As he approaches his 80th birthday this October 15, Lee Iacocca can fondly recall many accomplishments. The most obvious one, of course, is leading a nearly bankrupt Chrysler Corp. back to health and prosperity in the 1980s. The flamboyant Iacocca starred in numerous Chrysler-brand ads, something no industry leader had done so effectively at that point in the game.
The persona of Iacocca as a hard-charging auto executive and marketer was crafted earlier in his career. He had advanced from Southeast manager to general manager of Ford Div. during the Eisenhower 1950s, when Chevrolet was easily outselling Ford. No.2 was not enough for Iacocca. He set out exhorting his dealers to go for the gold.
“Ford had lost its No.1 position when a more contemporary Chevrolet car appeared in the late 1920s that made the Model T look too dated,” Iacocca said then. “What with the Depression, World War II and the rub-off of our Edsel flop, Ford dealers were content to play second fiddle. We had to do something about it, to recapture No.1.”
So, with a fresh-looking new Falcon subcompact car taking on Chevy's quirky rear-engine Corvair, Iacocca introduced a 2-word crusade: ”Beat Chevrolet!”
Ford dealers were promised cash rewards if they outgunned their neighborhood Chevy counterparts — and threatened with allotment penalties if they didn't. Ford dealer ads implored customers to buy cars at “Chevrolet-beating” prices. Ford field reps got bonuses, cruises and serious consideration for promotion if their districts and regions out-pointed the archrival.
As John F. Kennedy campaigned successfully for the U.S. presidency in 1960, Ford dealers were striving hard to live up to the “beat Chevrolet” drumbeat coming from the factory. So ardently was the Iacocca team pursuing the No.1 goal that dealers felt compelled to close deals at whatever prices, even if it meant giving away their margins, holdbacks and profits.
“We beat 'em, all right,” says Des Moines, IA dealer Tom Cook. “But at a terrific cost.” Some 500 dealers went broke, especially in rural and mountain towns where Chevrolet was deeply entrenched.
The Chevrolet-Ford rivalry has dominated the American landscape since World War I. Iacocca once noted that in 1912 there were 12,000 Ford dealerships in the U.S., “one in every town of any size with a gas pump in front of it.” The Model T's instant success as the car of “every man” put Ford on top, a noteworthy feat. The 1916 auto show at Detroit's old Convention Hall presented no fewer than 83 brands — all domestic.
Then Chevrolet was introduced as General Motors Corp.'s entry-level product. The Model T was a daunting target, but it wasn't hard to find dealers willing to take on the Chevrolet franchise in the roaring 20s.
GM had been founded in 1908 with Buick, Cadillac and Oldsmobile brands, and the legendary Alfred P. Sloan had a business plan that called for Chevy buyers to trade up to the higher-priced brands and wider selections as their incomes grew.
In one of the biggest mistakes of automotive history, Henry Ford vapidly met the challenge of upstart Chevrolet with its competitive prices and newly established dealerships by merely sticking to the black Model T he started out with.
More in tune with the times, Chevrolet grabbed the No.1 spot from Ford and, after losing it to the Iacocca assault in the early 1960s, won it back until the '80s when the F-150 truck, Iacocca's Mustang creation and the midsize Taurus combined to put Ford back on top — without another “Beat Chevrolet” campaign like the initial one that hurt some Ford dealers.
Last year, as light trucks extended their lead over passenger cars for both Chevrolet and Ford, Ford's 3,808 dealers sold 2,886,575 new vehicles and the 4,147 Chevy dealers sold 2,636,906. Ford benefited from a restyled F-150 pickup to hold its edge over Chevy, even as Ford's dealer numbers fell by 119.
Lee Iacocca rose to president of Ford Motor Co., having planted the seeds for brand leadership that still motivate auto makers. A price must be paid to prevail, but for Iacocca it was always worth it.
Mac Gordon is the dean of the nation's automotive writers. He can be reached at [email protected].