Toyota went so far as to discuss building the Lexus ES in the United States. The near-luxury sedan was the brand's volume leader. Toyota considered immediately starting U.S. assembly, largely using imported parts, and then slowly increasing the car's U.S. parts content.
Inaba recalls the reasoning: "By making it by local production, at least we could sustain the dealer network, so that in better days we could again bounce back."
It didn't come to that. (Indeed, the first Lexus wasn't assembled in North America until September 2003, when the first RX 330 was built in Cambridge, Ontario.) Instead, Toyota jumped into the trade talks directly.
Gieszl, an American, testified before Congress, and so did U.S. dealers, customers and suppliers. But what really turned the tide was some good old Japanese-American know-who and a decision to defy Japan's trade ministry.
Then-Toyota President Tatsuro Toyoda was a friend of Walter Mondale, the U.S. ambassador to Japan. When they met to discuss the crisis, recalled Press: "It was almost like a Noh play, in that both sides wanted a way out but with their dignity. We wanted to find the right solution where both sides could go home with something."
The U.S. administration had vowed to impose the tariffs unless Japan set numerical targets for reducing the trade deficit. The Clinton administration called it "results-oriented trade."
Japan's trade ministry — which had helped rebuild the Japanese economy after World War II with industrial policies that closely managed all aspects of the economy — denounced the U.S. proposal as "managed trade." It absolutely refused to go that route. It was a stalemate.
Then Toyota stepped in. It released numbers showing that it planned to increase sharply its purchases of American parts and increase production of cars in the United States.
Those plans were part of the company's already-conceived, but not yet unveiled, New Global Business Plan, which called for a dramatic increase in foreign manufacturing plants. The U.S. part of the plan called for another assembly plant; a new engine plant; an expansion of Toyota's Georgetown, Ky., factory; and the addition of two or three nameplates to Toyota's U.S. production lineup beyond what had previously been announced.
Toyota also said it would start buying more than 300 small- and medium-sized stamping parts from suppliers in America, replacing ones that it had been importing from Japan. The added factories and vehicles also implied a large increase in Toyota's purchases of U.S.-made parts.