Sales chief steered clear of trucks

Tom Elliott's focus on passenger cars during the light-truck boom helped lift Honda's new-vehicle market share to 10% last year

These days, Tom Elliott tours the United States in a gigantic motor home he bought just before he retired in 2005.

"It's a 40-foot Monaco Dynasty with a diesel engine," said the 67-year-old car aficionado, who ran American Honda's sales arm for 17 years. "It's like having a small apartment. We put 45,000 miles on it in four years."

There's some irony in the fact that he's traveling around in a giant RV. That's because Elliott was the guy who made Honda a big winner in the car segment after becoming sales boss in November 1988 — just as the Big 3 were about to turn heavily toward big SUVs.

Thirty-nine years ago, Elliott was living in a small apartment, in San Pedro, Calif., while a young Honda sales assistant fresh out of Long Beach State.

"My first year here, we sold 3,000 to 4,000 cars," he said. "When I left, we sold 1.5 million. In the early '70s, every time I saw a Honda on the road, I said, 'I sold that car,' because I literally had a direct hand in taking orders."

Elliott still can make that claim as he tours the country with his wife, Anne — stopping at every classic car show he can. The low-key California native played a role in selling every one of the Hondas and Acuras he spots along the way.

Sales nearly doubled during Elliott's tenure as American Honda's executive vice president of automobile operations from November 1988 until 2005. He brought Honda and Acura to the brink of a 10 percent market share — a milestone achieved last year. While the Big 3 turned their attention to trucks in the 1990s, Elliott kept Honda tightly focused on passenger cars — a strategy that paid off when truck sales collapsed last year.

He spent his entire career with the company and was present at the creation of Honda's U.S. car business. Elliott became intrigued with the company after spotting the N600 sedan at the 1969 Los Angeles auto show. The tiny four-seater wasn't yet on sale in this country, but Elliott liked the looks of it.

He later learned about a job opening because he dated a woman who worked in Honda's parts department.

"I applied for a job in motorcycle because Honda didn't have a job in the auto side," Elliott said. "I interviewed with a manager, but my degree was in marketing, and they wanted somebody with experience in advertising."

He didn't get the job, but a receptionist called later to say Honda needed someone for its fledgling car department.

"I came and interviewed and got that job," Elliott said. "I was a sales assistant. I called the 32 dealers every day, got their sales info and tried to sell them some cars.

"Every day I would ask them what they had sold. I had a little tally sheet, and I'd mark them down. I'd talk to the owner and he'd say, 'I sold a yellow one today,' and I'd say, 'Well, you told me you sold a yellow one yesterday.' These were motorcycle dealers who were selling cars as a sideline."

200 cars a month

Elliott did it all in those days. If an order for eight cars came in, he'd go to a drawer full of IBM punch cards. They were color-coded, same as the cars — red, white, blue.

Elliott recalled: "I'd take a red one and a blue one and I'd put eight of them together and put a header on it with the dealer code. I'd paper-clip them to the order, sign it and take it over to the ISD department. They'd run them overnight.

"The next morning I'd go pick up the titles and labels, put them in envelopes and mail them out. That's how we did it in the early '70s. We were only selling 200 cars a month."

Elliott "was one of a number of early U.S. leaders who helped shape the direction of the company," said Ed Miller, a longtime Honda public relations official.

Miller said Elliott set the tone for Honda's advertising and shaped future products as head of the product planning department, giving the sales team a greater voice in product development. And he led Honda's CART racing efforts in the 1990s and early 2000s.

Elliott also helped American Honda rise above a management scandal that ensnared others at the company in the early 1990s. The U.S. Justice Department prosecuted more than 20 former Honda sales managers for accepting bribes from dealers seeking favorable treatment.

"Tom stayed clear of that whole business," Sid DeBoer, CEO of Lithia Motors Inc., said when Elliott retired. "He kept his integrity when a lot of other people didn't. I think that explains why he was able to be a positive influence for so long at Honda."

Elliott looks back on those days with sorrow.

"We had to clean up the mess," he said. "That was not easy. I spent more time in courts and depositions for a couple of years than I care to remember. It was way too much energy and time.

"You feel bad because you get a couple of bad apples that ruin things for other people. It was tough, not an easy time period from '93 to '95. They were definitely not my favorite years."

Cars were king

But on the sales side, the 1990s were excellent years. The Accord was the fourth-best-selling car in the United States in 1988, just before Elliott took over as executive vice president of automobile operations. It never fell below second place until after Elliott retired in 2005.

While the Big 3 bulked up in the light-truck market during the decade, Honda and Elliott focused on cars. That emphasis put Honda in a position of strength that the Detroiters couldn't touch.

Honda's share of the car market rose from 7.3 percent in 1988 to 9.8 percent in 1991.

Elliott also brought a consistent, understated message to marketing, and he avoided getting Honda embroiled in incentive wars.

"We spend a lot of money, but our first focus is to create awareness," Elliott once said. "Sometimes we have humor, but we're not chest-beaters. We don't beat the drums about the features and prices."

That reflected Elliott's personal style.

"Tom was never a high-profile guy," said Gerry Rubin, head of Honda's longtime ad agency, Rubin Postaer and Associates. "He never wanted to be, never wished it, never sought it. Tom fought in the trenches, and when he had conviction that it was a good idea, he fought hard to retain the essence of that idea." 

You can reach Richard Johnson at rjohnson@crain.com.