Research Paper on:
Lee Iacocca And Chrysler - Case Study

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company had gained a 25 percent domestic market share and was the third largest auto manufacturer in the world, behind GM. By 1978, Chrysler was on the verge of bankruptcy.  Desperate for the company to be re-organized and made profitable again, the company hired Lee Iacocca as CEO six months after he had been fired at Ford. Iacocca met  the challenge brilliantly. Within five years Iacocca brought the company to financial stability, he had even paid off a government loan of $1.2 billion dollars seven years before its term  and Chrysler was in second place in the industry, moving Ford to third. Chrysler was beset with major problems: in 1978, the companys sales dropped by $500 million, they had  lost $204.6 million, they lost .9 percent of the domestic auto and truck market share. 1979 was no better, there was a gas crisis, import car sales rose by 34  percent and Chrysler was spending $160 million monthly just for development of vehicles that met new federal safety standards and to bring new products to the market. The company lost  $1.097.3 million. The company had been expanding internationally acquiring companies, such as Simca in France and Rootes in England but these only led to greater losses. The company was very  top-heavy with 35 vice-presidents, each of whom was extremely territorial. There was no coordination between and among different parts of the company. Engineering and manufacturing were not interacting. The result  was a lack of innovation. Worse, quality was compromised. Iacocca began by cleaning house, getting rid of people who did not know what they were doing and brining in  people who were not only knowledgeable with a proven track record but who would interact with a vision towards the future. Within three years, 33 of the 35 vice-presidents were