mustang, which was developed while he was general manager of the Ford Division of FoMoCo. Again, many are far more qualified to discuss the Mustang and Iacocca’s role in its development. More than ten million Mustangs later it is now, basically and sadly, Ford’s only car among a sea of SUVs and pickup trucks.
As I teased on Monday we have a new member of the garage. I guess four years was as long as my wonderful wife could go without a convertible.
Two pictures of her new, and very beautiful IMO, 2018 Chevrolet Corvette convertible. Despite being a 2018 model it is, indeed, a brand new car. In no small way due to that fact she was able to buy the car at a substantial discount from MSRP. The car is in Watkins Glen Gray Metallic over Black. It is a Z51 model with 3LT trim.
We have purchased seven or eight vehicles (it’s awful that I don’t really know) in the 11+ years we have lived in the mid-Atlantic, but only two or three of those were purchased in the state where we live. This Corvette was also purchased out-of-state. The Internet has really revolutionized commerce. Unlike the purchase of my Z06, however, my wonderful wife was able to lay eyes on the car and to test drive it before deciding to buy it.
Drive it in good health and please be careful, my dear!
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