It was by chance I came across Arrogance and Accords. At the time, almost any article on The Truth About Cars that had Honda/Acura news tended to reference Arrogance and Accords and the "Honda scandal." At the time, I had no idea what it was, and thought it couldn't be that bad for the company since Honda did phenomenally well throughout the 1980s and even the 1990s, when the domestic automakers were floundering. I was wrong. After reading this book, you'll learn a great deal about how relationships between auto manufacturers and dealers work, and how the crooked practices detailed affect Honda to this day.
In the book, Steve Lynch, a former Honda marketing executive and former Honda salesman, writes about the many instances of corruption that took place among the many American Honda sales and marketing executives, especially the American vice presidents. Since owning a Honda dealer during the 1980s was essentially a license to print money, the people in charge of handing out franchising and in charge of dealer allocation could get hefty kickbacks from dealers as long as they sent the right product their way.
A lot of the corruption was the result of low salaries of these executives compared to their counterparts at the Big Three for essentially the same work. Lynch explains this by detailing Honda's history, its expansion into the United States, the establishment of the American Honda Motor Company, and fiscal culture of staying lean, which had served it so well in the past, since the company never had the same access to financing as Nissan and Toyota did. As a result, many individuals in sales and marketing had extraordinarily low base salaries and had to augment it by demanding sums of money from the dealers or withhold favorable allocations or even the right to have a Honda franchise.
Lynch illustrates these sales and marketing executives as real characters (one of them actually stole and married his uncle's wife) and as individuals who were relentless in milking as much as they could from their dealers. Other than the dealer payola, Lynch also details the downright embezzlement that took place, by setting up "marketing conferences" and paying inflated prices for advertising work to crony-owned companies.
Out of the dealers who played by the rules of the corrupt Honda executives, nobody comes off looking as bad as Rick Hendrick. In cahoots with the executives, he had favorable allocations steered to his dealerships, managing to bankrupt other Honda dealers and buying them for a song. He was also allowed to have more than the maximum amount of Honda dealers allowed per individual. In return for the "assistance," he paid great sums of money to executives, giving them free cars and money for expensive houses. Hendrick was eventually implicated in the Honda scandal, but managed to avoid jail time.
Another important aspect of this book is how it detailed the launch of Acura. At the time, existing Honda dealers who didn't resort to bribes to get their franchises and favorable allocations of cars (a significant amount of cars with the right colors and options) did not receive Acura franchises easily. The marketing people knew they could essentially double their kickbacks with the launching of a second brand and the requirement of building a separate showroom. Even worse were the exceptions made by these executives to dealers who provided them with expensive gifts.
The Acura launch as described in Arrogance and Accords has certainly had an impact on Acura sales even today, especially compared to the success Lexus experienced with its launch. Sure, the available Acura products may have had something to do with it, but to a large extent dealer relations with American Honda was a major factor. It meant that Honda could not easily get its clientele to upgrade to Acuras, because even the best Honda dealers had trouble with these key managers.
Throughout the book, Lynch provides many anecdotes, some of them downright comical at times, of schemes that the crooked executives undertook in order to get as much money out of the company as they could. From making sure that crony dealerships received prospective NSX customers to opening and selling a Honda dealer in the middle of nowhere, the former Honda marketing man dishes out plenty of stories about the inner workings of American Honda during the 1980s and early 1990s.
On the whole, the book showcases the contentious relationship between manufacturers and their dealers, something people who have worked for automakers in sales and marketing and dealer principals know plenty about. Arrogance and Accords, though by now a 15-year-old book, highlights the lengths both parties were willing to go to in order to make serious money for themselves, at the expense of Honda's reputation.
Unfortunately, if you want to pick up a copy of this book today, you simply can't go to Amazon, where copies of this book go from anywhere from $70 to over $100. Instead, I recommend going to your local library which might have this book, while university libraries will almost certainly have this book in their business section. It's worth the effort to get it from the library. And since I got it from the library and had to return it a couple weeks ago, this book review will notably be lacking in excerpts unlike other reviews.