April 7, 2021

Subaru Story- as told by Malcolm Bricklin

How Malcolm went from jukebox to scooters to toy car to Subaru distributorship


3:06 "I am the father of Subaru"  

4:45 "The Cinebox Machine"  

7:37 "Very shortly after I get a call from Italy."   

16:48 "boom, I'm out of scooters".  

17:58  if I can get the insurance and if I can now find an automatic scooter...  

22:00 Malcolm is off to Japan for some scooters for his rental business. 

23:33 Tell me about this 360.  

25:38 Malcolm at the DOT.    

29:43  Consumer Reports: Cadillac and his little 360 with an article that says unsafe because it didn't have to meet any regulations.  

31:02  Malcolm sends a contract to Japan for the "real car" and is told "not to come" (he went)  

32:15 They tell me No.  

34:00 The closing argument that got the Subaru contract.   

40:32 So how does it go to your own car Bricklin and what was behind that?

Transcript

PROMO 7 - SUBARU STORY - V2

Wed, 4/7 · 7:41 AM40:49
 

SUMMARY KEYWORDS

scootersmotor scooterscontractsellcarpeoplebusinesscalledbuysubaruflymeetjapantoldbrochurenicedealersmachinesfactoryday
 

SPEAKERS

Jeff (99%), Speaker 2 (1%) 

