Where Have All the Leaders Gone? (16 page)

I
t occurs to me that one reason we’re having so much trouble competing in the global economy is that we’re spending too much time, energy, and money fighting with each other in
this
country.

America has the distinction of being the most litigious society on earth. We sue each other at the drop of a hat—or at the drop of a hot cup of coffee. About 90 percent of all civil actions tried before juries in the whole world are tried right here in the U.S.A.

Our courts are jammed, and it’s no wonder, because so many people are looking to the courts not just to dispense justice, but to redistribute wealth. I don’t think that’s what the framers of the Constitution had in mind when they gave us our wonderful system of justice.

Some of the wacky lawsuits you read about are pretty funny. Like the burglar who fell through the skylight and tried to collect damages from the owners; or the college students who sued their school because they’d been promised a course would be easy and it was hard. These stories belong in
Ripley’s Believe It or Not.
They are more of a distraction than anything else.

It’s the serious lawsuits with awards in the millions and even billions that choke you up. They have squeezed decent companies dry, frozen competition, and cost the taxpayers countless billions in the costs of running civil courts.

TAKING RISKS ON THE ROAD TO SUCCESS

America’s ability to compete is directly tied to the lawsuit frenzy. You see, the first thing you have to do in order to compete is take a risk. If you can’t afford to take a risk, you can’t afford to compete. As Americans, we’ve always pictured ourselves as daring and entrepreneurial, but today we’ve grown so litigation-obsessed that nobody wants to take risks anymore.

There used to be eighteen companies making football helmets in this country, but now hardly anyone does. Too risky. Maybe they’re a little unnerved by what happened to Riddell Sports. After an eighteen-year-old boy suffered brain injury during a football game, his parents sued the helmet manufacturer for damages, and won $14.62 million. They never actually proved that the helmet was defective. In fact, the medical experts suggested it was a preexisting brain condition. But the jury handed over the money anyway.

We’ve virtually stopped making light aircraft in America. The biggest production cost is the liability insurance.

One of these days we’re going to wake up and say, “The hell with it. Competing is just too risky.”

Meanwhile, the competition is killing us. Other countries don’t spend their time looking for Mr. Deep Pockets. They’re too busy beating our brains out in the marketplace. The biggest damage award ever in the history of Great Britain was a little over a million bucks. That’s practically a nuisance suit over here!

The Japanese don’t even bother with court. They’ve got about as many lawyers in Japan as we’ve got Sumo wrestlers here.

Without competition, you don’t have innovation. Forget about progress. Nowhere is this clearer than in health care. If you’re a drug company, you might not want to mess around with actually finding a cure for a common disease. Too risky. Ask Merck. Conservative estimates put the litigation potential for Vioxx, the popular arthritis drug that may have triggered heart attacks in a few users, at $50 billion.

And forget about developing a new vaccine for, say, avian flu. Why get into that can of worms (no pun intended)? Vaccines are particularly vulnerable to litigation, so if you’re a drug company, you might decide to spend your R&D budget on something safer—like growing hair (although you might be in trouble if the hair grew on a guy’s feet instead of his head).

The real cost of litigation is that new doctors are avoiding certain important specialties—obstetrics, neurology, emergency room—like the plague. Insurance costs too much.

You might be thinking, Well what do you expect from a guy who spent his life in the car business? But I’m not averse to all litigation. If a company or individual has been negligent or has shown reckless disregard for safety, he should pay for it. But I’m afraid that we’ve reached a point where we’re not just punishing gross negligence. We’re punishing people who take normal risks that can’t be avoided when you produce almost any kind of product.

When we do that, we’re punishing ourselves. We’re wrecking our ability to compete. We’re stomping out progress.

REVENGE IS NOT SO SWEET

Punitive damages are the place where lawsuits really go overboard. It’s one thing to compensate victims for their physical and monetary losses, but punitive damages are out of control. Juries get swept up in the emotions of a trial, and before you know it they’re writing fifty-million-dollar checks.

