STEVE INSKEEP, host:

This week the auto industry is marking a milestone. Toyota says it sold more cars in the first quarter than any other company in the world, even more than General Motors, which has been number one for decades. There was a time when Americans utterly dominated Japanese carmakers and Lee Iacocca knows it well.

Mr. LEE IACOCCA (Former Chairman, Chrysler): I remember at Ford, the Rouge plant, I probably escorted more Japanese through that when they were building lousy cars. They wanted to come and learn, they want to learn. And they were good learners, believe me.

INSKEEP: Lee Iacocca brought Chrysler back from the brink of bankruptcy in the early 1980s. And he is our latest guest on The Long View, our conversations with people of long experience.

What comes to your mind when you hear that Toyota is in the process of passing General Motors as the largest car company?

Mr. IACOCCA: We must have done something wrong. The Big Three is not the big three anymore as we used to know it.

INSKEEP: Any idea what might have gone wrong?

Mr. IACOCCA: Didn't adapt quickly enough to the energy problem in this country, and gas getting to $3.50 a gallon. Not ready with the right kind of cars. Japanese always had smaller fuel-efficient cars. We got to learn to build more small cars, good fuel-efficient cars.

INSKEEP: Would you take me through time a little bit. When people were talking about energy efficiency in, say, the early 1980s, what was you view of all that?

Mr. IACOCCA: Probably I wasn't very conscious of it. We were on a joyride on free oil almost. And we always made energy cheap. And we did it for too long.

INSKEEP: Do you remember a time, when you were head of Chrysler, when you found yourself fighting against, say, a higher fuel economy standard?

Mr. IACOCCA: Yeah, I changed my mind. I tried to follow the market. Got behind too quick here. We should have done more on hybrids.

INSKEEP: Tried to follow the market?

Mr. IACOCCA: Yeah, always follow the market. I tried to do it on a Mustang car. I tried to do it when people changed and the minivan market was for soccer moms and so forth. And I thought we had a couple of homeruns by following the market. That's what we did.

INSKEEP: And fuel economy wasn't the market…

Mr. IACOCCA: It wasn't even - it wasn't saleable, really. People didn't care much about fuel economy at a buck a gallon. At a quick rise to 3.50 gallon, they got their attention in a hurry.

But I've become a real fan in the last year of plug-in hybrids, hybrids that can be plugged in at night. But I think that's the wave of the next five years, big-time plug-in hybrids.

INSKEEP: Things are changing a little bit now, but if you were an American car buyer a couple of years ago, and you went looking for a hybrid car to buy, you could easily find and test-drive a Toyota.

Mr. IACOCCA: A Prius.

INSKEEP: Or a Prius, yeah.

Mr. IACOCCA: That was it. They probably had the market.

INSKEEP: Yeah, you might have to wait a little while to get one, but you can find it. If you went looking for an American option, very few of them.

Mr. IACOCCA: There were virtually none at the time when Prius came out.

INSKEEP: How did Detroit fall behind on that?

Mr. IACOCCA: They didn't believe in hybrids, I guess, thought they were too complex. And they are complex and too expensive. Everybody was waiting for the millennium, meaning we got to have hydrogen. Well, you're not going to have hydrogen. It sounds good. I'd say that's maybe 25 years off.

It seems to me we need some like the Manhattan Project. We need some urgency, saying here's what we should be doing. We've got to get off fossil fuels.

INSKEEP: What changed your mind? About the importance…

Mr. IACOCCA: I hate to admit, maybe Al Gore did. I used to think he was nutty.

INSKEEP: Because of his environmental positions?

Mr. IACOCCA: Yeah. He was a one-trick pony. He was always talking about the environment. He stuck with his principle though. He'll be remembered for triggering a real look at what we're doing to the planet. And he won an Academy Award, I think, for "Inconvenient Truth." So I never thought I'd pay eight bucks to go hear a PowerPoint presentation. That's what it was. You went to school.

INSKEEP: Do you feel strange at all that when you look back in your career, some of your successes involve things like the Jeep Cherokee or promoting minivans that were precursors of the SUVs that people are driving around today and burning a lot of…

Mr. IACOCCA: Yeah. When I bought American Motors, I thought the market for SUVs was 500,000, that they would be the Jeeps.

INSKEEP: Five hundred thousand?

Mr. IACOCCA: It passed five million now, the SUV, a phenomenon. I still can't understand it. I can't explain it. I was part of it. I didn't predict it right. Minivans were different. That was a lifestyle change with the baby boomers coming of age. They all got their drivers licenses when they were 16 with the Mustang crowd. And now they had kids and grandkids. Our minivan has been a cash cow for Chrysler, I mean in the billions.

INSKEEP: Well, if you're driving along and you see one of those minivans, do you say, oh my gosh, the fuel mileage on that thing, I wish I never…

Mr. IACOCCA: No. It's not too bad, by the way. It's pretty good. Of course, loaded with seven kids in it, a lot gear that you're carrying around, you know…

INSKEEP: Gets a little bit worse, gets a little bit worse.

Mr. IACOCCA: Yeah.

INSKEEP: That's The Long View from Lee Iacocca, formerly of Ford and Chrysler. His new book is called "Where Have All the Leaders Gone?"

Mr. IACOCCA: I tell young people to get in the business. It's an exciting business. It's got a lot of problems, but if you're a good problem-solver, there's a place to make - it's an exciting business.

INSKEEP: Plenty of problems to work with there.

Mr. IACOCCA: And how.

INSKEEP: No shortage.

Mr. INSKEEP: Fierce competition, but it keeps you on your toes, believe me.

INSKEEP: And you can hear more of our conversations in The Long View by going to NPR.org.

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