Iacocca back as Chrysler voice – 07/07/05

Automaker reaches into its past to touch new customers: ‘If you can find a better car, buy it.’

By Brett Clanton / The Detroit News

Associated Press

Leee Iacocca helped establish the cash rebate as a major marketing tool in the U.S. auto industry when he appeared in over 60 commercials during the 1980s.

Behind his pitch

• The former Chrysler chairman will be paid a flat fee to serve as a television spokesman as part of the $75 million advertising campaign for Chrysler’s new employee discount plan.

• Iacocca’s foundation will receive $1 per vehicle sold. Proceeds will be donated to the Iacocca Foundation in support of diabetes research.

Lee Iacocca, the flamboyant former chairman of Chrysler Corp., is returning to the airways to help pitch the automaker’s car and truck lineup.

Iacocca, who has been estranged at times from Chrysler since retiring in 1992, will appear in a series of TV commercials as part of a $75 million advertising campaign touting a new employee-pricing promotion available on most Chrysler, Dodge and Jeep vehicles.

In the spots, which begin airing today, the 80-year-old Iacocca will appear alongside former “Seinfeld” star Jason Alexander, who will revive the most memorable line from Iacocca’s popular commercials of the 1980s: “If you can find a better car, buy it.”

It was Iacocca’s personal television appeals that helped rescue the automaker in the 1980s from the brink of bankruptcy. This time, the message will be more humorous and aimed at countering a massively popular employee-pricing offer by rival General Motors Corp.

“We were looking for a way to cut through the clutter out there with a memorable campaign,” said George Murphy, senior vice president of global brand marketing at Chrysler, now a unit of Germany’s DaimlerChrysler AG.

The campaign will support Chrysler’s new “Employee Pricing Plus” program, which began Wednesday and runs through Aug. 1. The promotion offers most 2005 Chrysler vehicles at prices that average 4 to 5 percent below dealer invoice, plus any rebates.

In the case of the Dodge Durango SUV, which carries a $3,500 rebate, the promotion could shave a total of $8,000 to $9,000 off the sticker price, said Gary Dilts, Chrysler’s senior vice president of sales.

Iacocca was unavailable for comment, but a spokesman for the Iaccoca Foundation, a Boston-based nonprofit agency that raises money for diabetes research, said the former Chrysler boss was happy to be back with his old company.

“Mr. Iacocca has a great affinity for Chrysler and hopes to be part of Chrysler’s new campaign,” spokesman Russell LaMontagne said.

Chrysler executives approached Iacocca just last Friday and after reviewing and revising scripts over the weekend, Iacocca and Alexander shot the first commercial Tuesday in New York City. Additional commercials featuring Iacocca are scheduled to be made today, Chrysler said.

Iacocca helped establish the cash rebate as a major marketing tool in the U.S. auto industry when he appeared in over 60 commercials during the 1980s. Such rebates have ballooned in recent years, notably at Detroit automakers, and the industry has struggled to wean consumers off them.

While popular with many shoppers because they can be applied as a down payment on a new car or truck, generous rebates erode profits, brand equity and a model’s residual value over time.

In addition to cash-back offers, Detroit automakers, led by GM, have escalated the industry’s latest marketing battles by extending employee discounts to all consumers.

Ford Motor Co. announced a competing discount deal this week in response to GM’s decision to extend its employee-pricing program through July. Chrysler is also offering employee pricing in Canada.

Despite Chrysler’s efforts to move away from profit-eroding incentives and price vehicles closer to what consumers actually pay, Murphy said GM’s program was too successful not to counter.

“It’s much better to ride the current than to swim against it,” Murphy said.

Chrysler has outpaced the industry’s sales gains this year, but lost market share in June when GM launched the latest discount war with employee-style pricing for all consumers.

The latest Chrysler advertising campaign marks a major homecoming for one of Detroit’s most storied automotive executives.

Iacocca’s history with Chrysler covered the full spectrum — from savior to corporate raider to persona non grata, in keeping with his blunt but charismatic personality.

Four months after Ford Chairman Henry Ford II fired Iacocca as president of Ford in July 1978, he took up with Chrysler and promptly figured out the automaker was in big trouble. He fired executives, bargained with the United Auto Workers union to lower salaries and benefits for hourly workers, lowered his own salary to a dollar a year, and secured loans from the federal government to bail out the company.

Five years later, Chrysler was back on its feet and on July 13, 1983, Iacocca made a big show of paying back the federal government, boasting: “We at Chrysler borrow money the old fashioned way. We pay it back.”

Under the feisty leader, Chrysler set the industry on its ear by introducing the first minivan in 1984, a market segment in which the automaker is still the leader.

But by 1995, after he joined billionaire Kirk Kerkorian’s unsuccessful bid for Chrysler, Iacocca was vilified by many employees as a traitor. Chrysler directors even scuttled plans to name the company’s new Auburn Hills headquarters tower in honor of Iacocca.

After the merger of Chrysler and Daimler-Benz in 1998, Iacocca was repeatedly rebuffed by DaimlerChrysler Chairman Juergen Schrempp in his attempts to return to the company as an adviser or spokesman. At the time, Chrysler was losing money again and in need of a sales boost.

“Schrempp doesn’t want to be upstaged by even the aura of having me around,” Iacocca told The Detroit News in 2002. “The guy doesn’t want me around but I think I could give them some credibility.”

But that will be ancient history to many viewers who still remember the fiery executive for his best-selling books and near run for U.S. president in 1988.

“I don’t think people remember he left under a cloud,” said Marian Salzman, executive vice president and director of strategic content at J. Walter Thompson in New York. “They remember he turned around Chrysler. We think of Lee Iacocca like a Jack Welch, an elder statesman.”

In 2003, on the eve of Ford’s 100th anniversary, Iacocca told The News he still considered himself a Ford man at heart. He spent more than 30 years at Ford and personally created such iconic models as the Mustang, the first pony car.

“If I hadn’t gotten fired, I’d never have had the chance to do all of the other things,” he said.

In addition to a flat fee, Iacocca will receive $1 for each vehicle sold through the end of the year, with proceeds going to his foundation in support of diabetes research, which was founded in 1984 in memory of his first wife, Mary, who died of the disease.

As of late Wednesday afternoon, Iacocca was still in final negotiations over his involvement in the campaign.

But Chrysler said TV ads had been shot and will be aired today as scheduled.

Detroit News Staff Writers Ed Garsten and Eric Mayne contributed to this report You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.

Associated Press

Lee Iacocca, then-vice president and general manager of Ford, right, stands in front of a 1960 Falcon, left, and a 1965 Mustang in 1965.


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