Harvey Lamm is a rarity in the auto business. He is one of the only remaining true entrepreneurs who built the U.S. import car business in the second half of this century.
In 1968, he and Malcolm Bricklin founded Subaru of America, the independent importer for Subaru in this country. Bricklin was the president and Lamm was vice chairman and COO. Neither man was a 'car guy.' They had no automotive experience before Subaru. Yet both recognized the business potential.
Subaru was a different sort of importer. It was a U.S.-operated public company at a time when most importers were subsidiaries of the foreign manufacturers. It was independent and had sole responsibility for all U.S. operations.
While Bricklin left the company in 1971, Lamm stayed on and became president and CEO and eventually chairman and CEO. He left in 1990.
During his career with Subaru, Lamm made several radical product decisions. In 1970, he decided to import the front-wheel-drive Subaru 1100 at a time when there were few four-wheel-drive cars here. That decision led to the fateful day in 1973, when he told Fuji Heavy Industries, the manufacturer, that he wanted to import a 4wd station wagon he saw while in Japan. When the Subaru GF arrived on the market, it was the first 4wd car offered for sale in the United States.
Lamm talked with Special Correspondent John Russell about that decision, the reasons behind it and the battles to convince Fuji that it was a worthwhile project. This is an edited version of that conversation.
What led you to decide that Subaru needed a 4wd car?
Two things led to the decision. I'm a skier and found out the most difficult thing was getting to the mountains. It was not only difficult, but dangerous.
There were times when you had to get out and put tire chains on the car. This meant standing in the road. I had had several incidents with my family under these circumstances. Don't forget, there were no 4wd cars being sold; only truck conversions and Jeeps. There were no production 4wd trucks. So I was always looking for something that would solve this difficulty. Then in 1973 I went to Japan and saw that Fuji was building, in very limited supply, a 4wd wagon. I saw this as a practical solution.
Also, it fit into Subaru's marketing plans. Our strategy was to focus on rural markets, mostly in the snowbelt. This helped build our niche. I evaluated the car's potential to the company in this context and wanted it.
Was there any resistance by Fuji to the concept of a 4wd passenger car?
It was a miracle it came to pass. After a year and a half, it finally got to the point that I had to know what they needed to make this a reality. I also learned that Fuji scheduled the termination of all 4wd production and realized that unless I got an agreement right away, there was no chance, because they were canceling the car.
Fuji came back and said they would supply the car, but there could be no modifications to the vehicle for U.S. safety or emissions requirements and I had to guarantee taking 500 cars per month.
So I screamed and yelled, 'Why didn't you tell me one and a half years ago?' Then I returned to the United States.
If Fuji did not want to modify the cars to meet U.S. specifications, how did you solve this sticking point?
I got the U.S. government to give us a one-year exemption equivalent to five years. At the time, if you were a limited producer in Europe, you could bring in 1,000 cars per year for five years without meeting safety and emissions standards. I went to the government and said I want the five-year quota for one year. If after one year, I don't meet the specifications, I can't come back in again. The government agreed.
Also, I found out there was a multipurpose vehicle classification that no one was using. By that time, Fuji had scaled up the vehicle they developed, and that covered 67 percent of what the specifications were for the U.S. And that 67 percent covered the multipurpose specifications, which were almost the same for trucks. Two weeks later I went back to Japan and said, 'Here it is; you've got to build it.' They said, 'We'll have to talk about it.'
And with that, Fuji finally agreed to build the 4wd station wagon?
Not really. What made them finally decide was when I said we could not order any cars for the 1975 model year. I told them the only order I could give them was for 4wds and cars with the new automatic transmission. We never had an automatic transmission before 1975.
Why did you refuse to take any more cars?
This was just after the energy crisis and market collapse in 1974. We had 5,000 cars still in port, so I said I was going to reclassify all the cars in port to 1975 models. Reclassifying cars was legal at the time. My threat was the final push, and they agreed.
Was there any reason for Fuji's resistance to the 4wd concept?
I believe so. I was talking about a marketing strategy particularly for the snowbelt and they did not understand what I was talking about. Don't forget, their background was in the high levels of engineering, not marketing. They are very sophisticated engineers. However, once they saw the success of the vehicle, Fuji did a great job. First it was 4wd, then all-wheel drive.
Was Fuji unusual in its resistance?
No, I think it is true of every manufacturer. This is not a Fuji story or a Japanese story, but an automaker story. Makers are saying we know what you should buy. It's difficult to get a maker to be responsive to the consumer.
How successful was the 4wd wagon?
We sold out our first year's allocation in six months.
What effect did the decision to introduce the 4wd passenger car have on Subaru of America?
Four-wheel drive put the company on the map. We built Subaru on word of mouth based on customer satisfaction. Four-wheel drive fit the market and we sold it in a better way than any other product. We saw the opportunity to build a market and did it.