Arrogance and Accords: The Inside Story of the Honda Scandal (Hardcover)

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Editorial Reviews

Review

For all of the things right about Honda in the 1970s and 80s, there was something terribly wrong inside the house of Honda. Evidence suggests that high-ranking U.S. executives were shaking down their own dealers for cash or, in some cases, were forcing dealers to make the executives literal partners in their franchises. In return, dealers were allotted more cars - there were never enough to go around - or better yet, additional dealerships. Former Honda marketing executive Steve Lynch covers it all, from a unique insider's perspective, in Arrogance and Accords: The Inside Story of the Honda Scandal. Commendably, Lynch handles the story with balance, never tearing into personalities for their transgressions, but simply reporting the story.

Arrogance and Accords is often fascinating, always compelling. It should be required reading in business-ethics courses. Maybe some of Honda's former executives could teach the classes as part of their work-release program. -- Ed Wallace - Car and Driver magazine, February 1998

Steve Lynch, a former Honda marketing exec and author of Arrogance and Accords: The Inside Story of the Honda Scandal, describes a scene in this book in such extraordinary detail that it stays with the reader throughout the 300-plus pages that chronicles the largest commercial corruption case in U.S.

Lynch tells the sordid tale with a perspective and authority that only he can provide - the Santa Paula dealership, for example. Lynch was there, and he confesses that "he was no choir boy." -- Michele Krebs - Autoweek magazine, February 16, 1998

Product Description

Arrogance and Accords: The Inside Story of the Honda Scandal is the tale of the largest commercial corruption case in U.S. history. Between 1994 and 1997, eighteen former executives of American Honda Motor Company, along with four other people, were convicted on federal fraud and racketeering charges. The big secret at Honda was out: Over a 15-year period, the gang of greedy Honda officials had received over $50 million in cash and gifts from automobile dealers eager to obtain additional hot-selling Honda cars and franchises. The ill-gotten booty included briefcases stuffed with up to $750,000 in cash, palatial homes, luxury German automobiles, secret ownerships in dealerships and other businesses, and Hong Kong shopping sprees.

When the automobile market softened in the early 1990s, the high-rolling officials, led by Honda's charismatic national sales manager, switched to embezzling money from the corporation. Honda belatedly fired the executives in 1992 and tried to keep the scandal under wraps - until an ambitious small-town Assistant U. S. Attorney decided to investigate. Eighteen never-before arrested Honda executives were subsequently convicted. Most went to prison.

The final event of the scandal occurred in August 1997 when the nation's largest automobile dealer, Rick Hendrick, pleaded guilty to mail fraud in a federal court in North Carolina.

Arrogance and Accords is both a true-crime story and a look inside one of the world's most respected companies. It details the key characters and their shady deals, along with the internal and FBI investigations, and reveals the corporate culture that allowed the pandemic payola to flourish for so long. The author examines how the corruption adversely affected Honda's sales efforts, from how it marketed automobiles to the establishment of the Acura luxury car division.

The book also provides a compelling look inside the much-maligned American automobile business.

Written by Steve Lynch, a former top Honda marketing executive, Arrogance and Accords is an insightful, often hilarious tale of greed, ignored whistle-blowers, paranoid Japanese managers, and the raucous 1995 federal trial of two of the Honda officials who decided to fight the charges.

Told as only an insider could, Arrogance and Accords is written with authority and style by someone who was in the thick of the action.

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Product Details

• Hardcover: 310 pages
• Publisher: Pecos Press (November 19, 1997)
• Language: English
• ISBN-10: 0965776611
• ISBN-13: 978-0965776615
• Product Dimensions: 9 x 6.1 x 1.2 inches
• Shipping Weight: 1.4 pounds
• Average Customer Review: 4.5 out of 5 stars  See all reviews (11 customer reviews)
• Amazon.com Sales Rank: #1,072,834 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

4 of 4 people found the following review helpful:

5.0 out of 5 stars A fascinating book....., May 17, 1999

By	[e-mail] - See all my reviews

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.

6 of 7 people found the following review helpful:

5.0 out of 5 stars Inside story of Rick Hendrick's Bribery Shenanigans, February 22, 2005

By	Valerie J. Wood "Author, Breakfasts with Buster" (Maryland) - See all my reviews (REAL NAME)

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.

6 of 7 people found the following review helpful:

5.0 out of 5 stars Greed And Graft Blacken A Beloved Car Company, February 4, 1999

By	Michael Daly "Monkeesfan" (Wakefield, MA USA) - See all my reviews

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.