Iacocca's law of employment

Lee Iacocca, 1924+00 was born in June in Eldon, Pennsylvania, USA. Influenced by his Italian father in his early years, he thought that the road to success through adventure was business. He studies engineering in college. When he first entered Ford, he was assigned as a trainee engineer, but he was eager to promote sales and liked to deal with people. He believes that the seller has always been the key and vital part of the automobile industry and the essence of the enterprise.

1953, Iacocca was promoted to assistant sales manager in Philadelphia. This year, he boldly put forward the sales plan of "56 dollars for a new car in 56 years", that is, customers can pay 80% of the money first, then pay 56 dollars a month, and pay it off in three years. This sales method is acceptable to almost everyone, thus effectively stimulating market demand. In less than three months, Philadelphia's sales jumped from the lowest in the country to the first. Later, this plan became an important part of Ford's national sales strategy. As a reward, Iacocca was promoted to sales manager in Washington area. From 65438 to 0960, Iacocca, a promising young man, became the manager of the automobile department of Ford Motor Company. Then, he began to produce and sell "Mustang" cars with good style, strong sex and low price. As a result, the battle was completely won. 1970, Iacocca was promoted to President of Ford. During his eight years as president, he earned a net profit of $3.5 billion for Ford, leaving the most brilliant performance in the company's history. But success begets jealousy. 1In July, 978, Ford II dismissed the post of president of Esca, and promised to exchange the annual salary of $360,000 for a pension of $6,543,800+on the condition that he would not be employed by other companies.

Iacocca was not tempted by $6.5438+0 million, and even less willing to give in to fate. Many companies, such as International Paper Company, invited him, but he declined. New york University Business School and other three or four schools hired him as the dean, but he declined. When the chairman of Chrysler Automobile Company, who was in deep crisis and on the verge of bankruptcy, came to hire him, he readily accepted and took office immediately. Because in his view, this is an opportunity to challenge Ford. Moreover, after he took office, he claimed that his annual salary was one dollar, and the company came back to life.

From then on, Iacocca began the arduous journey of "the road to the top", and thus showed his extraordinary strategy of reversing Gan Kun. Iacocca was ordered to be in danger. Chrysler was in a desperate situation because of poor management, and it ran out of cash and suffered huge losses. Iacocca carried out thrilling and arduous rescue work with great wisdom and courage. His first step in cleaning up this stall is to choose a suitable breakthrough. After investigation, we soon discovered five fatal weaknesses of the company:

First, discipline is lax. On his first day in office, he encountered two annoying things: first, he found that the office of former President Cafero had become an aisle for people to come and go. The staff walked through the hall without even saying hello, without any rules. Second, he saw the former president's female secretary talking on the phone during office hours. This will cost you your job at Ford, but you have no scruples here. Looking further down, grass-roots organizations are like scattered sand, and their morale is incredibly low.

The second is management confusion. The company does not have a veritable management system and effective rules and regulations. There is no contact between the design department and the manufacturing department, and there is no contact between the manufacturing department and the sales department. Financial management is a mess.

Third, people are overstaffed. The company actually has 35 vice presidents. Iacocca described it this way: "Every mountain has a sovereign, and every mountain occupies its own land." Do things with each other, kick the ball.

The fourth is the backlog of inventory. The company did not organize production according to the dealer's order, and as a result, the inventory was full, with more than 80,000 vehicles in stock. People call this kind of inventory "sales bank". In order to find a market for cars, the company holds a sales once a month. The result is that dealers rely on price reduction, do not buy it, and wait for price reduction, resulting in a vicious circle.

Fifth, there is a shortage of funds. This problem is the focus of all problems. 1978, Chrysler lost $204 million. At the beginning of 1979, the loss was as high as 1 1000 billion USD, and the accumulated liabilities reached 4.8 billion USD. Iacocca mercilessly cut down the "three axes" in streamlining the army and simplifying administration.

The first axe, first cut the top leaders of the company. For those mediocre people who are in high positions and have made no achievements, they will all be removed. 33 of the company's 35 vice presidents have been dismissed, and 24 of the 28 senior department managers have been dismissed.

The second axe is to streamline the organization and reduce the scale of enterprises. He boldly adopted several measures of "closing, stopping, merging, transferring and selling". Of the 52 manufacturers, 16 closed for sale, and 4 merged for production, resulting in a corresponding reduction in output, vehicle types and sales volume, and a "downsizing" of the enterprise 1/3.

The third axe is layoffs. He has fired more than 90,000 people, with a layoff rate of over 50%, and the number of brokers has been reduced from 5,800 to 3,700.

