Lee Iacocca, the man who led Chrysler through a government bailout in the late 1970s, says the CEOs of Detroit's automakers should not be forced to quit as a condition of getting government loans.
Iacocca, Chrysler's retired chairman and chief executive, said in a statement Tuesday that now is not the time to make executive changes, as suggested by Senate Banking Committee Chairman Chris Dodd, D-Conn.
"Having been there, I do not agree with the sentiment now coming out of Congress that the management should be changed as a condition of granting loans to the Detroit automakers," Iacocca said. "You don't change coaches in the middle of a game, especially when things are so volatile."
He added that the auto industry has been hit by an unpredictable series of events beyond its control.
"The companies may not be perfect but the guys who are running them now are the only ones with the experience and the in-depth knowledge and understanding of how the car business really works," he said. "They're by far the best shot we have for success."
Dodd said over the weekend in a television interview that Wagoner "has to move on" as part of a government-run restructuring. President-elect Barack Obama, without naming names, said current auto industry management should be ousted if it doesn't understand the need to make changes. Dodd didn't name Ford Motor Co. CEO Alan Mulally or Chrysler LLC's Bob Nardelli.
Chrysler, General Motors and Ford are seeking up to $34 billion in loans to help them weather the worst auto sales climate in 26 years. Congress may vote this week on a plan to give them temporary relief while being held accountable for restructuring.
Iacocca persuaded Congress to issue $1.5 billion in loan guarantees for Chrysler in 1979.
The bill was passed four days before Christmas and signed into law by President Jimmy Carter in January 1980. Like the bill now under consideration in Congress, the 1979 legislation gave the government broad oversight of the company and an ownership stake. Chrysler avoided bankruptcy and went on to develop its highly successful fuel-efficient K-cars.
Chrysler eventually drew down $1.2 billion in loans and repaid them within three years, seven years early. Chrysler turned a profit in 1982 and the government made $311 million in the sale of stock warrants and another $25 million in loan guarantee fees.