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Arrogance and Accords: The Inside Story of the Honda Scandal
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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 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 0,000 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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Inside story of Rick Hendrick's Bribery Shenanigans
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 0965776611 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.
Maybe Reviewers of this Book Should Tell the Truth
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.
Great Book!!
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 0 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....
incorrect
Not an accurate account of how this occurred, badly mangled.
Arrogance and Accords
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.
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