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#11 – Striking Out

by | Jun 9, 2016

Back in the early ‘80s, Toyota sales were very strong. Most domestic dealers had a 90-day supply of cars and trucks in stock. If a domestic dealer sold 50 units a month he would carry an inventory of 150 units in stock. But Toyota dealers in the Denver region had less than a 30-day supply of cars on the ground. This meant that a Toyota dealer in the Denver region had only 25 units in stock while selling 50 a month.


The Toyota distribution system, called “turn and earn,” was set up to replace a car or truck after a dealer had reported the unit as sold. The turn and earn system created intense competition between the dealers to report sales as soon as possible to earn more units and profit. With inventories so low, dealers were selling units before they arrived at the dealerships; however, this also created a climate that encouraged false sales reporting. A dealer could pre-sell a car before it arrived at the dealership, but was not to report a car sold until it had been delivered to the customer. The region had to constantly referee disputes between dealers for false sales-reporting violations. Some dealers would also dispose of units to independent leasing companies reporting them as sold, and the leasing companies in turn would lease these cars to their customers.


The number-one selling dealer in the region was in the Denver metro and the number two was in Salt Lake City. Both dealers were highly respected leaders in the region and nation.  With only 1,000 dealers nationally Toyota was a small enough company that large-volume dealers were on a first-name basis with Togo and McCurry at headquarters.


The competition between the two dealers had turned ugly. The Salt Lake City dealer was a Mormon. He was a leader in his church and would later own the Utah Jazz. The Denver metro dealer was a passionate Christian.  The Salt Lake dealer bought 50 Toyotas from a leasing company in Denver to increase his dealer inventory. When the Salt Lake dealer reported the cars as sold, they were flagged as “previously reported sold” and traced back to the leasing company, and then back to the metro dealer in Denver. 


It would be my decision whether or not to charge back the Denver dealer. This would cost him sales leadership in the region and, equally important, interrupt his flow on cars and have a serious impact on his profits. The dealers in the Denver Region had heard about my priorities in life.


I went to Salt Lake to meet with the dealer. He was a large man with a growing empire of businesses in Utah but was quite open and friendly. But when the conversation turned to the Denver dealer his tone changed. He claimed that he had done nothing wrong and should receive credit for the sales. As I left his office, he looked me dead on and said, “Dave, you know I am in the right.”


When I visited the Denver dealer, he vigorously defended his actions. He had no idea the leasing company would broker his cars to another dealer and insisted he should not be charged back the sales. In addition, he said he had immediately discontinued doing business with this leasing company. When the meeting with the Denver dealer was over, he asked to speak with me privately. We went into the hallway. I stood with my back against the wall.


“You claim to be a Christian,” he said.


I hesitated. “Yes,” I replied, unsure where this was going.


“I hope you are who you say you are because I am also a Christian. If you are a Christian you will decide this in my favor,” he said.


“Thank you, but I need to decide this matter on the facts,” I replied.


He gave me a writhing look and said sternly, “You are being tested by God. I am a fellow Christian. I have done nothing wrong. If Jesus Christ is your number-one priority you will decide this matter in my favor.”


A rising nausea came over me. I prayed for guidance.


Whatever I decided, there would be wide-ranging negative repercussions, and the dealer who lost would call McCurry and complain. I made my decision and charged back the Denver metro dealer.


Proverbs 21:31(MSG) “Do your best, prepare for the worst—then trust God to bring victory.”


I’m not sure if what happens next is because of my decision in the sales dispute or just coincidence, but it would create a crisis in my life that almost cost me my marriage.


(To be continued next Monday in “Transfer Trauma”)