Where Have All the Leaders Gone? by Lee Iacocca

Author:Lee Iacocca [Iacocca, Lee]
Language: eng
Format: epub, mobi
Publisher: Scribner
Published: 2007-04-16T22:00:00+00:00

A SIMPLE BUSINESS LESSON

In business, the budget-cutting process is pretty simple. You get your key people in a room and you say, “Sales are down, and costs are up. We’ve got to cut ten percent out of the budget. Come back tomorrow and tell me what you’re going to give up.” And everyone looks miserable, but no one says, “Boss, we can’t do it. We need to spend ten percent more than we’re taking in.”

In business, people get it. If a company spends more than it earns, it goes belly-up. In government, it’s all smoke and mirrors. It’s Alice in Wonderland down the rabbit hole.

I’ll tell you one thing. Any businessperson who has to meet a payroll every week learns the value of money pretty fast. I’ll never forget how I learned that lesson the hard way at Chrysler. It was shortly after I’d joined the company, and I was beginning to get a terrible feeling in my gut that we were in big trouble. One Friday morning I asked my CFO, Jerry Greenwald, how much real cash he could lay on my desk by five o’clock that afternoon. He said, “About a million, give or take.”

Only a million? Then I asked him, “What’s our payroll every Friday?” He said, “About two hundred million, give or take.”

That’s when I knew we were bankrupt. When you’re responsible for meeting a weekly payroll, money gets real pretty fast. Unfortunately, the government seems to have lost all sight of this. I learned that, too, when I tried to pay back Chrysler’s government loan.

I went to the White House to deliver the $1.2 billion check to President Reagan. In the Oval Office, I explained to the President that the check was a fake. “No one has ever paid back the government before,” I explained. “They said it would take about thirty days to figure out who it should be written out to.”

President Reagan laughed hysterically, slapping his knee. “You’ve got to be kidding me,” he said. “That’s what’s wrong with the federal government.” In other words, there were no IN baskets, only OUT baskets. With Reagan still laughing, I put a hold on the check, and kept the $10 million of interest it generated in a month.

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