Before Richard Marshall joined Subaru of America as its director of corporate communications in 1989, a role he was in through 2000, he worked for Indiana's department of commerce, serving as a liaison between the state government and the two Japanese automakers.
"There was pressure that we at the state really needed to win this one," he recalled of bringing the factory to Indiana after the state had missed out on auto plants going to Kentucky, Tennessee and Illinois.
Indiana offered the venture an incentive package valued at $90 million to cover worker training and road improvements and to provide tax abatements.
For its part, Subaru felt a strong desire for a manufacturing plant — not just for the immediate production supply, but for planning.
"We had to have a U.S. production plant," Doll said, for the brand to further develop.
But the joint venture came with challenges.
Marshall described the venture as a bit of a forced marriage, which led to some initial public skepticism as to whether it could succeed.
"These were two companies that had never worked together," he said.
Vehicle production began Sept. 11, 1989, with a Subaru Legacy sedan as the first model off the line. It was immediately followed by a small Isuzu pickup named the P'up.
"Most people thought Isuzu was the stronger of the two players," Marshall recalled, given Subaru's car-focused portfolio as other automakers began debuting SUVs.
But it was Isuzu that eventually ran into trouble. The venture ended in 2003, when Fuji bought its former partner's interest in the plant for a token sum — $1.
"The joke was, they overpaid," said Subaru dealer Don Hicks, president of Shortline Auto Group in Aurora, Colo. "At the time, they didn't need the capacity."
Today, however, Hicks added, "Subaru needs everything they can build."
After Isuzu left, the plant was renamed Subaru of Indiana Automotive Inc. Subaru has invested heavily in it, with multiple improvements and expansions. The plant supplies retailers with crucial products: the Outback, Legacy and Impreza sedan and hatchback.
For a short time, the plant also supplied Toyota dealers with Camrys. That run ended when Subaru needed more capacity to bring Impreza production to the United States from Japan in 2016.
Production of the brand's newest nameplate, the Ascent, will start there in May.
Fuji stakes its claim
That sort of U.S. expansion brought changes at the company itself. On Aug. 31, 1990, not long after the Indiana plant began production, Fuji Heavy Industries acquired full ownership of Subaru of America. Fuji already had held a 49.6 percent stake of the U.S. company. But a weakened dollar, an aging product line and growing competition in the 4wd field was making the U.S. operation vulnerable to a possible takeover bid.
With the acquisition, Fuji took direct control of the U.S. company and operated it without interference from outside investors.
Unfortunately, at that moment, Subaru sales were on the decline. Subaru sold 108,547 vehicles in the U.S. in 1990. Just four years earlier, it had sold 183,242 vehicles.
Hoping to build buzz for the brand, Subaru turned to Wieden & Kennedy of Portland, Ore., in 1991 as its agency of record. It was the automaker's first ad agency switch in 17 years.
The artsy West Coast agency had built a reputation for youthful and edgy ads for Nike, including the iconic "Just do it" campaign.
Subaru was the agency's first automotive account, and its staff of young and avant-garde art directors created a campaign with the tag line "What to drive."
It was visually striking, the public agreed. But Subaru's executives concluded that "visually striking" wasn't selling cars.
Wieden & Kennedy was responsible for marketing the SVX, a sporty, high-performance car unlike anything Subaru had attempted. The coupe's far-out looks included a window-within-a-window feature that still stands out. But the model also cost significantly more than any other Subaru. That turned up the pressure even more on the advertising challenge.
The brief relationship ended with Subaru abruptly firing the agency, cutting its own U.S. work force and undertaking another agency review in 1993.
For Subaru, things get tough ... er
Subaru's product line at the time didn't help, and the automaker's sales declined further. At one point, Subaru had a 300-day supply of inventory, with hordes of vehicles parked on fields around the Indiana plant.
In 1993, its U.S. sales declined to 104,179 vehicles. The next year was even worse, totaling just 100,619 vehicles.
One obvious problem: Subaru had no pickups, no SUVs and no minivan.
"I never once heard a customer come in and say, 'When's Subaru going to come up with a 2+2, six-cylinder sports car for $30,000 because I'd buy that,' " recalled Bill Garcia, dealer principal at Hodges Subaru in Ferndale, Mich., near Detroit "I would have much rather seen them come up with a minivan design or some multipassenger vehicle."
Along the way, Subaru changed its nomenclature from "four-wheel drive" to "all-wheel drive." It claimed that research revealed that car consumers associated 4wd with pickups.
The automaker also began targeting very specific groups who might be drawn to the brand's awd offerings. This included not just rugged, outdoors-oriented consumers, such as canoers, kayakers, skiers and backpackers, but also people who simply needed more assurance about getting to work in challenging conditions. They included health care workers, teachers and education administrators, engineers and other technical types.
Another change: There would be no more budget-busting Super Bowl ads, which the company had used to introduce the Impreza in 1993.
They called it an SUW
A bigger change occurred in 1995, when Subaru shifted all of its U.S. models to awd.
"That was a bold decision at the time," Doll said. "Half of our products were front-wheel drive."
That change ignited a new era for Subaru, Doll noted. And it came with two new nameplates.
The Outback, essentially a Legacy wagon that had been bulked up, joined the lineup in 1994 as a trim line for the wagon. It became a separate nameplate a year later. To differentiate it, Subaru tagged the Outback "the world's first sport utility wagon."
"We wanted to make it appear it was an SUV," Doll said.