Iacocca is also unique in appointing talents. The first criterion for choosing him is "like-minded". Require subordinates to be familiar with his leadership style and thoroughly implement his management methods. Due to Chrysler's lack of talents, Iacocca had to advise among his old friends. Even "Digging" and "Pulling" have received several right-hand men from Ford.

The first person he "poached" was Gerald greenwald, general manager of Ford's Venezuelan subsidiary. Iacocca especially appreciated his quick mind and down-to-earth spirit, and went to Venezuela to do work in person. After several secret talks, greenwald felt the kindness of his "old boss" and decided to change his family. Become Chrysler's second in command. The second person he invited was paul berg Mo Ze, a 65-year-old former vice president of Ford, who has retired. This man has worked in the position of vice president of Ford for 30 years, which is both diligent and resourceful. Iacocca intends to rely on his rich experience and urge him to take the lead. However, Iacocca repeatedly recommended that he finally took over the responsibility of the general manager of the company. The third is steve miller recommended by greenwald. Miller used to be greenwald's right-hand man in charge of finance. Iacocca regarded him as a "good financial manager" and promoted him to be the company's deputy general manager in charge of financial business. The fourth is Hal Sparic, who worked under Iacocca for 24 years. This person is ugly, but he has a high level of strategy and strong predictive ability. He can predict what kind of cars the market needs most in three or four years, and he is in charge of the company's production plan. In addition, he also hired Mr. Jia loucks, a public relations officer of Ford Company, to take charge of sales, Hans Mathias, a former chief engineer of Ford Company, to take charge of the machinery manufacturing of the whole company, and promoted George Bartz, a former employee of Ford Company who can find fault in an egg, to take charge of product quality. In a word, a strong leadership system headed by Iacocca should be established under the guidance of the capable and the mediocre. First, strive for government loans. As a loss-making enterprise, it is difficult to borrow money. Iacocca gave up his capital. At the last stop, he used huge sums of money to lobby key figures inside and outside Congress and use key government departments. He finally got a loan guarantee of $654.38+50 million. Later, he moved around the state government and the people, raised considerable funds and eased the financial situation.

The second is to lay off employees and reduce wages and reduce labor expenses. Wage expenditure decreased from 2 1 100 million dollars to 654,380+0.5 billion dollars; The salary of senior employees above 65,438+0,700 will be reduced by 65,438+00%, and that of junior employees will be reduced by 2%-5%. At the same time, it is announced that the reduced salary will be reissued after the company makes a profit. The shareholders of the company are in awe of this. After long-term consideration, they agreed with the company's opinion on temporarily freezing dividends, saying that it is difficult for them to share the same responsibility with the company.

Third, vigorously improve inventory management and reduce inventory costs. Iacocca boldly introduced the management mode of "timely purchase, timely use and rapid circulation" of Toyota Motor Corporation of Japan, and paid attention to the relatively centralized layout and nearby use of factories and warehouses while reducing the scale of the enterprise; Changing time-consuming, high-priced and large-scale train transportation into cheap and time-saving and small-scale car transportation will save $450 million in inventory costs every year. At the same time, let the design and manufacturing departments make great efforts to study different models and use the same parts, which reduces the number of spare parts produced by the company from more than 70 thousand to more than 4,000, which brings great convenience to procurement and inventory, saving 300 million US dollars every year. The annual inventory value of the company decreased from 2 1 100 million USD to 654,380+0.2 billion USD.

Fourth, comprehensively reform procurement, budget and production, and strive to reduce the cost rate. First, improve procurement methods. It turns out that the company's raw material production, supply and sales have been circulating internally. Later, the company decided that as long as the cost of self-produced parts is not as good as that of procurement, it will no longer "pump fat and release water" and boldly purchase from outside. The second is to improve the factory budget system. In the past, the internal budget was completely based on the cost of its own products, lacking horizontal comparison, which was not conducive to reducing costs. Later, the company stipulated that the cost of finished products of similar products must be compared with the outside world before making a budget, so that the factory can consciously keep up with the low cost of the same industry. Third, change the imported projects into their own production. Iacocca finally walked out of the trough through hard squeezing and careful excavation. With money in his hand, he had the strength and opportunity to struggle for survival and make great achievements.

First, strengthen market research and forecast, and decisively adjust the product direction. The painful lesson of Chrysler's past failure lies in the serious failure of market information. Iacocca has greatly strengthened the market research department. In June 1982 1 1, a market research team of 60 people was established. Iacocca correctly predicted that a larger car that could accommodate the whole family would be popular in the market according to the new situation that the international oil price began to decline in the 1980s and the domestic gasoline supply gradually eased, as well as the information provided by the investigation team. So he made a decisive decision to increase the production of medium and large cars of "new york people" brand that the company had reserved for many years. At the same time, we quickly launched several new products to occupy the market.

