Iacocca’s GW Commencement Speech on Auto Safety
Lee A. Iacocca, the top executive of Chrysler Corp., came to Congress a few days ago to proclaim his belief in the risks of free enterprise while asking for the security of the federal government’s credit to bail out his overextended, mismanaged company. He originally had wanted more than $1 billion in cash from Uncle Sam, but the U.S. Treasury balked.
To Lee Iacocca, formerly president of Ford Motor Co. and of Pinto fuel tank notoriety, contradictions between commitments to both free enterprise and government bailouts are mild fragilities of the intellect. Truth has become a casualty these days as Chrysler’s boss desperately strives to rewrite history to make U.S. government safety, health and waste prevention standards the scapegoat for Chrysler’s failings.
Recently, I came across a series of what must be distortions, to phrase it mildly, by Iacocca in a written commencement speech at George Washington University on May 6, 1979. On the slim chance that the credibility gap of Chrysler’s management may have some relevance with some members of Congress who are pondering which of many proposals to support in the Chrysler bailout controversy, the following excerpts from historian Iacocca’s speech may be contrasted with the real historical record:
Iacocca: “The four most effective safety features on today’s cars are safety door latches, seat belts, safety glass and the energy-absorbing steering column. The automobile industry developed all four of these features voluntarily, well before the government made them a requirement.”
Response: One of the very reasons for the 1966 federal auto safety law was that the auto companies, for years prodded by independent research groups, citizens and several state legislatures, had these features developed but did not put them in their cars at the factory. Seat belts went into cars after mounting pressures and state legislation. The full three-point belt became standard in 1968 due to a mandatory federal standard. The other safety features mentioned by Iacocca followed public pressure and tough congressional hearings.
Iacocca: “But then the regulators got carried away, and came up with some gimcrack devices like 5-mile-an-hour bumpers and the ignition interlock. In the case of the interlock, the public was so outraged at having to buckle up a bag of groceries on the front seat before they could start the car that they forced Congress to throw it out. But by then hundreds of millions of dollars of the consumers’ money had gone down the drain.”
Response: Iacocca was president of Ford Motor Co. in the early ’70s. On Dec. 3, 1970, Ford wrote to Douglas Toms, chief of the government’s auto safety bureau, urging the very interlock system, now ridiculed by Iacocca, as a substitute for the passive restraint standard (including air bags) recommended by Toms. In mass magazine advertisements during 1971, Ford pushed what it called the “Buckle-Start” system requiring the seat belt to be fastened before the car would start.
Not satisfied with repeated written support for the interlock, Henry Ford visited then-President Richard Nixon to urge the interlock over the air bag or other passive restraints. As former Rep. John Moss subsequently documented, Ford officials later met with John Ehrlichman who privately ordered Secretary of Transportation John Volpe to issue the interlock standard starting with 1974 model cars. Henry Ford contributed heavily ($49,766) to the Nixon campaign after his company won Ehrlichman’s support. Ehrlichman admitted to blocking the air bag in a conversation with an insurance group official prior to a television interview in Dallas in July 1976.
Iacocca: “Five-mile-per-hour bumpers were supposed to save money. Instead, they made car prices go up and fuel economy go down by 600 million gallons a year because of the added weight. One economist estimates that consumers now spend $770 million a year for a so-called “safety bumper” system that has no safety benefit whatsoever.”
Response: Ford Motor Co. had an effective 5-mph bumper on its 1932 model. Years later bumpers deteriorated into cosmetic chrome eyebrows reaching a low point in 1971. A mere 5-mph thud could produce more than $400 in damage, according to tests conducted by the respected Insurance Institute for Highway Safety (IIHS). Total costs per year for car owners came close to $2 billion.
Both the IIHS and the Department of Transportation have studies showing major savings to motorists from the bumper standard, in contrast to Iacocca’s anonymously cited economist. Further, the standard does have some safety benefits such as protection of headlamps and other front end equipment. And as Opel showed, protective bumpers need not be heavy, fuel-costing bumpers.
Iacocca: “We currently meet standards for automobile emissions that remove 90 percent of all pollutants from our cars.”
Response: He neglects to mention that there are no such reductions for nitrogen oxides, asbestos and other vehicle-related pollutants. As for carbon monoxide and hydrocarbons, the auto company controls degrade rapidly after a few thousand miles of travel. City dwellers wouldn’t be choking from vehicle air pollutants, as in Washington and Los Angeles, if vehicles today emitted only 10 percent of the pollutants released by cars in the early 1960s.
When will Congress begin to judge the credibility of Big Business executives as it judges the credibility levels of individuals? Equal treatment might do wonders for corporate veracity.