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I think we're looking at Mr. Iacocca with some rose-tinted glasses. He sought government bailouts, fought against requiring seatbelts in cars (because a few do

by throw20102010 7y ago

I think we're looking at Mr. Iacocca with some rose-tinted glasses. He sought government bailouts, fought against requiring seatbelts in cars (because a few dollars worth of nylon would "ruin" his margins), and also fought against environmental standards, particularly requiring catalytic converters (to be fair, catalytic converters probably did ruin his margins). He is definitely an icon, but do not forget that he was a cutthroat businessman that would do anything to make sure his businessed thrived. https://nader.org/1979/10/25/iacoccas-gw-commencement-speech-on-auto-safety/ https://nader.org/1979/10/25/iacoccas-gw-commencement-speech...

braythwayt 7y ago
I’m actually not very pro-Iacocca in the least, but I must give credit where credit is due. At the time I questioned the loans, and still do. But in comparison to bank bailouts, Those arrangements were far less costly for taxpayers.
- throw20102010 7y ago
  In your original comment you never mention bank bailouts. A far more appropriate comparison would be the more recent bailouts of US automakers in which the TARP loans were all repaid. Granted, the partial ownership of the companies that the government took on during the bailout resulted in a loss- but I'm not sure if it would have been more appropriate for the government to hold the stock until it recovered. https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670 https://www.thebalance.com/auto-industry-bailout-gm-ford-chr...
  - addicted 7y ago
    TARP was primarily about the banks, but the money authorized was expanded to cover automakers as well. The government made a profit on it overall, and both the bank and auto parts were profitable. The problem with TARP was the government should have got a lot more equity in return for what it provided (for example, Goldman Sachs and Warren Buffett also invested, and got better terms, but the government's impact was even greater, and should have gotten as good terms, if not even better ones than Buffett and Goldman).
    - carlivar 7y ago
      GM bondholders, many of them retirees, were also screwed. The govt overrode traditional bondholder priority in restructuring, in favor of the union. This was wrong.
  - maxlybbert 7y ago
    I think the comparison to bank bailouts is fair: in his autobiography, Iacocca complained that he had to go to Congress to get a billion dollar loan, but the Federal Reserve routinely loaned similar amounts to banks (although I don’t know how well he understood banking, so his definition of loans to banks may have been unfair).
- linksnapzz 7y ago
  The bailout that Iacocca oversaw didn't cost taxpayers anything. Those were loan guarantees; the federal gov't essentially co-signed a loan from Manufacturers Hanover (now JPMorgan-Chase). At no time was public money given, only risked if the loan defaulted.
Aloha 7y ago
That link isn't very fair, in 1956, he pushed ford to roll out safety as a sales point, they got plowed over by GM that year, and determined rightly, that safety doesn't sell. He was in favor of seat belts, opposed to airbags (I still think airbags have a poor rate of return - dollars for lives saved).
- oblio 7y ago
  > I still think airbags have a poor rate of return - dollars for lives saved It depends on how much you value your life and your body parts. I value them quite highly ;)
- behringer 7y ago
  How many lives saved until airbags are worth the cost?
  - nate_meurer 7y ago
    Please don't do that. Although airbags are much less controversial now than when they were first introduced, there is still legitimate debate about cost vs benefit, especially given that airbags themselves are quite capable of causing injury.
    - behringer 7y ago
      Please don't do what? Debate the topic? Learn to communicate respectfully.
      - dang 7y ago
        You've broken the site guidelines in quite a few comments today. We ban accounts that do that. Would you mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and using HN in its intended spirit? We'd be grateful.
        7y ago
jogjayr 7y ago
IIRC from reading his autobiography, his position was slightly more nuanced. It went something like the following: 1. The government requires Chrysler (like every other manufacturer) to put in catalytic converters and other things 2. But for anti-trust/collusion reasons manufacturers aren't allowed to collaborate on developing these things and splitting the cost 3. As the smallest carmaker it has been most expensive for Chrysler to do, as there are fewer unit sales to amortize the costs over 4. Since government regulations are partially responsible for putting Chrysler in this position, the government should help with a bailout Again it's been a long time since I read the book so maybe I'm remembering it wrong. For #2 one could argue "just source those things from a 3rd party supplier then". I don't know if that argument was ever made.