Second, find out the law of fashion change, bring forth the new and set an example first. From the beginning of owning a car to the mid-1960s, the United States experienced "three ups and three downs". 1976 on April 2 1 day, the mayor of Detroit held a grand farewell ceremony for the last convertible in the United States, and this kind of car disappeared from the streets. Iacocca has a unique eye, seeing clearly the changing law of automobile modeling "the high shore is the valley, and the deep valley is the mausoleum", and touching the fashion trend that Americans want to take the convertible again to "relive the old dream". Iacocca boldly decided to reproduce the convertible. 1982 "dodge 400" new convertible was the first to go on the market, and the sales volume was very good after it was put on the market. At first, it was estimated that 3,000 vehicles could meet the demand, but I didn't expect to sell 23,000 vehicles in one breath. GM and Ford followed closely. For the first time in many years, Chrysler walked ahead of others, and Iacocca felt extremely proud.

Third, constantly change color varieties and strive to improve product quality. The key to product management lies in "innovation". In the new automobile products, it is generally divided into two categories: market type and technical type. The new products on the market are mainly transformed in the aspects of overall design, body modeling and decorative color. Less money, short cycle, quick results. Iacocca sized up the situation, did what he could, and focused on developing new products in the market. Therefore, it is decided to take the high-speed fuel-saving long car with front wheel drive as the basic mode, and strive for the production route of integration of basic parts and diversified models. As a result, the investment is not much, but there are many colors and varieties, which makes customers come in droves and choose as many as they like. On the other hand, Iacocca has always attached great importance to product quality and adopted three effective measures: First, the electronic computer and test instrument center was established with an investment of 6.5438+0.8 million US dollars, which gradually changed from manual design to all computer design work, greatly improving the design quality. First, it cost 1 100 million dollars to rebuild the old factory building and install the engine from the roof to the bottom of the car, which significantly improved the installation quality. According to the car inspection report of 1978, the possible maintenance cost of the car driven by the company has dropped from $358 four years ago to 157. According to the statistics of 1983, only 7,000 Chrysler cars were written off by customers, while 1.2 million general motors and 1.6 million Ford cars were written off in the same period.

Fourth, make full use of the role of advertising and expand its influence. Because of Chrysler's "bad name" in previous years, people are always skeptical about its new products. To change this situation, we must rely on advertising public opinion. In order to leave a brand-new impression on the public, Iacocca resolutely dismissed the qualifications of two advertising agents who had been employed for many years, and hired a leading figure in the advertising industry-"Yikai" advertising company at a heavy cost. This company has lived up to high expectations, and its advertisements are vivid and wonderful. Chrysler emphasizes "highlighting individuality" in its advertisements, and does not engage in "one-pot cooking" to avoid similarities, and strives to make each brand of car form its own unique personality and distinctive features in the advertising market.

Fifth, flexibly determine the selling price and attach importance to after-sales service. In order to consolidate and expand the market, Iacocca has formulated the first administrative plan in the company's history, and implemented a special price strategy of high quality and good price, low quality and low price, ups and downs, and flexibility. At the same time, in order to stimulate sales, consolidate and expand our product market, we will do a good job in after-sales service. The company never engages in the business of "refusing to pay after leaving the store". It not only ensures the quality and service life of products, but also provides warm and thoughtful warranty service at any time. They set the car's warranty period at five years and the journey was 50,000 miles. This kind of free long-term after-sales service is unique among big automobile manufacturers.

Iacocca was ordered to carry out drastic reforms, and finally the company survived in a few years, showing a thriving scene: 1980, the company turned losses into profits, 1982, profits11700,000 US dollars, and short-term debts13 billion. 1984 earned $2.4 billion.

In view of this, Iacocca himself suddenly became a hero in the hearts of Americans. From 65438 to 0983, Iacocca led by an absolute majority in the poll of "Best Corporate Executives" in the United States. 1In April, 984, his portrait appeared on the cover of Time magazine. The title is: "He said a word, and all countries in the United States are all ears!" 1984 February, Iacocca's biography was published in the United States. After its publication, the book was immediately listed as an American bestseller with a circulation of 2.6 million copies. In Japan, Iacocca sells 200,000 copies every month. Iacocca is the best seller in London. Saudi politicians regard Iacocca as a must-read for managers. In this regard, the governor of Michigan said: "Iacocca is the most respected entrepreneur in the world." In the first two months of 1985, Iacocca was invited to give lectures by different organizations of 1270. At Chrysler, all blue-collar workers have reached the level of loyalty to Iacocca, and thousands of Americans have written to him asking him to run for president.