Word spread throughout the organization of the trouble. It got tense. In addition, November sales were disappointing and added to my anxiety. The LS400 exceeded its goal of 2,500 with 2,738 sales, but the ES250 fell short of its 1,500 objective again with only 1,049 sales. The ES250 was now behind its goal for the year of 1,335. The good news was that LS400 was ahead of its target by 1,092.
We now had 81 dealers operational, but the competition was increasing. Infiniti was in full launch mode. In December, we would have the daunting task of overcoming a disastrous safety recall of our premier product, increased competition from Infiniti, and the faltering sales of the ES250.
Then the dealers reported a second safety-related problem to the Lexus technical team. The center rear brake light would overheat and distort in high-temperature areas of the country and needed to be replaced. A third problem, a non-safety issue involving the clamp that connected the alternator to the battery, would also need to be fixed.
The rear brake light and clamp were not serious. Both could be easily replaced and would be largely ignored by the media. The cruise control, however, was a serious safety issue and could not be ignored. A small part called the cruise control actuator had a slight machining error and needed to be immediately replaced in all 8,000 Lexus LS400s that had been sold or were in dealer inventory.
But there had been only one reported incident and no injuries or deaths. Was this just a one-off event that wouldn’t happen again? Did we really need to do a recall? In the end, we decided it was too serious a failure that might endanger lives if we didn’t act. We couldn’t take any chances. It would be humiliating, and the press would have a field day at our expense, but we had to do the right thing.
The entire organization turned its attention to customer care. We needed to handle the recall in a way that would exceed the expectations both of our customers and our dealers. We had a week to get ready. Yuki Togo and Bob McCurry were fully supportive of the recall while keeping the pressure on selling more cars. Our December sales goal of 4,000 had to be exceeded by 302 vehicles to achieve the 16,000 sales target for the year. The LS400 couldn’t make up the shortfall if the ES faltered. The ES250 had to come through to have any hope of hitting the 16,000.
The recall would need to be reported to NHTSA December 1, 1989. There would be no time for Christmas shopping. Even in this situation, I knew God’s plan was higher than mine—and I trusted Him. Read the God of Hope book to learn more about the plan God has for us.
“The eyes of the Lord watch over those who do right.” Psalm 34:15 (NLT)
On December 4, 1989, the 1990 Lexus 400 Vehicle Speed Control Recall #89V211000 was announced by the NHTSA.
(To be continued in “A Defining Moment”)