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Arrogance and Accords: The Inside Story of the Honda Scandal

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This was a terrific review of this book, found online:

BOOK REVIEW: ARROGANCE & ACCORDS - THE INSIDE STORY OF THE HONDA SCANDAL by Steve Lynch

Reviewed By Michael Daly

In June 1999 Pocono Raceway awarded Rick Hendrick its prestigious Bill France Sr. Award of Excellence. Wrote Speedway Scene when the award was announced, "Rick Hendrick exemplifies the drive, dedication, and ideals long associated with Bill France Sr."


The talk about ideals reeks of irony.


Steve Lynch spent thirteen years with the American branch of Honda Motor Company, and he loves Honda automobiles. This passion helps animate and drive his eyewitness account of the long-running bribery scandal that rocked American Honda and involved one of NASCAR's most powerful team owners. The scandal not only involved Rick Hendrick, it swept others in NASCAR racing as well, through no fault of their own.


Lynch's love of Honda shows in his early account of the dismal state of the American automobile scene circa 1981. There is a certain glee with which Lynch contrasts the high quality of Honda's product with the lesser quality of American marques of the time. Such contrasts in quality were vital, for Honda automobles were selling themselves, unsupported by the kind of extensive marketing campaigns common to auto manufacturers.


But as Honda grew more successful, greed and graft within the American division grew bigger and more audacious, as a gang of car cowboys dipped into the till of corruption and made themselves multimillionaires as a result. Lynch notes how Honda's tightwad employment policies contributed to the atmosphere of thievery.


The prince of payola at American Honda was "the blacksheep son of a well-to-do North Carolina family," John W. "Jack" Billmyer. Billmyer first made himself known as corrupt when he first joined Honda in the mid-1970s. He tried to extort from a Honda motorcycle dealer. When the dealer complained to higher-ups, he was ignored - a trait that would permeate American Honda's approach to the scandal for nearly 20 years.


Billmyer "wallowed in the kickbacks of dealers" throughout the country, and following in his footsteps was his successor as chief of national sales, Stanley James "Jim" Cardiges. Cardiges' own lack of moral scruples first displayed itself in very Clinton-esque fashion around 1977; running a dealership with his uncle, Peter Cardiges, Jim hit on - and ultimately stole - Peter's wife, his own aunt-in-law, Effie.


Such men were natural candidates for criminality.


Rick Hendrick was the biggest dealer influence-peddler to play ball with Billmyer and Cardiges. His relationship with Billmyer went back to Rick's youth as a hot rodder. Billmyer helped Hendrick establish himself in the car sales business and was instrumental in getting him a dealership. Lynch shows how Hendrick wielded undue influence with American Honda and was thus able to acquire more car stores than anyone else. "All it took," Lynch writes, "were a few gifts."


Most car companies limit dealers to about six store. Rick Hendrick, though, didn't believe such a rule should apply to him, and in Honda he found a company that officially did not have such a limit. He nonetheless took no chances; Lynch notes that Hendrick store holdings were frequently in the name of others, notably his brother John Hendrick, and less than $1 million of the bribes Rick paid have ever been recovered.


Lynch shows how Hendrick used bribes and influence-peddling to bankrupt rival Honda dealers and poach their stores. William Van Dalsam of Corono, CA, was one. Dick Young of South Carolina was another. These two cases were directly witnessed by Lynch; there were many other such cases not mentioned in the book because they were not directly witnessed by him. According to Rodger Knupp of Asheville, NC, one such involved former NASCAR driver Dick Brooks; after rebuffing a Hendrick offer to buy his stores, he found cars slated for his stores winding up at Hendrick stores.


This tactic of bankrupting rivals also drives Hendrick's racing, as evidenced by the enormous disparity of Hendrick Motorsports' budgets and engineering compared to those of most other teams.


Lynch also reveals how team owner Junie Donlavey and crew chief Doug Richert wound up getting caught up, through no fault of their own, in Billmyer's corruption. Seeing that Donlavey, a Richmond, VA Honda dealer, needed a crew chief for his team for 1987, Billmyer put the squeeze on a dealer from CT, John Orsini, to put Doug Richert on Executive Honda's payroll. This done, Donlavey had his crew chief. But the deal reeked of quid pro quo, and left a paper trail that would help unearth the massive bribery within American Honda.