braythwayt 7y ago

I’m actually not very pro-Iacocca in the least, but I must give credit where credit is due. At the time I questioned the loans, and still do. But in comparison to bank bailouts, Those arrangements were far less costly for taxpayers.

throw20102010 7y ago
In your original comment you never mention bank bailouts. A far more appropriate comparison would be the more recent bailouts of US automakers in which the TARP loans were all repaid. Granted, the partial ownership of the companies that the government took on during the bailout resulted in a loss- but I'm not sure if it would have been more appropriate for the government to hold the stock until it recovered. https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670 https://www.thebalance.com/auto-industry-bailout-gm-ford-chr...
- addicted 7y ago
  TARP was primarily about the banks, but the money authorized was expanded to cover automakers as well. The government made a profit on it overall, and both the bank and auto parts were profitable. The problem with TARP was the government should have got a lot more equity in return for what it provided (for example, Goldman Sachs and Warren Buffett also invested, and got better terms, but the government's impact was even greater, and should have gotten as good terms, if not even better ones than Buffett and Goldman).
  - carlivar 7y ago
    GM bondholders, many of them retirees, were also screwed. The govt overrode traditional bondholder priority in restructuring, in favor of the union. This was wrong.
- maxlybbert 7y ago
  I think the comparison to bank bailouts is fair: in his autobiography, Iacocca complained that he had to go to Congress to get a billion dollar loan, but the Federal Reserve routinely loaned similar amounts to banks (although I don’t know how well he understood banking, so his definition of loans to banks may have been unfair).
linksnapzz 7y ago
The bailout that Iacocca oversaw didn't cost taxpayers anything. Those were loan guarantees; the federal gov't essentially co-signed a loan from Manufacturers Hanover (now JPMorgan-Chase). At no time was public money given, only risked if the loan defaulted.

Aloha 7y ago

That link isn't very fair, in 1956, he pushed ford to roll out safety as a sales point, they got plowed over by GM that year, and determined rightly, that safety doesn't sell. He was in favor of seat belts, opposed to airbags (I still think airbags have a poor rate of return - dollars for lives saved).

oblio 7y ago
> I still think airbags have a poor rate of return - dollars for lives saved It depends on how much you value your life and your body parts. I value them quite highly ;)
behringer 7y ago
How many lives saved until airbags are worth the cost?
- nate_meurer 7y ago
  Please don't do that. Although airbags are much less controversial now than when they were first introduced, there is still legitimate debate about cost vs benefit, especially given that airbags themselves are quite capable of causing injury.
  - behringer 7y ago
    Please don't do what? Debate the topic? Learn to communicate respectfully.
    - dang 7y ago
      You've broken the site guidelines in quite a few comments today. We ban accounts that do that. Would you mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and using HN in its intended spirit? We'd be grateful.
      - 7y ago

jogjayr 7y ago

IIRC from reading his autobiography, his position was slightly more nuanced. It went something like the following: 1. The government requires Chrysler (like every other manufacturer) to put in catalytic converters and other things 2. But for anti-trust/collusion reasons manufacturers aren't allowed to collaborate on developing these things and splitting the cost 3. As the smallest carmaker it has been most expensive for Chrysler to do, as there are fewer unit sales to amortize the costs over 4. Since government regulations are partially responsible for putting Chrysler in this position, the government should help with a bailout Again it's been a long time since I read the book so maybe I'm remembering it wrong. For #2 one could argue "just source those things from a 3rd party supplier then". I don't know if that argument was ever made.