Tuesday, March 19, 2002

Charles V. Tines / The Detroit News
Former automotive czar Lee Iacocca takes a spin on an electric bike outside his Los Angeles home. Iacocca broke his silence in an exclusive interview with The News.

EXCLUSIVE REPORT: Iacocca on the record
Iacocca peddles new sets of wheels
Ex-Chrysler CEO promotes line of electric bikes, cars
By Bill Vlasic / The Detroit News Copyright 2002 The Detroit News

Charles V. Tines / The Detroit News

Iacocca offers an electric vehicle for sale on the cover of the Hammacher Schlemmer catalog.
About This Series Only in The Detroit News

Sunday: Former Chrysler Chairman Lee Iacocca believes he can help revive the struggling automaker as a senior adviser or corporate spokesman, but DaimlerChrysler AG Chairman Juergen Schrempp has blocked his return to Detroit.
Monday: Iacocca gives his views on the current state of the U.S. auto industry, including Ford Motor Co.'s struggles and General Motor Corp.'s resurgence, and discusses why he walked away from a promising political future in Washington.
Today: Iacocca has seen the future and says it has a green tint. That's why he is building EV Global Motors, a company that makes small, electric-powered vehicles designed for gated retirement communities and campus-like environments.

Charles V. Tines / The Detroit News

Life as a small entrepreneur has been a revelation for Iacocca, showing a folding electric bike, a man who headed a top 10 U.S. company and once ranked as the country's highest-paid CEO.

LOS ANGELES -- A local reporter in southern California made the mistake recently of asking Lee Iacocca if his work with electric vehicles was penance for polluting the air during his 46-year automotive career.
  What was my sin? Iacocca snapped back. I don't apologize for anything. I built jobs and wealth and I'm proud of it.
   But even as he defends his past as chairman of Chrysler Corp. and president of Ford Motor Co., Iacocca puts in long hours peddling his vision of the future: electric-powered bikes and cars for warm-weather retirement communities and campus-like environments.
  Has Iacocca, at age 77, suddenly turned
  Not exactly.
  If you think I spent nearly 50 years trying to put a minivan and a Jeep in every garage and now I'm working to get them out, you're out of your mind, he said in an exclusive interview with The Detroit News. No, these vehicles are complementary to a lifestyle.
Iacocca makes no secret of his desire to return to the car wars as an adviser or spokesman for Chrysler, which was bought in 1998 by German automaker Daimler-Benz AG.
  But his appeals for a comeback have been rejected by DaimlerChrysler AG's chairman Juergen Schrempp.
  Yet despite his retirement from Chrysler in 1992, Iacocca has never truly exited the business of putting America on wheels.
  He founded EV Global Motors Co. five years ago to market electric bicycles and branched out last year with Lido Motors USA, a partnership that builds so-called neighborhood electric vehicles, or NEVs.
The fiberglass-bodied, battery-powered Lido -- a play on Iacocca's given first name -- is a street-legal, emission-free car with a top speed of 25 miles per hour and capable of running 40 miles on a single six-hour charge.
  While it looks like an oversized golf cart trapped in a car body, the Lido is hardly a toy. The National Highway Traffic Safety Administration (NHTSA) created the NEV as a new class of motor vehicle in 1998, and major automakers are counting on NEVs to help them meet tough new emission standards in California and other states.

  For Iacocca, electric vehicles represent a natural progression in meeting the transportation needs of aging Americans. From the Ford Mustang in the 1960s to the Chrysler minivan in the 1980s, Iacocca always kept his finger on the pulse of the baby-boom generation.
  You've got to stay with your market, and I always said I followed the baby boomer," he said.

The baby boomer who was in his 20s fell in love with the Mustang. Twenty years passed and that's when the minivan comes out. I never got a letter saying, 'I'd like a minivan.' But when it came out, it was a phenomenon.
  With graying boomers now moving in increasing numbers to gated retirement communities in the Sunbelt, Iacocca senses another seismic shift coming.
People are retiring early," he said. When you retire the first thing you do is dump your third car because the kids are gone. There are 15,000 gated retirement communities where you don't need an extra car."
Ever the salesman, Iacocca pitches NEVs as the ideal vehicle for short commutes or shopping trips. But he knows that weaning consumers from gas-powered cars won't happen overnight.
  His experience with electric bikes has, so far, been an uphill climb.
You have got to create awareness and educate people, he said. "In the last three years I probably sold 80-to-90 percent of every electric bike sold in the world. So I've got market share. But guess what? There's no market. You've got to create it."
  It's hardly a hobby for Iacocca. He travels constantly to drum up investors and media interest, and manages his small companies with the same attention that he was renowned for at Chrysler.
His employees, for their part, are as used to his late-night phone calls and surprise office visits as Chrysler executives once were.
  Lee really is hands-on, said Irene Di Vito, Lido Motors' vice-president of marketing. I always say he loves noise, and thrives on work. The only difference is when he pushes a button, 30 people don't appear.
  Life as a small entrepreneur has been a revelation for the man who once headed one of the top 10 U.S. companies and ranked as the country's highest-paid CEO.
Start-ups are tough, he said. I'm managing two little companies from 30 feet instead of 30,000 feet. At Chrysler, if you had five bad people they couldn't wreck the company. Now if you have 20 people in total, two bad ones can wreck the company.
  So he pours over balance sheets, inspects suppliers, and keeps close tabs on his production partner, Western Golf Car, that manufactures the Lido in a factory near Palm Springs. Every so often, Iacocca's legendary impatience boils over at the laid-back lifestyle of his adopted home state of California.
  I often kiddingly say that the United Auto Workers wanted a four-day work week for five days pay, he said. In California, they invented it. Maybe there is something to those Midwestern values. They like to work in the Midwest.
  Iacocca suffered a setback two years ago when he linked up with another company, Global Electric Motorcars (GEM) of North Dakota, to build demonstration versions of the Lido. But in a bizarre episode, DaimlerChrysler bought GEM and left Iacocca out in the cold.
  His new partner is slowly cranking up production. While Western Golf Car has manufacturing capacity of 20,000 vehicles annually, the launch is painstakingly slow -- only 13 NEVs a day.
Still, the first Lidos are slowly garnering attention in the bellwether electric-vehicle market of southern California. Equipped with NHTSA-mandated safety glass, seat belts, hydraulic brakes and headlights, the Lido is available in two-seater and four-passenger versions, including a funky runabout that looks like a little station wagon.
  With the Lido selling for just under $10,000, Iacocca knows that costs have to come down for it to have any mass appeal.
  But he isn't daunted. On a sunny day last month, he hopped on one of his bikes for a spin down the driveway of his Los Angeles home, chattering the whole time about the wonders of electric transportation.
  Later, he retreated to his wood-paneled office to gather up pictures and brochures of the Lido. On the wall were dozens of framed magazine covers -- Newsweek, Time, Fortune and Business Week among others -- from Iacocca's glory days in the auto industry.
  After looking through a stack of papers, he pulled out the latest catalog from the luxury-goods retailer Hammacher Schlemmer. On the cover was Iacocca, standing proudly next to the Lido.
  Finally, he said, I made a cover that's important.

You can reach Bill Vlasic at (313) 222-2152 or

Charles V. Tines / The Detroit News
Iacocca founded EV Global Motors Co. five years ago to market electric bicycles and branched out last year with Lido Motors USA, a partnership that builds so-called neighborhood electric vehicles.