Lynch carries the story through the trial and conviction of over 22 defendants, including Hendrick. There is a sense of disappointment in Lynch as he notes that, with Hendrick's guilty plea to one count of mail fraud (pertaining to perhaps the biggest individual bribe he paid Cardiges, a bribe that helped Cardiges buy an obscenely expensive California house), the probe of the Honda scandal seemed to close.


Lynch also notes a lesser-reported angle to the story -- how Hendrick reportedly also bribed Lexus. A cynic might thus question Hendrick's relationship with General Motors as well, given Hendrick's Chevrolet dealerships and the near-monopolistic clout and technical assistance GM provides Hendrick's racing empire.


One might also ask, if Hendrick is such a crook, why so many people so love him. Lynch answers that when he notes that, unlike the lesser dealers who bribed Honda, Hendrick was actually a good dealer, and his dealerships reflect him. Lynch notes Hendrick's generosity, his habit of providing whatever his employees need or want - most notably how he paid for operations on employee family members.


"Rick Hendrick has been a driving force in NASCAR Winston Cup racing," Joseph Mattioli of Pocono stated in announcing the France Sr. award, "and has displayed all the attributes that this award stands for."


Steve Lynch shows us just what attributes Rick Hendrick has displayed. NASCAR fans should be required to read this book.

I am a renowned fan of the Honda automobile, but had limited knowledge of the inner workings of the automobile industry. However, this amazing book brought to light the fascinating inner workings of Honda as it was during the author's employment there. It is written in terms that the layman will understand, and is an enlightening read for not only those in the industry, but also for those who have little or no working knowledge of it. Everyone will appreciate this book; it's an eye-opener, and one that I hope people in the automobile business, and those who just love an engrossing exposé, will read and then read again.

Steve Lynch has a passion for Honda automobiles. Such passion helps animate and propel his eyewitness account of the long-running bribery that occurred within Honda Motor Company's American branch.

Lynch's love of Honda shows in his opening account of the dismal state of the American automobile scene circa 1981. There is a certain glee with which Lynch contrasts the high quality of Honda's product with the lesser quality of American marques. Such contrasts in quality proved important, as Honda was able to sell cars without extensive marketing campaigns.

But as Honda became more successful, bribery and graft within the American division grew higher and more audacious. The prince of payola at American Honda was John "Jack" Billmyer, who "wallowed in the kickbacks of dealers" throughout the country. Following in Billmyer's footsteps was his successor as chief of national sales, Stanley James Cardiges, nicknamed Jim Car-Jesus, The God of Honda automobiles.

One of the biggest dealer-influence-peddlers who played ball with Billmyer and Cardiges was NASCAR team owner Rick Hendrick. Hendrick and Billmyer went back to Rick's youth as a hot rodder in North Carolina, and Billmyer was instrumental in getting Hendrick going in car sales. Lynch shows how Hendrick wielded undue influence with the company and was thus able to acquire far more car stores than anyone else. "All it took," writes Lynch, "were a few gifts."

Lynch notes that most car companies limit dealers to about six stores, but Hendrick didn't believe such a rule should apply to him, and in Honda he found a company that officially did not have such a rule.

Lynch details how Hendrick used bribes and influence in Honda to bankrupt rival dealers - such as William Van Dalsam of California and Dick Young of South Carolina - and then poach their stores. A story not mentioned in the book adds to the scenario - reportedly, former NASCAR driver Dick Brooks was approached by Hendrick, who wanted to purchase his three dealerships. Brooks refused, and next thing he knew, cars slated for his shops were going to Hendrick's facilities.

Lynch carries the story through the trial and convictions of over 22 defendents, including Hendrick. There is a hint of disappointment in Lynch as he notes that, with Hendrick's guilty plea to one count of mail fraud (pertaining to one of the largest bribes to Cardiges), the probe of the Honda scandal seemed to close.

Lynch also notes a lesser-reported angle of the story - how Hendrick reportedly also bribed Lexus. Given this record, one has to wonder if Hendrick has used such tactics with General Motors as well, given the near-monopolistic clout and engineering backing from GM his NASCAR race teams wield.

Not just NASCAR fans, but anyone interested in cars should read this book.