With punitive damages, people can get awards up to triple their damages, based on a very subjective notion of pain and suffering. Most of the world has never even heard of punitive damages. It’s a very American idea. So is the system of contingency fees in big civil action cases, which allows lawyers to win the lottery when their clients collect. It’s an insane system, and when people talk about tort reform, they’re talking about bringing it back into a zone of reality—applying some common sense to the way compensation is awarded. This is very hard for Americans to grasp, because we’re seduced by big jackpots.

Maybe the real issue is what we value as a society. Why do we find it so easy and satisfying to hand over staggering amounts of money to a single individual who has suffered pain or loss, but hold back when it comes to showing compassion toward a community upended by natural disaster or economic blight?

It’s something to think about.

NO-FAULT LIVING

There’s such a thing as being too safety conscious. I remember some years ago being at a party at the home of Lee Annenberg, wife of the late publisher Walter Annenberg. I was seated at a table with Lady Sarah Ferguson, who was then married to Prince Andrew. At one point, Fergie jumped up and said, “This party is pretty
dull
. Let’s dance.” I’d never danced with a duchess before, so I said I’d be delighted. Fergie and I started to jitterbug to a fast number when all of a sudden a very British-looking guy came out of nowhere and tapped me on the shoulder. At first I thought he was cutting in, but he said, “Sir, I am Lady Ferguson’s traveling gynecologist and she is with child. If you must dance, please do so by sliding your feet gently across the floor, rather than bouncing the lady up and down.”

I gaped at him, but Fergie just gave him an annoyed look and said, “Hey, why don’t you buzz off?” We kept on dancing, but at a slower pace. I didn’t want to be party to creating an international incident.

Later, I laughed at how excessively cautious the Brits were. I’m sure Fergie gave her keepers heart failure many times. She wasn’t a “safety first” kind of girl.

But the truth is, we don’t live in a risk-free world, and we never will. We’re mere mortals, and, yes, bad things
do
happen to good people. We get sick. We have accidents. We are disappointed. Things don’t always work the way they’re supposed to. So, what do we do? We look for someone to blame. The new American way is: “If something bad happens, somebody has to pay.”

There was a time not that long ago when we were more civil. We gave people the benefit of the doubt. We tried to work out our differences face-to-face, not through lawyers. We’d tell people to “have a nice day.” Now we say, “I’ll see you in court.”

It’s not just our ability to compete that gets harmed by all the litigation. It’s our ability to live with one another, to help each other out in bad times, to cooperate because we want to and because it’s the right thing to do—not because we might get sued.

I’ve had a lot of time to contemplate this matter, having spent my career in the car industry. Automobile-related damages account for half of all the civil lawsuits in this country, and for half of all the compensations paid. Whenever there’s a serious accident, the automakers end up with a liability suit, whether the
car
had anything to do with it or not.

I spent most of my career trying to find ways to make cars safer. I was involved in creating the interlock seat belt system. If your seat belt wasn’t hooked up, the car wouldn’t start. The House of Representatives shot that down in a hurry. They thought it was too intrusive on the part of the federal government. But at least every state now has some kind of law mandating seat belt use.

Cars today are built for safety. Not just the air bags, rollover bags, and crush zones, but also the way steering wheels are designed with controls at your fingertips. We decided that when you’re driving a four-thousand-pound piece of iron at fifty to seventy-five miles an hour, it’s a good idea to keep your hands on the wheel. Which, by the way, Californians notoriously don’t do. As Red Buttons once said, “All you need to qualify for a driver’s license out here is a middle finger.”

But the greatest safety challenge of all is changing the way people behave when they’re behind the wheel. And what really gets me about all the litigation is that it takes the idea of personal responsibility right off the table.

In 1980, when I was new at Chrysler, a woman named Candi Lightner started an organization called Mothers Against Drunk Driving (MADD). Candi’s thirteen-year-old daughter had been mowed down by a drunk driver while walking down a country road. Candi was devastated by the death of her daughter, but when Candi found out that half of all fatalities were caused by drunk drivers, she was, well,
mad.
Candi’s organization, MADD, has saved hundreds of thousands of lives since its start.

Now I’d like to see another organization formed. Let’s call it Mothers Against
Distracted
Driving. Distraction is what kills people on the road today.

