LOS ANGELES - Three decades ago, Price Waterhouse sent a young auditor named Yale Gieszl to audit the books of a young Japanese car importer called Toyota.
Toyota was impressed with Gieszl's work and offered him a job. After some hand-wringing, and a push from his wife, Gieszl accepted.
His Price Waterhouse colleagues thought he was making a mistake. After all, Toyota Motor Sales U.S.A. Inc. was just a $250 million company. And its accounting system, as Gieszl and his peers knew too well, was 'a mess.'
As he left, Gieszl predicted that Toyota would one day do $1 billion in annual sales.
That it did. And a lot more. Toyota Motor Sales is now a $32 billion company. Nearly half of that annual sales volume - $14 billion - has been added during the seven years that Gieszl has been executive vice president.
Last week, Gieszl, 57, handed the reins of Toyota to Jim Press. Though Gieszl will not technically retire, in his new post as vice chairman, he no longer will be the controlling force in Toyota's day-to-day operations.
As he steps away, Gieszl leaves a list of accomplishments, creations and landmarks:
Since Gieszl took the top spot in 1992, Toyota and Lexus sales have climbed 38 percent to 1.36 million units in 1998. They are on pace to hit 1.425 million this year. Toyota and Lexus have set sales records the past three years, and they will do it again this year.
Toyota Motor Sales revenue has shot from $18 billion in 1992 to $32 billion in 1998.
Dealer profits have climbed six of the seven years on Gieszl's watch; last year's record profits for Lexus dealers were more than the second- and third-best years combined.
Lexus has the most satisfied dealers in the industry, and Toyota has the most satisfied dealers of the high-volume crowd.
The Toyota Camry has surged past the Honda Accord and the Ford Taurus to be the best-selling car in the United States for the past two years.
A FEW ROUGH SPOTS
'We're way past where we expected to be,' said Gieszl in an interview. 'We weren't able to anticipate how well we'd do.'
To be sure, all is not perfect. The company does not rank high on sales satisfaction surveys, in which consumers grade their experience at Toyota dealerships. Toyota and 'hip' are not often mentioned in the same breath. Its designs might be best described as vanilla.
Despite such problems - which the company insists it will solve - Gieszl leaves a well-oiled machine that is set to achieve even more spectacular growth. Already, Press has predicted 1.5 million Toyota and Lexus sales for 2000. And Gieszl sees no reason why the growth has to stop there.
'We certainly talk about 2 million Toyota and Lexus sales a year in our long-range planning sessions,' he said.
'I've already told the Toyota dealers that they should expect to sell 1.5 million Toyotas soon. I really don't know if there's a cap on the number of vehicles we can sell in America.' Gieszl said.
No pressure, right, Jim?
'Obviously, Yale's stewardship has left the company in excellent shape and has created a very high standard,' Press said.
'Yale and I both joined Toyota in 1970, so a lot of who I am has been greatly influenced by him. Back then, Toyota had just posted annual sales of about 125,000. Today, we do that in a month. The challenge for me and for everyone here is to achieve even higher goals and validate Yale's vision for the company,' Press added.
A STELLAR CAREER
Toyota has been Gieszl's only automotive employer.
His first few years were a true test of any finance man. In 1971, the yen dropped from 360 per dollar to 300, making imports more expensive. Toyota was handcuffed when President Nixon imposed controls on prices.
Gieszl's handling of the crisis impressed the top Japanese executives, who made him a vice president and corporate officer at age 31, after just three years at Toyota. At the time, Gieszl and sales legend Norm Lean were the company's only American officers, handling finance and operations, respectively.
Gieszl's first big move was to establish benefit packages, a 401(k) plan and bonus programs. Then, after Toyota passed VW in 1975 to become the leading import car in the United States, Gieszl was point man in creating Toyota Motor Credit Corp. and Toyota Motor Insurance Services. But launching those captives was far from an easy call, he said.
'It's a very competitive field,' he said, 'and not everyone is successful at it. Dealers naturally want low rates, and they want you to take all kinds of bad paper. If you do that, you won't last very long.'
For the first three months of its pilot program, a conservative Toyota Motor Credit billed no contracts. Finally, Lloyd Chavez of Burt Toyota near Denver sent three deals to Toyota.
It took nearly four years for Toyota Motor Credit to bill an aggregate $1 billion. Things have improved a bit since then: In 1998, it billed an average of $1 billion a month. On the insurance side, Toyota now writes 500,000 extended warranty and other insurance contracts a year.
LEADING THE WAY
Although the 1980s have become known as The McCurry Years in Toyota folklore - because of Toyota's rapid growth under sales chief Bob McCurry - Gieszl was the right-hand man who made sure that McCurry's plans made strong business sense. Gieszl was intimately involved in signing the New United Motor Manufacturing Inc. plant agreement with General Motors, launching Toyota's own plant in Kentucky, and creating Lexus Division.
During those years, Gieszl expanded his knowledge of dealer relations and product planning.
'I don't claim to be an expert on cars, but I work on cars and I like driving our cars and the competitive cars,' he said. 'You need enthusiasm and passion like that at a car company. The business has to be fun.'
In 1992, McCurry retired, and Gieszl took the top job.
'I never looked at it as replacing Bob,' Gieszl said. 'He was a capable leader, hands-on with good product instincts, whereas my expertise was in different areas. I couldn't just follow him. I had to make my own way.'
Added dealer Chavez, who had the foresight to become a Toyota dealer - Colorado's first - in 1966: 'It didn't surprise me that Yale ended up heading Toyota. He tells it the way it is, and you know you can believe what he says. You can put your trust in him.
'Without Yale's leadership, guidance and personal service, we never would have become as good a dealership as we've become. He knows how to conduct business to earn your respect. I hate to see him go,' Chavez added.
Despite his modesty, Gieszl has a couple of items that show personal pride in what he has achieved. For instance, he has the rights to the California vanity license plates that read 'Toyota' (on a Land Cruiser) and 'Lexus' (on a LS 400), and he doesn't really want to give those to Press.
This spring, Toyota dealers gave him another reason to glow. In late April, without Gieszl's knowledge, Toyota field execs asked dealers for a going-away gift for Gieszl and President Yoshi Ishizaka, who has headed back to Japan.
Dealers responded in May with 142,625 Toyota and Lexus sales, the biggest month in Toyota Motor Sales history.