 
Jeff Sterns
0:00
He shows me a picture of a thing called a xinabox. machine and picture a big egg looking thing with painted red and the front a dark color. And it has dials and buttons like a jukebox on the front and a television screen. And instead of hearing music, you push the button and you saw the musicians like MTV. Except this was way before MTV, would I get on a plane tomorrow and come to Milan? Don't tell anybody where I was going. They would have a ticket waiting for me at the airport. Don't tell anybody, which of course I got. This seems like James Bond before James Bond was out there. Yeah, can't wait. They said we want to talk about Lambretta motor scooters. We have 25,000 or better motor scooters in a warehouse in Long Island and the motor scooter vessel Lambretta is over mopeds are in with the big wheel. And we're not selling any remember this is 1967. Oh, I was almost 28. And I said, Okay, give me $5,000 a week, one year contract, and an office in New York. Now I'm living in Philadelphia. And I just said that. And they said, okay, went out and bought myself. A us Rolls Royce. Hired myself a driver. And every morning, bright and early, I'd come downstairs with my pillow in my pajamas, getting to sleep in the back of the rolls. drive up the turnpike at the end of the turnpike pull into the gas station, put on my suit, he would drive me to the time in life building, I would get out I would go up my office, read the Wall Street Journal, read the New York Times, listen to the radio had no idea what the hell to do. I happen to be politically connected in the United States. And I know you think I'm full of crap. So here's the deal. If I can get the United States government to give me an exemption to bring in your cars, you tell me that I have a contract for that car. And they said absolutely. And I pulled out that piece of paper, and Subaru of America was formed. Now I'm forced to go back and get the bigger car, the front wheel drive car, that they did not want to sell me. I only had the middle one. So I send them now I'm desperate. I mean, I got to have some more it's over. So I write them back on my secretaries, says, I'm coming over tomorrow. And I'm sending you a contract. And I do not want you to change one word in that contract. And I'll be over for you to sign it. I am getting on the plane in New York to go fly to Tokyo. And I get a TEDx Mike Secretary calls me up before you get on the plane. You might want to hear this. What is it? If intention has come to sign a contract as is don't come?
2
Speaker 2
2:42
Jeff Sterns connected through cars, if they're bigwigs, we'll have him on the show. And yes, we'll talk about cars and everything else. Here he is now, Jeff Sterns.
Jeff Sterns
3:00
I mean, are you the father or grandfather of Subaru in North America? Or am I overstating it? No, no, no, I am the father. There's no question about that. And it happened the following way. Now, I've just sold my business, I don't have the slightest thing what to do. And so I decide I'm moving back to Philadelphia. Now I left when I was 10. Now I'm almost 2122, something in that area. And I'm going to move back to Philadelphia. Alright. So and I may have these years mixed up by a couple years, but in that neighborhood, so I go to Philadelphia and get an appointment. I got my three. Now by this time, I have three kids, by the way. Three out of my six that I will eventually have. And I'm looking around in Philadelphia, I sorta have relatives there. And I'm meeting friends that I never knew. They introduced me to a man by the name of David Rosen and David Rosen. His business was the own coin operated machines in the Philadelphia and general area, very big deal in that cigarette machines jukeboxes, whatever it takes a coin they had. And he was older, and he had sons is younger than me. And he sort of adopted me as his you know, kid because I would come in every day we'd have coffee, talk about this stuff, and I'd leave. And I liked him. But there was nothing about the coin operated machine business that turned me on or that they needed me for, but he wanted to get me he was intrigued with something he somehow he didn't know what he wanted me for. But he wanted me and so we were talking I wouldn't listen. Then one day says Okay, I got it. What's up, he shows me a picture of a thing called a xinabox. machine and picture a big egg looking thing with the painted red and the front a dark color and it has dials and buttons like a jukebox on the front and a television screen. And instead of hearing music, you push the button and you saw the musicians like MTV, except this was way before MTV. He showed me that went, Oh my god, this is the greatest thing since sliced bread. So he said, okay, they want to give it to me. We have to fly over to Milan, you're coming with me. This is my first time out of the country. We fly to Milan. And we meet the initial intake cooperation. The addition to cooperation, built heavy presses, big name intercept, they that you would see in just about every car factory, big presses. And they build Martin Meyer, Maurice minor vehicles on license from Great Britain. And they built Lambretta motor scooters. And they were building this in a box, they just didn't have anybody to buy it. So we looked at it, and it was great. I mean, it looked like the future. And it just was great. So we ordered a bunch of machines, and we come back. And now I'm gonna go put them out in these in bars and restaurants and places, except I couldn't, because I needed a product. So now we're gonna have machines coming over, but we don't have any product. So I don't fly over to LA, and I meet with all the studio people to try to convince them give me product. And they looked at me like, Oh, really? So how many you want to buy? Like, I don't know. 1000? I mean, if I have 1000 machines out, that's another machines 1000 machine? No, nobody's going to do anything for you for 1000. I mean, maybe 100,000, they'll talk about it. But before MTV, there was anybody who gave a damn about making a film about them playing a song. I realize, Oh, my God, no problem. I got the thing that I have. I think I would older without cigarettes. I got nothing to show on there.