Morning drive time can be hazardous to your health. You’ve got someone in a five-thousand-pound SUV, juggling a hot cup of coffee, while using the vanity mirror to apply lipstick. You’ve got someone else in a four-thousand-pound sedan jabbering on a cell phone while lighting a cigarette. You’ve got a third person in a three-thousand-pound minivan trying to read the instructions on the navigation system, while catching the morning scream-fest on talk radio and the sibling scream-fest in the backseat. And someone else is zipping in and out of traffic in a sporty coupe, while getting stock quotes on his cell phone and eating an egg sandwich.

Is anyone watching the
road
?

I know that Mothers Against Distracted Driving would be a hard sell. People don’t like interference. I also admit that I inadvertently contributed to the distraction problem by designing the first cupholders and driver-side vanity mirrors.

Of course, I realize that there’s no test for distraction like there is for alcohol, so it would be kind of hard to enforce any kind of regulations. But maybe car companies could limit the technology a bit. Just because it’s possible to hook up video screens in cars, it doesn’t mean we have to do it. I’d like to propose that we strictly limit
all
video in the front seat.

Regulations only go so far. We could all vow, on our own, without a single law, to get behind the wheel, place our hands at the two o’clock and ten o’clock positions, face forward, eyes on the road—and drive with all due respect for that big hunk of iron. We can do it for ourselves, and for our children, and for the countless strangers whose paths we cross. Respect for others, responsibility for ourselves and others—these are basic tenets of a civilized society. Why don’t we take them out for a spin?

Y
ou don’t have to be a genius to see that a nation full of overeating, pill-popping, TV-watching, iPod-wired, shopaholic, attention-deficit-disordered people is not going to make it. We could be headed for extinction if we don’t watch out. And if we really
do
aspire to be great again, we’ve got our work cut out for us.

If this is the price of success, I’d rather lose.

I want to talk about a few of the things I’m experiencing these days that disturb me about our culture. These are more than just pet peeves. In many ways we’ve lost our compass, and we don’t know whether we’re coming or going. Leadership isn’t just a matter of putting someone at the front of the parade—unless you’re a
lemming.
All of us have to develop leadership qualities and nurture them in our children. Qualities such as responsibility, accountability, discipline, and community spirit.

GARBAGE IN, GARBAGE OUT

Sometimes I wonder if we’d be better off with less success. Maybe our minds are getting a little warped. We have five hundred TV channels, plus the Internet. Too much TV, too much Internet, too many e-mails. I’m not knocking computers, but as the saying goes,
garbage in, garbage out.
Do you ever stop and think about how you’re actually benefiting from this brave new computer world? I made the mistake of giving my cousin my e-mail address. This guy loves to tell jokes. He sent me fifty-three jokes—all dirty. Who has the time—or the interest?

Our society is the most affluent in the history of mankind. Nobody ever had it so good, and yet all you ever hear about is how depressed everyone is, how anxious, how nervous. What’s going on? I’d like to see the statistics for how many other countries in the world are being plagued by similar ills. I wonder how many Japanese and Chinese kids are being treated for ADD/ADHD.

Isn’t it time for us to admit that we’ve become a pill-pop-ping society? We think there’s a little blue or white or pink or yellow pill for whatever ails us, and the drug companies are even selling direct to the customer big time. “Ask your doctor if [fill in the blank medication] is right for you.” If we’re not careful, we’re going to medicate ourselves right out of being.

THE ISSUE THAT EATS AT ME

Sometimes the dichotomy of my life gives me the bends. One day I’m trying to do something about fat kids dying in America, and the next day I’m trying to do something about malnourished kids dying someplace else. What’s wrong with this picture? People in Darfur are starving to death, and we’re eating five thousand calories a day of fast food. Are we nuts?

