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#34 – 1987: In the Rearview Mirror

by | Aug 29, 2016

The year 1987 was one to remember. Whitney Houston was belting out the song “I Wanna Dance With Somebody” and one of my favorite movies, Hoosiers, was showing in theatres. Ronald Reagan told Mikhail Gorbachev to “tear down this wall” and the European Union was formed. Outside of Seattle, a small coffee shop called Starbucks opened with little fanfare. At the same time, the automobile industry was also going through dramatic change.


Toyota was celebrating its 30th year of doing business in the U.S. and had sold one million units. Gas was only 89 cents a gallon. Chrysler had bought American Motors. General Motors was in the process of starting an all-new car company, Saturn. Two all-new luxury channels were announced, Lexus and Infiniti. The number-one selling car that year was the Ford Escort with 392,360 sales costing an average of $6,895.


But all was not well in the car business. The industry had been steadily growing for the last decade, reaching more than 11 million sales in 1986, but sales had fallen almost 10 percent in 1987. Car and truck sales were down by one million units for an overall industry of a little over 10 million units. With the all-new Lexus, Infiniti, and Saturn entering a shrinking auto market, the competition was going to be fierce and the pressure on management unrelenting. Somebody was going to get hurt, but who?


All was not well at home either. I had been gone for more than 200 days in 1987, but a big part of the absences was because of our relocation. In 1988 I would be gone even more, but it would be all about Lexus. With a new baby and four young boys, the pressure on Cynthia at home was also unrelenting.


But I had no time to notice. There was too much to do. In Japan, Chief Engineer Suzuki and his team of engineers had impossible goals to achieve with the F1 and not much time. The ES 250 engineers were in a crush to get the car ready in time for launch. At the same time the all-new F2 and F3 were in development.


In the U.S. we were running out of time to get the new Lexus channel ready to sell cars. We needed an advertising agency, a marketing plan, auto show displays, a new dealer agreement, a separate allocation and distribution system, U.S. ports of entry and labor agreements, a PR plan, a customer relations plan, data system requirements and accounting procedures, dealer training, service and parts requirements and warranty guidelines, parts packaging, a headquarter building, a headquarter staff, four field offices and the people to work in them, a five-year business plan, and approval by TMC in Japan.


But most of all we needed to find dealers who would invest $5 million in land and build facilities for a Japanese luxury brand without a name and without seeing the car. We had 18 months—only 610 days to get it done. The pressure was on.


“When doubts filled my mind, your comfort gave me renewed hope and cheer.” Psalm 94:19 (NLT)


We had received 1,119 inquiries since the Lexus announcement in August and 526 applications. We were running out of time and needed to select the first Wave 1 dealers.


(To be continued in “Finding Dealers”)