Jeff Sterns
6:46
You're damn right. They'd like to say that at the bars. I'd like to see him too. But I don't want to be in that business. Although I think back at it, he might have been a good business to be in. But at the time, I decided now that wasn't my style. I did not want to go. I'd like naked girls. I just didn't want to be in the business of being in that business. Sure. Alright. So I said, David, this is not for me. What I'm going to do is I'll find a place to sell these. And I'm going to sell them the Food Fair to put over there checkout counters, and I'm going to get the advertisers to put in whatever their commercials are. So as people are waiting in line to check out, they can see somebody commercial, and maybe to go out and buy another one who gives a damn. I sold them all. That's a good that's. That's Yeah, but I didn't want to be in that business either. It just I don't know. I don't know what I wanted. But it wasn't that. For sure. It wasn't that. Alright. So that it seems like would be the end of the story. Very shortly after I decided about that. I get a call from Italy. It was a Sunday morning. I remember picking up the phone and hearing somebody talk to me in Italian. And then they finally got on somebody could speak English. And the crux of the thing was, would I get on a plane tomorrow and come to Milan? Don't tell anybody where I was going they would have a ticket waiting for me at the airport. Don't tell anybody. Which of course I got. This seems like James Bond before James Bond was out there. Yeah, can't wait, boom, got on the plane. I get bent on the steps. did not go through customs. Nobody checked my passport. I'm getting really excited. We go fly to headquarters and finish on day. We go into the boardroom. I'm met with all these. I'm remember, I'm 2122 2324. I'm not sure in that age, less than 28 is where I am. And they tell me first, thank you for coming. And why am I here? Well, they have a serious problem in the United States and needed to talk to somebody they can trust. And after our meeting that we had in the business we did and they saw how I got out of it. They thought they could trust me. I said thank you for saying that. What do we want to talk about? They said we want to talk about Lambretta motor scooters. We have 25,000 or better motor scooters in a warehouse in Long Island and the motor scooter vessel Lambretta is over mopeds are in with the big wheel. And we're not selling any. It's not how much money that all amounts to. It's we are amazingly embarrassed. We're getting such abuse by people who are investors in our company about those 25,000 if I had to give them away, except that would look bad to we need to sell them. And I said and you're asking me, of all the things in the whole world that my mother wouldn't let me have is have a motorbike a motor scooter or a motorcycle, no matter what I tried to come never I could never have that. So my knowledge about that is exactly zero. And you want me to help you there. If they said, Well, that's exactly the reason because you're honest. I said being honest, is a nice thing to have. But not being knowledgeable is not the smartest thing for you to get involved with. I'm telling you, I don't know how to help you. They said well just do us a favor. When you fly back tomorrow. Would you please just go on Long Island, look at this situation, and let us know what you think. I said, Okay, no problem. I'd be happy to do that. What do you want? I don't want anything for doing that. I said, I'd be happy to do it. No problem. I fly in, I go take a car, I go out to Long Island. I meet two nice Italian guys that speak broken English. And they take us Yes, then they take a two or three hour lunch. And if you want something, you send them a check and tell them please send it 100% opposite of how you should do business, and 3 million times opposite of how you do business when there ain't no business. Right? I get on a plane, I fly back to Italy. I said my recommendation is to fire those two guys. They're nice guys, but they're not going to do any good for you there. I said, Okay. And I said, I got no one. You got 25,000 units, and I haven't the slightest idea what the hell to do in a bad market. In a product I have no understanding of, okay. Make us a deal. You want me to make your deal? I am telling you. I don't know anything about the product, or the segment. We have confidence in you make us a deal. Something I'll make them a deal. They'll shut their mouth. It'll be over politely without anybody losing face. I said okay. Now remember, this is 1967. Oh, I was almost 28. And I said, Okay, give me $5,000 a week, one year contract, and an office in New York. Now I'm living in Philadelphia. And I just said that. They said, Okay.
Jeff Sterns
11:37
Give me a check for 5000. They gave me a piece of paper give me a one year contract. There was nothing in it. They said I had to do a damn thing. Because I told him I didn't know what I was going to do. And they told me an office that they had in New York built turnover domain. And that was with the secondary. Cool. So I flew home, went out and bought myself. A us Rolls Royce. Hired myself a driver. And every morning, bright and early I'd come downstairs with my pillow in my pajamas, getting asleep in the back of the rolls. drive up the turnpike at the end of the turnpike pull into the gas station, put on my suit, he would drive me through the time and life building, I would get out I would go up my office read the Wall Street Journal read the New York Times listen to the radio had no idea what the hell to do. I didn't even know what to start. So now it came lunchtime. Where do I want to go have lunch? Well, 21 is a little stuffy for me because I wasn't always wearing my tie and jacket. But right next door was a place called toots shores to chores was a place where business people hung out like 21. But they also had in the middle, a round table. And on the in that round on that round table. Anybody who sat there sat there for the purpose of talking to the other people at the round table. So lots of people like the chairman of General Motors sat there to talk to the people. I mean, a lot of really big executives and politicians would use that as a sounding board to people that they never would get to talk to and who wouldn't give them an honest normally an honest answer. I sat next to a guy who had an office across the street from me, which was also across the street from JC Penney's. And his job is he was a rep for a furniture store, factory. And his only customers, JC Penney's, chose him, and this beautiful receptionist, and his customer across the street, and he like I would go to lunch, I took shores, he had one other attribute. He was a police groupie. He had their badge. And he talked about the police. And he did things with them. And they knew him. I mean, he really loved the police. And he, he loved being as close as he could be to being a policeman without being a policeman. And I would listen to his stories and interesting, and I told him what I was doing. And after I was with him for about a week, he says to me, give me three scooters. I said, Okay, what do you want me to do with them? He said, I want you to send them to the police force. You're going to use them for the for the meter maids. Hmm. And I'm thinking, What a dumb idea that is. But I didn't say it. And I gave him three. And he came back. I mean, every day with them what's happening? He said, they seem to be really happy with it. And a week later, they came back and said, okay, guess what? They now believe based on their information. That one motor scooter is the equivalent of five meter maids. I said, Wow. I said, That's really nice. So what do they want? They want to buy 1000 Really? Yep. Okay. We sold 1000 gave him back. He called them Italy told him for 7000 tell him what the commission gotta be 5% for doing it. Okay. We sell 1000 everything's going along. I'm meeting Oh, there's an adjective to this. So now here's my my I come in in the morning, I go up to my office, read whatever papers I can. Then I go across the street at five ft. Well, because he's going to touch shores. And I have a date with the receptionist. And about 1230, I end up at their choice sitting next to him. Okay, and that was my routine. And that was inspiration because it got me to be willing to go into car all the way to New York every day, and come back every day. So this is going along probably another two or three weeks. And he says to me, I need another three scooters. Absolutely, when you want. He said, they're going to police force and you can use them for Central Park. At that time, 67 Central Park was not a safe place to be. You didn't go near Central Park, forget nighttime, sometimes even in the daytime. And they decided they weren't trying see if they could run after people. Now the truth of the matter is not a bad idea. The Bad idea is having a small wheel going over terrain, you ought to have a big wheel, like a moped as an example. But nobody was talking to him on me this guy. So they took the three on both things where they thought is really good. And they buy another 1000. And lo and behold, soon you see a headline, Central Park gets out gets open because of the scooter patrol. So the scooters, we're getting credit for cleaning up the park, because you can run after him and who knows why, but it works.
Jeff Sterns
16:21
Another couple of weeks go by and I'm feeling pretty cocky. We sell 2000 of these damn things, which is 2000 more than I could imagine we'd ever figure it out himself. And he says, I need 15,000 Absolutely. What do you want for? He said, we're running ads in the police Gazette. And I got the New York Police Department, a guy who's willing to give a name and his phone number for you to call. So he then the call for him to give you a report on what they've done with the medium age. And with Central Park. Boom, I'm at a scooters. Fabulous. Now, the amount of scooters I got about nine months ago. Now I'm right now I'm going crazy. Because enough with a hunch. And enough we've gone across the street, nine months more to go. What can I do? So I start looking at what's going on in the world of scooters and motorcycles. And I see in every little place. There's a little thing, running scooters. And they're running for $15 an hour. This is time when a scooter cost a couple $100. What the hell is going on here? Why would you pay 15? Well, of course it was different. It was fun. an hour is enough. But there was a problem there. What was the problem? Well, when you get on a scooter, you had to shift it. So you're getting on something that's motorized, that you have to balance and you have to shift and you're into traffic. People get in an accident, perfect accident, like I would have gotten an accident. And if I tried to play that game myself. So the end of the story is when they get in an accident, they have to close their business because they don't get insurance for motor scooters, rental motor scooters. So it's a great business. And you can make your money back on the scooter in a month. But your longevity is not there. So I went boom, if I can get the insurance. And if I can now find a scooter because they are not building me any more scooters. This year. I have a business. So I went to State Farm and I got them to agree to a buck an hour. And they we had insurance. I had the insurance but now I needed a scooter.
Jeff Sterns
18:18
And I'm reading the Wall Street Journal one day and I read an ad and it says I got 400 and scooters, rabbit scooters on rental looking for a partner. So call him up. Yeah, he has 450 scooters. He has a contract for United States. His problem is he bought the distribution rights. So he has a warehouse full of parts and a bunch of scooters. And the 450 work great in the summertime, but they don't rent real well in Boston in the wintertime. So he has a $75,000 bank loan and SBA loan backed by the bank, of course, and it's overdue, and he's got a problem. He's got all the cash tied up. So I fly to Boston and meet with New England merchant back at him. And I say 450 scooters, do whatever you want with them, they're yours. I'll get rid of all the inventory. I'll pay I'll guarantee the loan. But I want the contract assigned to me. You're on the forum 50 scooters, they're yours, do whatever you want with them. But I want that contract signed to me and I liked it because it was an automatic transmission. So I got insurance and an automatic transmission. I own the world. I got the perfect product for this particular plane. And now I put together a package where I sell it in the gas stations I sell you a dozen scooters to the gas station. And I can finance them because you mainly Own your your your gas station. So I take a mortgage out of it or you take a mortgage out on your thing and buy this package which you don't you don't figure your gas is expensive. You don't figure IT services expense you don't consider the space is expensive. The insurance you only pay for when you rent it. So for a gas station point of view it's a was a really good deal made bunch of money in a business. They're already formed by several members. All right, so now that you want to order more, oh, in the meantime, before I had done all this and signed everything, the bank assured me they had the contract signed by Fuji Heavy Industries. Okay. Great. And I'm at that point I'm cocky and sloppy. Not going give me the contract. They told me to keep it at the bank. They were the ones who let me guaranteed a loan. So there but Wednesday, anyhow, we sell off everything we pay off the loan. Now I'm out of inventory. I want over a couple 1000 scooters. So I give me the information to Fuji I go out and get a telex and we tell them things are really going good. I want to have another couple 1000 but I'd like to come talk to you. Because I'd like to buy whatever your quantity is. Whatever you can build, I want I get a very nice telex back the next morning. Who am I? And don't I know they're dismantling the factory because they sold it to Israel. I call up the bank and my partner. Excuse me, I have a small problem. I went to a motor scooters. They don't know who I am. And they tell me that this man Yeah, yeah, they knew that. I said, What do you mean, I knew that. I have a contract. Now you don't actually we forged it. I said you What? Are you out of your mind? They admitted Oh, wait a second. They saw it. Yeah. Well, I hadn't met him. I mean, I was praying. I just found out they didn't. They said to me, You didn't lose anything. The loans paid off. You didn't immediately I said No, you're right. I didn't lose anything. I said, and I'm not going to do anything. Because I got the introduction. So I'm going to go to Japan and you better hope it all turns out, okay. Oh, we have great confidence in you. I get a visa, I fly off to Japan. Pin 1967 is great. Everybody's great. The n is 360. They are a little bit frightened of the United States. And the United States market scares the crap out of them. I didn't I come 27 Peter max times double breasted suits, sideburns down to here. Like I am from Mars. And there everybody there that I'm talking to is 50 year older. And I'm 27. So a totally different kind of animal. And they know I got screwed. They don't think they're responsible. But they're not sure if they're responsible or not. What they know is they don't want any trouble from me. So they're going to be nice to me. Nice Annika and doing something or two different things. And you're going to be nice. Now I have gone booked for two weeks. And they took me to all their factories, their car factories, and there are airplane factories in there. And they take me to the motor scooter factory, which was being dismantled. And I told him, here's the brochure. Here's the market I'm after, here's what I did was insurance. I can sell this 200 and some 1000 gas stations in there. I can sell at least 100,000 of these gas stations. How much can you build that but babba babba babba. Matt, your perfect scooter for this. whatever it costs, I'll pay Israel for it. I want you to build those scooters. And I'm thinking I'm getting the agree. I learned later on that means they understand not that they agree.
Jeff Sterns
23:01
I got myself a deal. And we can have later I get a very so sorry. But it's too late. We can't back down. It's already done. We're already sorry. Ah, I can't believe it. I can't believe I wasted all this time for exactly nothing. So I'm gonna try one more thing, and I go fly back to Japan. And they're seeing me because they're being polite. The last thing they want to do is me suing them in the United States. They don't even want to think about that. And I wouldn't have thought about it either. But they don't know that. So I say hey, listen, I'm really sorry that we can't do it with the scooter. But you know, I saw your little 360. And I said you told me at the time it was 640 bucks fo you fob calm. And I checked in it's $100 transportation, and $14 for duty. So I want to contract for that. Now what's the 360? Malcolm I'm sorry. The 360 was their little car that had a four cylinder engine. Unfortunately, there's no need to put oil and gas together to stroke to stroke and it's got 66 miles to the gallon. And it was adorable. I mean, I could sit in the car with a hat on. It was a little bit like a little egg. I could sit in with a hat on and there was enough room the way they packaged it and had leather seats and white wall tires and radio for 640 bucks. 747 75 minutes mine in the United States random Wow. I don't know a damn thing about the car business. But I know I can do something at that price. Whether I rent it out into the dollar a day. There's something I could do with that. But I want the goddamn contract. I can do something here. right amount. I mean, this is something great. Now remember, they're being polite. So they say to me, Mr. Brooklyn, we'd love to sell them to you. Problem is a couple problems. One, we don't believe they'll buy little cars like this in the United States. So we don't think there's a market. And the second role is the next year 1968 or 1969. We're somewhere in there. The federal regulations. Were starting to take effect versus safety. So if you give us a million and a half dollars, so we can do all the things we have to do to the car to make it illegal for you to sell it in United States, you can have the car. Now I knew that was sort of a polite way to go fuck yourself, right? But I said, Thank you very much. I got on a plane, and I flew to Washington, DC, and I go into the office. And I say, give me the book on the federal regulations for safety. They gave me a book about two inches thick. First, I look at the outside. This is not for me, but I opened it up, I read the first couple pages I read, I go, I can't, I can't, I can't understand the damn thing here. I can't deal with it on this basis. I go back to the first page which said, these rules, these safety rules are applied to all cars over 1000 pounds of curb weight. Plus curb weight. curb weight is sitting at the curb with all its fluids, all the gas filled in the air conditioning of it as it fluid filled in, whenever you'd have fluid filled in, that's curved weight. My brochure says 960 pounds curb weight. What can you do to change the law if I stopped bringing these cars in the United States? They said the way it works. You bring something in, you get it we get enough complaints that triggers hearings, we have to have hearings on it so people can make their desires known. And then we pass a law and then it takes two years to go into effect. I said simple. If I walk out this store and decide to bring in a car as soon as you can stop me as two years from now. They said no, no. Well, we told you it could be five, it could be 10. It could be never. It's a long time, not two years from now. But I said but for sure I got two years. Absolutely. What am I going to do? Take the brochure down to the IRS, they will give you an exemption. So I did. I called Japan I said I'm coming over, I need a meeting with the board of directors, it will be my last trip to Japan. If we can agree at this meeting. Malcolm Nate said take the brochure to the IRS or to like the D o t? Yeah, the IRS IRS office I go to an IRS.
Jeff Sterns
27:09
And they gave me a piece of paper and they stamped it and said I can bring in this cup of coffee with the brochure attached without meeting the regulations. Okay, now I got that it's in my pocket, the first thing I do is go out and hire for the week. A friend, a friend, somebody an acquaintance of mine, that was 55 years old. And I was hiring him. So it looked like I had some people that were at age two. And I told him Your job is to come smile and say hello. Don't say anything else. Don't do anything else where you're just working with me. We find in Japan, we go in, it was a snowy day in Tokyo, which is very rare. With this, their offices were right across from the Shinjuku Station, which trillions of people go every day. And all these people running around in the snow, which Tokyo is not, was not prepared for. So I remember that feeling of frustration with that snow coming down. And then people running around and we're in the boardroom. And I say to him, thank them very much for their patience. I knew they were being tolerant. I wanted to tell them for sure, no matter what happens with us, I will never sue you. You do not have to worry about that don't have to react in any decision you're about to make based on a fear of me doing anything that would jeopardize your name, reputation or money. Oh, thank you. Thank you. Okay. So I said, let's be real clear. I'm going to pull out all the stuffs. I happen to be politically connected in the United States. And I know you think I'm full of crap. So here's the deal. If I can get the United States government to give me an exemption to bring into your cars, you tell me that I have a contract for that car? And they said absolutely. And I pulled out that piece of paper and Subaru of America was formed. That's unbelievable. From the motor scooters that I couldn't sell was the was the make called Subaru in Japan. Did you come up with that name? Subaru is the name I came up with. They called it to Barbara. On Tuesday, they called the Subaru here because I'm advertising agency one two Subaru. Subaru is how you pronounce it there. The five stars are the same. Now we only got the little car, then everything is going fabulous. Suddenly them as best as I can bring them in. I'm getting letters of credit. I knew that as a credit before they're getting bad ships and all stuff I had no idea about. And then one day consumer report comes out on the front cover Cadillac and his little 360 with a shitty article that says unsafe because it didn't have to meet any regulations. Somebody calls me up and tells me about it. I said what's consumer report? So they tell me? I said, Well, what's the circulation? They said half a million. So I said what do I care? Half a million people won't buy the car who gets them? They said no, that's not the problem. The problem is all the banks read it and the banks are cutting off the floor planning to the dealer. For the car, now, I got cars stuck on ships, I got cars being built, I got pieces being built that are going to the factory is going to be built, Holy moly, but am I going to do the dealers are canceling their future orders because the banks are cutting off the floorplan Isn't that cool? That's one of those cases, Oh, my goodness. Now I'm forced to go back and get the bigger car, the front wheel drive car that they did not want to show me, I only had the middle one. So I send them now I'm desperate. I mean, I gotta have some more it's over. So I write them back to my secretaries, says, I'm coming over tomorrow. And I am sending you a contract. And I do not want you to change one word in that contract. And I'll be over for you to sign it. Now, I had met an investment banker that would told me to give me a couple million dollars, if I could get a contract for the bigger car. And he put it in writing that he would give it to me and I said, Take, here's a contract, what do you want in it? They put 25 years and this and that. And so I said that's what I sent over there. I told him, don't change a word. And not a good way to negotiate. By the way, don't change the word I'm coming over sign it. I am getting on the plane in New York to go fly to Tokyo. And I get a TEDx Mike Secretary calls me up before you get on the plane, you might want to hear this. What is it? His intention is come to sign a contract as is don't come. We're not signing. I'm coming you're signing. See you soon got on the plane. So at the end, you got to you know, you've done a lot of things in your life. But we got to put the Malcolm Bricklin sales course, out there, too.
Jeff Sterns
31:39
This was the most unbelievable to me this day of how this actually turned out that they gave me the contract that I wanted. Now I'm back there. He was telling me they're not signing it. They're not giving me the bigger car. They had planned on doing it themselves. They only gave me a little card to make me happy. They didn't think I could sell them anyhow. They then did this. And now we're going to embarrass them with acid, it's going to be worse than embarrassing. You're going to lose all the dealers you're going to have it's going to be like Hiroshima. Anyway, fortunately, not nice. So I meet with them. They give all my wonderful arguments. They tell me No. I meet with various people. They tell me No. Now, a week goes by and I'm getting 100% knows they're not opening the door for any reason whatsoever to give me what I want. And by the way, I want a perpetual contract on top of it all. Nobody has ever gotten a petrol contract in their universe. And I wanted that on top of everything else I was asking for. And I wasn't willing to negotiate. They were saying no, no matter what, even the matter even changed it. They weren't going to give it to me. So finally I say to him, all right. out of courtesy, I want dinner with you, Mr. Kikuchi, the export manager, and Ohara, who was the chairman of the board, and it was sort of like me, and I went to dinner, and I want one last shot. And that's it. Whichever way it goes, you're, I'm out of your hair, or I'm in your hair, but in a good way. Okay. So now, Harvey, I am, who I was, I made a my executive vice president, but he is one of the great car guys in the world turned out to be he wasn't when I met him. But he took Subaru to heights. And it was really him who did it. Great guy. And I had given him 25% of the company. So he made a fortune. So we're sitting at the table, and I have a higher across there and I have an interpreter and the sales manager. Next, then harbor them on the side. And we're on the 16th floor, the tallest building in Tokyo with the time and the band is playing and everybody at the table, including me are smoking cigarettes, and I got a headache that is killing me. And I am I'm desperate. It's either tonight or it's over. And I give them my you got to do this. And here's what's going to happen if you're done. Hey, guys looks at me and he interprets it. And he says, Ah, he understand now. Sorry. I turned to Harvey. And I said, I have no idea why I'm about to do what I'm about to do. But be prepared because I expect to see you under the table when I get started. Now first I have to tell you know if anybody involved with me is impolite or discourteous to anybody involved in secondary or customer or somebody who hates us. It's not okay. Being embarrassing anybody or impolite or saying bad, it's just not okay. And I, I can't imagine myself doing it. With that. I turned them look across the table clean across and call them every bad word I can imagine ending with jack at the end of it. I mean, and talk about if you think Hiroshima was bad when you see what's going to happen the United States if we don't go forward with the new card it's safe to do. Oh, I didn't know I mean, Harvey was petrified that sales manager and ready to die. The export manager ready to die. And that guy is looking really straight. And he's and I am coming off with this kind of energy. I mean, it's like I got an atomic bomb I'm blasting in his face about and crude, horrible words are coming out of my mouth. And I stop, and there's quiet. And he says, Ah, so now I understand, turns the cuckoo cheese has given the contract. That's it. To this day, I have no idea what I said that triggered that. And I became his favorite son. And everybody in Fuji thought that I was incredibly powerful to change his mind. And for him now to be my friend. And I got a 99 year contract No. And I had a federal contract. And they tried to offer me money per car in the bank in Japan not asked for that. They asked for 25 years. For some reason. I just wanted what I wanted. I said, No, I can't take money from you. Because we're a public company. And we'll all go to jail. If I take money from you, and I don't report it. So that thank you very much. But we can't do that may say, Well, well, how about 50 years? And argument? Sorry, listen, you said we're partners partners, to me means your kids and my kids will be working together and our grandkids will be working together. I want the petrol. Finally they said, Okay, we'll give you a perpetual but you can't tell anybody. We're public company. We have an annual report that comes out every year, it will be first paragraph and that annual report every year for the rest of our lives. They eventually said, Okay, I don't know why. To this day. While I'm telling you the story. I can't imagine that coming out of my mouth to anybody. And I can't imagine them coming to that conclusion. With that crap coming out of my mouth. Malcolm.
Jeff Sterns
36:42
It would probably it's probably it had something to do with like, I'm trying to you know, cuz I've been in sales. I ran dealerships for 27 years and selling to dealers for eight years. So I'm kind of into that. And in a little bit of NLP, little neural linguistic programming, but sometimes it's when you are what you're saying. Ah, yeah, you happen to be this the only answer that makes any sense. He felt the energy he felt. That's it. Unbelievable. I mean, I put it this desperation for me when I was doing was out of character, but the energy that came out what had to be like a bomb on his head, and he was a smart man. And it worked out fabulous for what you what you were saying. The horrible words that you're not proud of was, who you are and what you were at that moment. And if the words were bouncing them off often before that energy wasn't later, so well done now. You're out with Subaru though now. Oh, yeah. of Subaru. Everybody's out. When I say everybody's out. 20 years later, they came in bought all the stockholders back. We were the only Japanese car company that was not owned as an importer by the factory. So they wanted to eventually buy back and they bought all the stockholders back. Well, I mean, okay, so other Japanese imports didn't have distributors, or am I misunderstanding? No, no, no, no, no, there was no other importers. All the importers were the companies themselves. So any car company that comes in the United States becomes their importer. They at that time would set up dealers like Volkswagen had distributors, Toyota had distributors, but everybody eventually buys them back. right because they figure why do I need these guys for they did everything and they paid big money. They got them back, by the way. Moran that owns the Florida se right, turned down multi billions of dollars not to sell two of my Subaru dealers distributors would not sell the New England New Jersey distributor and the New England distributor. New England distributor Ernie Bob Jr, the son of the guy who started claims he's making a quarter of a billion dollars a year from selling to brews to his dealers. And the guy Bobby Butler in New York, New Jersey, claims that he's making somewhere between five and 10 million a month. Not bad, not bad work if you can get it. Yeah, God bless him. God bless him. God bless him is right. So how did you end up a phenomenal story? Like I didn't even know this. I'm so excited to hear this. This is amazing. I'm so happy to meet you. Malcolm Honest to God. I mean, you know, my pleasure, Jeff. It's my pleasure. Really, you know, because I've known your name. Since I'm 10 years old ish. I wish my dad was still around 56 or 5755 55? Because I have three sons that are older than you 6058 and 56. So your fourth son, I got a 44 and a 34. And a 29. