In 1979 Chrysler Chairman Lee Iacocca was best known for persuading Congress to put up $1.2 billion to bail out his ailing car company. My, how things have changed. Instead of begging for dollars, Iacocca has become a best-selling author, and Chrysler has racked up eight quarters of record profits. Last week Iacocca offered further proof of Chrysler's comeback by announcing a reorganization that will allow for greater flexibility and future expansion. The company will be split into four parts: autos, finance, technology and aerospace. An umbrella organization, headed by Iacocca, will oversee all operations and is expected to be set up as a holding company based in Manhattan. Chrysler Vice Chairman Gerald Greenwald, Iacocca's heir apparent, will become chairman of the automobile wing.
Relocating to New York City would put Chrysler closer to the banking and financial communities. It would also put Iacocca in the same city as his fiancée Peggy Johnson and the Statue of Liberty renovation project, which he chairs. Iacocca already spends much of his time at his New York office. Furthermore, despite his denials, Iacocca is rumored to be considering a run for the presidency, and a move to the East Coast would place him nearer the center of national political action.
SEVERANCE PAY Bergerac's Golden ParachuteMost people who lose their job receive a final bonus based on the length of time they have been employed. For some this severance pay permits a more comfortable retirement. In the case of Revlon Chairman Michel Bergerac, 53, losing a job was probably the best financial deal he ever made. Last week Bergerac resigned as chairman after Pantry Pride won a three-month fight to control the company. He and eight Revlon board members had agreed to step down to allow for a trouble-free transition to the new owners. Under an agreement worked out with Revlon's board of directors two years ago, Bergerac will get a parting package worth about $35 million in cash, stocks and stock options. This is believed to be the biggest of the so-called golden parachutes ever paid.
In the last year before the takeover, Bergerac made $1.3 million. Wall Streeters say he earned his salary. He diversified Revlon away from cosmetics and into the health-care business, acquiring companies that made such popular products as Turns antacids and Oxy acne medicine. Bergerac now plans to play tennis and spend time with his family before examining several job offers he has already received. He will not need to choose one too quickly.
AIRLINES A Pair of Jumbo DealsIt was an eventful week for United Airlines. In Washington, Transportation Secretary Elizabeth Dole approved the Pacific routes that United bought from Pan Am in April for $750 million. And in Chicago, United announced that it was buying 116 planes worth $3.1 billion from Boeing. Included on United's shopping list were six jumbo 747s and 110 small Boeing 737s, which are used for shorter hops. Some of the 747s are specially equipped to carry 400 passengers and fly a range of 8,000 miles, ideal for flights across the Pacific.