Having worked for several Japanese automobile companies during this period, the "detailed" facts are not at all alarming. What remains a mystery, is how so few HONDA employees were caught, and how the Japanese executives were exonerated from having any involvement or knowledge of the happenings. Although C. Walker may not have been completely "above board", on all matters, the method in which HONDA (Top management, personnel dept., law firm, etc.) ignored the Walker comments, sends a loud and clear signal to "whistle blowers". Dave Power, J.D. Power & Associates, a respected member of the "auto community" attempted to alert HONDA of a "cancer growing within the organization", but was dismissed by HONDA management, who later admitted to memory loss. An extremely interesting book, particularly for those involved in the auto industry, or related fields

Arrogance and Accords is engaging, well written and at times very funny. The mainstream media missed this compelling corruption tale even though it was the biggest story in the auto industry during the 1990s.

Steve Lynch brings the sordid story to life, using his own experiences along with evidence and depositions provided by the Justice Department. I was on the "fringe" of the scandal and thought I knew the whole story from industry publications but Lynch brings to the table much more information than I ever imagined.

The reason that so much money passed hands is pretty simple - Honda cars were in high demand and dealers greased the palms of American Honda executives to get more vehicles. The real story here is not how it happened but how it all unraveled: a mixture of inept lawyers, an aggressive US Attorney, the often-unheard whistleblowers, and Honda's Japanese managers who did not want to put a stop to the corruption. The second half of the book reads like a true crime novel but it was all true.

Lynch could be a comedy writer. My favorite examples of his humor was his shots at some of the small towns key to the scandal - Conway, Arkansas, Santa Paula, California and Concord, New Hampshire - which were hysterical.

This past year, Honda paid out over $500 million to dealers who sued over the scandal, claiming they were denied vehicles in favor of corrupt dealers. I'm sure we have not heard the end of it....

Having been a car dealer for over 35 years, I at last know why I never could seem to get those special scarce models and makes I always needed. I suspect it was because I was not a crook as those Honda dealers discribed and named in Arrogance & Accords.

It seems truly amazing that $50 million dollars in bribes were treated as a cost of sales and just passed on to the retail customers who willingly paid up to $2000 over List Price.

Those Honda and Acura factory executives who concocted these schemes should have been put in prison and the keys thrown away.

Steve Lynch writes an Eye-Opening expose of what, who and even how these larcenous Honda factory employees of robbed both dealers and the buying public. What amazes me is how the IRS didn't get wind of this.

These 26 Honda & Acura executives who's convictions and guilty pleas to acceptence of $50 million dollars in cash and gifts over a 10 year period, should have triggered some mechanism with the IRS.

Every person in the car sales business, whether the Wholesale side of the Retail MUST read this book. It is manual as to either How to steal from dealers and the public or a manual as to what to watch out for from crooked factory people who are going to try to involve one in a larcenous scheme.

Arrogance and Accords should become required reading at the worlds business schools. I suspect however the teaching faculty would never beleive it. Well, it is said that truth is often stranger then fiction.

Arrogance & Accords is a must read! An absolute must!

This apparently out-of-print book exposes a side of Honda USA that is shockingly different from the image Honda has cultivated world-wide. It reads like a novel about the Mob, but is real stuff about the "good old boys" at the USA arm of Honda. Bribes, shakedowns, intrigue, threats, suicides all part of how the executives and managers in the automobile distribution chain made illegal millions extorted from dealers. After reading this book, I'll never look at an Accord with the warm feelings and regard I once had toward this flagship model -- nor the company behind it.

As a nascar race fan i really enjoyed this book. It shows how deep corruption is in everyday business and how people like Rick Hendrick can steal and bribe from his own friends and still only get a slap on the wrist.It shows how Nascar stands by Hendrick even though he's a convicted felon.It makes you wonder how many top Nascar people were also involved.Also the influence Rick Hendrick had over GM.I think both Rick Hendrick and Nascar show a lack of respect for fair play in business.You only have to look at Nascar itself and see how they favored Hendricks teams. Did you ever see Jeff Gordan penalized for anything in Nascar.He jumped the restart at Watkins Glen 3 times and never was penalized. Watching Nascar anymore is like watching Wrestling.Nascar is as greedy as Rick Hendrick.

Michael Daly's review of this book (see below) is driven by his irrational hatred of Jeff Gordon. This book has way more to do with Japanese business methods than Rick Hendrick. Unfortunately, Daly cannot see the forest for the trees. Do yourself a favor. Read the book and not Daly's comments thereto. The former is much more enlightening.

Having worked in the Hendrick organization for one year, after reading this book,I must tell you that there is no finer group of "car people" in this country. The real shame is that other dealers were not singled out so strongly by either the manufacturer or the prosecuters.