Lee A. Iacocca, the young executive who rose rapidly through the ranks of the Ford Motor Co. as the "father" of the Mustang, was ousted as president because of "substantial differences" with Chairman Henry Ford II.
In a statement released yesterday, Iacocca called his departure a "resignation" and said he was leaving because he was "not in complete accord" with recent shifts in the company's top echelon that saw the elevation of the chairman's younger brother, William Clay Ford, to the company's inner circle.
"In any case, I leave amicably," Iacocca said.
Henry Ford said Iacocca, who was credited with the development of Ford's successful Mustang in the mir-1960s, had "a distinguished record of achievement" during his 32 years with Ford.
"Over the past 15 months, however, substantial differences have arison on the subject of how Ford should be organized at the most senior level," Ford said. "In the circustances, I believe Mr. Iacocoa's resignation is in the best interests of the company and himself."
William Clay Ford, recently named chairman of the automaker's executive committee, confirmed Iacocca's ouster was decided by the firm's board of directors.
According to yesterday's New York Times, Iacocca, in a discussion with Henry Ford, asked why he was being fired.
"I've been with the company for 30 years. What did I do wrong?" Iacocca asked.
"I just don't like you," Ford responded.
The board considered Iacocca's firing Wednesday night and again Thursday before the action was approved, William Ford said. The vote on the recommendation of my brother (that Iacocca be fired) was unanimous," he said.
Conceiration of Iacocca's ouster, first reported Thursday by the Automotive News, also came from his wife, who was reached by phone at her home in suburban Bloomfield Hills.
When asked whether her husband was leaving Ford, Mrs. Iacocca said, "yes." She said Iacocca would leave the automaker October 15, but would not comment further.
The departure comes after two years of speculation that Iacocca had fallen out of favor with Henry Ford II. That speculation was fueled by the recent reshuffling of several top-level positions at the auto company, including the elevation last month of Ford's brother, William Clay Ford, 53, to the "ruling body" that until then had consisted of Henry Ford II, Philip Caldwell and Iacocca.
Until a year ago, Iacocca had been considered a likely successor to the chief executive's post when Henry Ford, 61, steps down from that spot. That is scheduled to happen in 1980, and Ford has said he also would retire as chairman on his 65th birthday in 1982.
But in April 1977 Henry Ford set up the triumvirate of himself, Caldwell and Iacocca, dividing control of the corporation among the three of them.
Last month, Iacocca slipped a notch farther down the executive scale. Under that reshuffling, Caldwell - who had been beneath Iacocca in the chain of command - reports directly to Henry Ford, as does William Clay Ford, while Iacocca has been reporting to Caldwell.
Iacocca jointed Ford in 1946 as a student engineer at the firm's world headquarters in Dearborn, Mich. After completing a training program, he turned down an engineering job in favor of a sales position at the company's Chester, Pa., district sales office.
In 1956, he became assistant manager in Philadelphia. There he caught the attention of Robert McNamara, then general manager of the Ford Division who later served briefly as company president before becomg Secretary of Defense under President John Kennedy.
McNamara brought Iacocca back to Dearborn, where he became manager of truck marketing and began a meteoric rise through the company ranks.
In 1960, at the age of 36, he was named general manager of the Ford Division and a corporate vice president. In 1965 he became chief of the firm's car and truck group, and two years later he was executive vice president of North American operations.
Iacocca became president of the company in 1970 following an internal power struggle in which William E. (Bunkie) Knudsen was fired as president. He was the son of former Ford executive William E. (Big Bill) Knudsen, who left to become president of General Motors Corp. Young Knudsen, in turn, left GM to head Ford.
"Probably nobody will ever learn the real reason for Iacocca's ouster." Robert M. Lienert, editor of Automotive News, said yesterday. "But both Ford (chairman Henry Ford II) and Iacocca are strong, dominant men. Iacocca said that Ford just doesn't want strong guys around," said Lienert.
Statements from Ford and Iacocca called the pending October 15 departure of Iacocca "an early retirement," on his 54th birthday, but is was clear following two days of debate and a reported split among outside directors that, it was not a happy parting. Iacocca, with seven and one half years as president was there longer than any non-Ford.