In the Drivers' Seats

Detroit's auto leaders represent an American melting pot. General Motors Chairman Thomas Aquinas Murphy is of Irish descent; Ford Chairman Philip Caldwell has an English background; Chrysler Chairman Lee A. Iacocca's parents were Italian immigrants; and United Auto Workers President Douglas Fraser was born in Scotland. Just as various as their backgrounds are their strongly argued views about the current state of their industry and its future.

Thomas A. Murphy, 64, has headed the second largest U.S. industrial corporation since 1974. During his tenure, GM moved aggressively to design and build Detroit's most successful line of fuel-efficient cars. Murphy will retire at the end of the year, when he reaches the company retirement age. Says GM's boss: "We can't sit back in the U.S. any more and say that we're the high and mighty who don't have to worry about what's going on in other areas. We used to look at the world as if this were our market and think that the international market was some place else. That isn't the way it is.

"We're going to have to concern ourselves with capital investment: how we attract it and how to make the individual investor come to the feast. To some degree, we're going to have to re-examine tax policies and trade relationships.

"The competition today is not just GM against Ford and Chrysler. It's all of us against all the world's auto producers. In addition, it's us against all the other ways that people can spend their money--a vacation or a swimming pool. Like it or not, automobiles represent a deferrable purchase.

"We used to talk about a small car as being something on a 111-inch wheelbase or smaller. There are now a lot fewer above that standard, and a lot more below it. And probably by the mid-'80s, by that definition, there won't be any big cars left at all."

Philip Caldwell, 60, has been chairman of Ford Motor Co. since the retirement of Henry Ford II last March. A 1942 graduate of the Harvard Business School, he has been with Ford for 27 years. During the early 1970s, Caldwell ran Ford's highly successful overseas operations. Says Ford's boss: "We cannot afford to let our basic industries atrophy, while we become more and more dependent on overseas sources of supply all the time. It just doesn't wash. It is essential that we get on with the business of not only retooling the auto industry but also retooling America.

"The trade assistance that the industry has discussed with the Government has been a plea that the country consider its own self-interest. We certainly don't have in mind asking for Government financial help. If we have the right environment, we see no reason why we shouldn't be able to thrive in this country as we have in the past.

"Nobody today seems to be paying any attention to the energy supplies of the future. I think it's quite clear that as long as we have something that operates on wheels--whether rubber tires or anything else--we're going to need a fuel to power it. We had better get on with the business of getting alternate sources of energy."

Lee Iacocca, 55, is the auto industry's most colorful and controversial top executive. A blunt-talking salesman who sells the sizzle as well as the steak, Iacocca spent 32 years at Ford Motor. He launched the successful Mustang in 1964 and was company president for nine years. In 1978, however, Henry Ford II abruptly fired Iacocca, reportedly with the explanation: "I just don't like you." Iacocca then moved across town and soon became chairman of Chrysler. He has been the chief negotiator of the company's $1.5 billion Government-guaranteed loan. Says he: "Government officials make it sound so easy: just retrain everybody. When one industry gets hurt by this avalanche of Japanese cars, you switch them all to washing cars. This isn't the jelly-bean business. What if, God forbid, we go to war, and we're fighting the guy who's been supplying us with all the trucks and tanks? Do we rent them from him?

"There are some things the Japanese have that we can't imitate. Their inventories come from plants that surround their auto plants. Ours come in on rail cars from South Carolina. But we can learn from the way they plan their business; the way they don't have labor-management squabbles; the way they can stop the line when there's something wrong with a car.

"I think the consumer is in for a little bit of a jolt when he sees the retail price increases this fall. But we've got to start to get some of the $80 billion investment back."

Douglas Fraser, 63, has been the leader of U.S. auto-workers since 1977. Born the son of working-class parents in Glasgow, he came to Detroit when he was six. Fraser began his union career in 1935 while loading fenders for Chrysler in a De Soto plant. Though an avowed Western European-style socialist, he is also a member of the Chrysler board of directors. Says the union boss: "Before I went to Japan last spring, I asked the president of Volkswagen of America if I could still say the quality of Volkswagens built in Pennsylvania is as good as that of the ones built in West Germany. He said I could go one further than that and say that they were better.

"It might well be that people in Washington have never been close to unemployment like we have. Suppose a laid-off autoworker goes home to his wife and says, 'Don't worry about it. We have preserved the sacred principle of free trade.' She'd probably throw him out of the house.

"Philosophically, I'm a free trader. But we've never been confronted with this situation in which we have this sudden infusion of imports. The automobile industry, despite all its mistakes, should be given some breathing room until the 1983 model year. It will take the industry that long to get the four-cylinder engines and transmissions that we need. It can't be done any quicker.

"The current generation of American small cars is vastly superior to the Ford Pinto and the Chevrolet Vega. The American public now views the car as they should have years and years ago: as an instrument to get you from one place to another."

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