I told you about my work with Nourish the Children. Most of my energies for the past twenty-two years have gone to my foundation, whose mission it is to find a cure for diabetes. I started the Iacocca Foundation in 1984, after my wife Mary died from complications of type 1 diabetes. Type 1 diabetes is caused by the destruction of the pancreatic islet cells that produce insulin. It is a devastating disease, and can lead to an early death. I made it my mission to find a cure. The Iacocca Foundation is mostly dedicated to medical research. I hope this work becomes my legacy. We’re lucky to have some smart, highly motivated people running the foundation—starting with my daughter Kathi, who is the president, and Dana Ball, our executive director. My younger daughter Lia is also involved, as a foundation trustee. We’re getting close to a cure, and I still think it may happen in my lifetime. But I’m not counting my white mice before they’re hatched because medical research is a one-step-forward, two-steps-back kind of deal.

The world of medical research has been a real education for me. I guess I shouldn’t have been surprised to find that it suffers from the same kind of leadership malaise we’re seeing in the rest of society. I’m learning that research is a lot like government—kind of a self-generating bureaucracy. You do research so you can write papers to get more funding to do more research to write more papers. This was a big shock to me when I finally figured it out. I said, “Hey, isn’t anyone trying to find a
cure
?”

The most innovative research is often killed during the peer review process. Why? Well, let me put it to you simply: Imagine if every time Chrysler wanted to bring a new car to market, it had to depend on positive reviews from GM and Ford. Are you starting to get the picture?

Let me tell you a little story. In 2001, Dr. Denise Faustman, a longtime Iacocca Foundation–supported researcher, approached our board. Dr. Faustman is an associate professor at Harvard Medical School and a researcher at Massachusetts General Hospital. I happen to think she’s brilliant
and
dedicated, which is a winning combination. Dr. Faustman told us that she had remarkable data from a project funded by the foundation. It was one of those thrilling “Eureka!” moments of discovery in our work. Dr. Faustman had spent eight years trying to identify the source of the autoimmune attack that causes type 1 diabetes. In the process, she identified the bad cells that are responsible for the disease. After eliminating them in mice with drug therapy, she reported for the first time that regeneration of the damaged adult stem cells was possible. Suddenly, there was light at the end of the tunnel. We believed that human trials were not that far away. In 2003, Dr. Faustman published another paper that con-firmed the regeneration project, and that’s when the gloves came off.

Suddenly the diabetes research community was up in arms. Things got ugly. Competing organizations got the word out to donors that Dr. Faustman was a fraud. It was an undignified free-for-all. When we tried to keep discussions focused on science, people acted like angry children, name-calling, and trying to discredit both Dr. Faustman and the Iacocca Foundation. They saw regeneration as a threat, all right. A threat to the
regeneration
of their funding.

It took a while, but the major research organizations eventually came around. Today, even the Juvenile Diabetes Research Foundation admits that regeneration is one of the most promising research directions. But the process was bloody.

The politics of stem cell research is a costly distraction. While everyone is busy fighting about embryonic stem cells, we’re missing a big chance to make breakthroughs with adult stem cells. For the past twenty years, adult stem cells have proven their success. We use them to regenerate bone marrow, blood, and skin. Embryonic stem cells, on the other hand, have never cured a single disease or been used in a single therapy. We don’t even know if they’re capable of it. So, why don’t we go with what we know—
regeneration
—instead of wasting our time debating about some distant fantasy of a miracle with embryonic stem cells? Once again, I have to ask, does anyone out there really want a
cure
?

Sometimes the medical research organizations get so busy raising money and running their bureaucracies that they lose sight of the mission. The National Institutes of Health, funded by our tax dollars, spend billions of dollars a year on diabetes.
You
try to find out where the money goes. And if you do, let me know, because
I
sure haven’t had any luck getting information.

We’ve got to remember that we’re talking about real people here. Diabetes is a terrible disease that basically kills you from the inside out. Watching Mary die was a slow, agonizing process. Nothing could stop the progress of the disease, and the worst part for me was that overwhelming sense of helplessness. Mary was only fifty-seven years old when she died and she suffered terribly.

Mary didn’t live to see her two gorgeous daughters get married. She never had a chance to know her seven grandchildren, or to see them growing into the kind of adults she would be proud of. If I can do something to keep this tragedy from happening to another family, I’m going to give it my all.

