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Toyota execs walked barefoot to school … through a blizzard

Mark Rechtin is Los Angeles bureau chief for Automotive News.
LOS ANGELES -- Toyota's inexorable climb through the sales ranks has led to a popular belief that success was preordained for the Japanese automaker in America.

Not so.

There have been plenty of hiccups, nervous times and downright edgy situations during Toyota's 50 years in America.

For instance, the launch of Lexus has become the stuff of legend. But did you know that there was a staunch cadre within Toyota that wanted to see Lexus perish before it was even born? That Toyota's American brass fought with Japan over building a real full-size pickup with V-8 power more than 20 years ago? That dealers initially gave the cold shoulder to Toyota's entry into the captive finance market?

Toyota has faced challenges since its arrival in 1957. Its first effort in this country was a spectacular failure. The Toyopet Crown was underpowered, undersized and underwhelming. After selling fewer than 300 cars, Toyota loaded its remaining inventory onto ships back home. Dealers had to survive on a meager diet of Land Cruisers for five years.

It took more than a decade for Toyota to get a sufficient foothold so that its sales were no longer lumped into "other imports" in the monthly charts.

Then came 1971, and President Nixon's wage and price controls, the de-linking of the dollar from the gold standard, the elimination of the excise tax on cars, and a 20 percent increase in the value of the yen. As Yale Gieszl, one-time boss of Toyota Motor Sales U.S.A., put it, "For 90 days, no one knew what to do."

And when Toyota surmounted that hurdle, other challenges awaited. When Toyota arrived in America, it was too small to distribute its own vehicles. But as Toyota grew, that meant sometimes taking back the franchise from private distributors.

In Boston, Toyota's relationship with distributor George Butler unraveled in the courts. Butler didn't take losing the lawsuit well. When Toyota's new regional staffers showed up to take over the operation, all the paperwork was gone.

John Turmell, known as "Mister Fix-It" over his 30-year Toyota career, recounts that none of the new crew even knew where their dealerships were. To make things worse, the blizzard of 1978 hit, the roof of Toyota's residence hotel collapsed, and Toyota's Eastern Seaboard inventory was underwater in the flooded Port of Boston. Yeah, no sweat.

In an upcoming special issue to be published on Oct. 29, Automotive News will take a close look at Toyota's 50 years of doing business in America. Rather than a simple chronology of events, Automotive News will examine 25 make-or-break decisions that were crucial to Toyota getting where it is today.

Automotive News believes that companies don't do things -- people do things. The articles -- derived from scores of interviews from the people who were there when it happened -- will take the reader inside Toyota's boardrooms. Despite Toyota's carefully cultivated image of a consensus-driven culture, emotions often ran high.

Recently, I was invited to lunch with Toyota's "SR5 Club," an informal group of Toyota retirees who meet once a month to talk about old times - and their grandchildren. They allowed Automotive News to videotape their memories of Toyota's Wild West days of the 1970s.

A snippet of those interviews, which you can view at http://www.autonews.com/apps/pbcs.dll/article?AID=/20070716/VIDEO/70713039, are a preview of the stories that Automotive News readers will receive when our special issue is published on the week of Toyota's 50th anniversary in the U.S. market, which, by the way, is Halloween.

How American is that?

You may e-mail Mark Rechtin at mrechtin@crain.com

You can reach Mark Rechtin at mrechtin@crain.com

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