Greenwald Lured Fro Chrysler by Challenge of UAL Buyout

Article excerpt

DETROIT - When Lee Iacocca hired Gerald Greenwald to help him rescue Chrysler Corp. from collapse, it began with a discreet phone call to Greenwald's home in Caracas, Venezuela, where he worked for Ford Motor Co.

More than a decade later, a similar secret offer confronted Greenwald again. Only this time, a UAL Corp. union coalition was making the surreptitious contact, luring the Chrysler vice chairman with the job of leading its effort to buy the airline company for $4.5 billion.

United Airlines Inc., a subsidiary of UAL, is considering Will Rogers World Airport in Oklahoma City as the site for a proposed $500 million maintenance center. Will Rogers Airport also is under consideration for a $200 million aircraft maintenance center for Northwest Airlines.

Why Greenwald vacated Chrysler, especially at a time when its financial health again appears to be sliding dangerously, may be debated for a long time.

Greenwald and people who know him say he was lured away by the enormous challenge of carrying off the UAL buyout, a debt-financed deal that would result in the largest employee-owned company in the country - if successful.

``Here I am having a second chance to go through a major industrial event in American history,'' Greenwald said when he made the surprise announcement May 31 that he was quitting.

Some auto industry people familiar with Greenwald, who spoke on condition of anonymity, said they're skeptical about his chances of assembling the financing needed to purchase UAL, which has seen several earlier buyout proposals fall through. The current climate of tight credit won't make it any easier for him to meet an Aug. 9 deadline for raising the money.

But others said that if anyone can coordinate the UAL effort it is Greenwald. His calm and reassuring manner was critical in winning the confidence of skeptical lenders to Chrysler in the early 1980s and helped convince the federal government to provide $1.5 billion in loan guarantees.

``I could not think of anybody better suited to put together the awesome financial arrangements that the buyers of UAL are trying to do. He has tremendous talent with bankers,'' said Jerry H. Pyle, a former Chrysler executive who now is president of Gulf States Toyota in Houston.

``Mr. Iacocca handled the Feds and Jerry handled the bankers and I'm not sure he didn't have a tougher job than Lee did,'' Pyle said.

In Greenwald's 11-year tenure with Chrysler, he established himself as a careful, deliberate, diplomatic and soft-spoken complement to Iacocca, the scrappy chairman of the No. 3 automaker.

Greenwald is considered largely responsible for imposing the financial discipline that resurrected Chrysler's profitability and made himself and Iacocca wealthy in the process.

The two men could hardly be more different. Iacocca, 65, is a profane, flamboyant engineer and the son of Italian Catholic immigrants. Greenwald, 54, is son of Russian Jewish poultry wholesalers. He grew up in St. Louis, attended Princeton on an Eagle Scout scholarship, rose in the auto industry as a financier and is known to think carefully before making any important move.

``Iacocca was bombastic,'' one former Chrysler executive said. ``Jerry would examine off-the-wall ideas all the way to the obvious. A lot of times he would take the more obtuse direction. He was very much solicitous of the opinions of other people. …