We were expected to pick a new name by March 3 if the Second Circuit Court of Appeals had not yet ruled in our favor. There were three new names: Luxus, Lucidia, and Celsior (the name Chairman E. Toyoda had picked for the car in Japan). We wanted to use a name that started with L, but there was concern that LexisNexis might object to Luxus, and no one liked the name Lucidia. That meant we would probably need to use the name Celsior. We were desperate, and TMC engineers in Japan gave us another week until March 10, 1989
I was in Japan the week of March 6, 1989 conducting preliminary pricing negotiations with T. Uranishi of the North American Department at Toyota World Headquarters. The yen had been appreciating dramatically in value, and the cost of the F1 with all its new technology and increased production costs was climbing out of sight. The original price was to be under $30,000 and now was close to $40,000. The most expensive car Toyota sold in the U.S. was the Cressida that cost a little over $18,000, and we only sold 20,000 a year. How were we to sell 40,000 F1s with no name at $40,000? I argued with Uranishi-san to choose which they wanted: 40,000 sales or a $40,000 price tag. Uranishi-san refused to choose but agreed to go upstairs and ask Dr. Toyoda. I settled back in my chair, smug in the belief I had made a convincing argument and won.
Uranishi-san came back with a broad grin, “Congratulations, we just heard. You won. You can keep the Lexus name!”
I was engulfed in a glorious wave of relief. The court had reversed the lower court’s decision on the Lexus name. The three-judge panel had issued a terse, two-page reversal (3-0) of Judge Edelstein’s decision. The court took the unusual position of issuing the ruling without a full written decision. The grinding struggle had come to an end. I hadn’t realized the toll it had taken on me until it was over.
The Appeals Court ruled that Toyota had not acted in “bad faith” and noted that LexisNexis served only one percent of the general public and advertised only to attorneys through professional journals. The court went on to say that “a reasonable buyer is not at all likely” to confuse the two brands, and therefore “there can be no claim of dilution.” The Appeals Court concluded by writing, “We see no need to discuss Toyota’s remaining arguments for reversal.”
“The Lord demands accurate scales and balances; he sets the standards for fairness…for his rule is built on justice.” Proverbs 16:11-12 (NLT)
I was on a real winning streak. Surging with confidence I asked, “And what about it? 40,000 sales or a $40,000 price?”
“Oh,” Uranishi replied with a hint of innocent delight. “Dr. Toyoda says, now that you have a name, he wants both.”
My glorious relief quickly turned into inglorious pressure. We were well behind Infiniti and would have to begin selling right away. Toyota’s General Counsel Bill Plourde stated, “Our intention is to immediately begin full marketing.”
Bill was right. If we were going to sell 40,000 Lexus LS400s at $40,000 each, it was time to start a full marketing blitz and begin pre-selling cars. We needed a national sales manager. We would find one in a highly decorated Marine helicopter pilot who had served in Vietnam.
(To be continued in “A Marine to the Rescue”)