A NEW EPIDEMIC

What has been discouraging is that even as we’ve made progress in research on type 1 diabetes, there is a growing epidemic of obesity—especially childhood obesity—which leads to type 2 diabetes, a condition that prevents the insulin-producing cells from functioning normally. The Centers for Disease Control and Prevention estimates that one out of every three American children born in 2000 will develop diabetes in their lifetime. How do you start fixing
that
problem?

Well, first you have to ask why it exists in the first place. When you get to the core of the problem you find that it’s behavior-based, which is the toughest challenge of all. Most type 2 diabetes can be attributed to obesity and a sedentary lifestyle, which cause insulin resistance. More than sixty million Americans are obese, and the number is growing, right along with the waistlines.

Some researchers are working on a magic pill so you can eat all the crap you want and not get fat. Others are talking about gastric-bypass surgery as a therapy for type 2 diabetes. In other words, we’re still looking for the instant fix. We want to stay fit and trim while stuffing ourselves in front of the TV, instead of exercising and eating right. Listening to people talk about getting their stomachs stapled as a cure for obesity is one of the most depressing things I’ve ever heard.

The Iacocca Foundation, whose original mission has been to find a cure for type 1 diabetes (insulin-dependent), has now had to spend more money to address type 2 diabetes. It’s naïve to think there is a quick fix. We’ve got to face up to the truth: We created this problem by indulging our desire for instant gratification. Instead of using our heads and our God-given free wills and intellects, we’ve reverted to our basest natures. I call it the goldfish principle. If you’ve ever had goldfish, you know what I’m talking about. You have to regulate how much of the fish food you sprinkle in the tank every day. If you pour too much in, the goldfish will keep eating until they literally blow up. They don’t have a signal that says stop. It sounds an awful lot like twenty-first-century America.

HOPE TAKES WORK

I’m still learning that there is no such thing as
easy
when it comes to accomplishing big goals. A couple of years ago, when we realized that we’d need $11.5 million to get Dr. Faustman started on a human clinical trial, I said, “No problem. I can raise $11.5 million in a heartbeat. All I need is myself and ten other rich guys.” I plunked down my million dollars and started calling my friends. I didn’t get too far, although I am thankful for a good friend who anonymously joined me at the $1 million level and to many others who contributed. But I realized that my friends had their own causes. I had to remind myself once again that the important stuff is never easy.

What did I do? I returned to the playbook I used to raise money for the Statue of Liberty–Ellis Island Commission. I went to the people. We started a campaign called Join Lee Now, and asked Americans for small donations. They came pouring in—the average gift is $75—and since the beginning they have contributed more than $2 million.

Then I got
really
creative. I made a deal with Chrysler to film four commercials for $1.5 million, with the money going to the foundation. As part of the deal, Chrysler and its dealers agreed to donate one dollar for every car they sold between November 2005 and December 2006, and they raised $3 million.

The commercials were part of a campaign to woo young buyers to Chrysler. The one that got the most attention paired me with the hip-hop icon Snoop Dogg. It was called “Golfing Buddies,” and they put us on a golf course in a souped-up golf cart during the shoot. It was 102 degrees that day and the shoot took almost eight hours.

Snoop Dogg seemed like a nice kid, but I never understood a word he said.

I got a kick out of how Chrysler used my famous pitch line from the eighties—“If you can find a better car, buy it”—and translated it into Snoop Dogg–speak: “If the ride is more fly, then you must buy.” What I’ll do for the cause!

I still enjoy a challenge, and I always feel as if I get back more than I give. That’s what I’d like to pass on to the younger generation—the rewards of being involved. I’ve started with my own grandkids. I want them to know how
lucky
they are to be in a position to give back—because they have been
given
so much.

I’ve been heartened lately to read that young people are getting involved in volunteering again. The “9/11 generation” experienced a jolt of reality, and their response has been to reach out. Applications for the Peace Corps are at record levels. I hope the trend continues. Who wouldn’t want to live in a country whose leaders have altruistic, charitable hearts? In the race to determine who will own the twenty-first century, I’ll place my bets on the givers, not the takers.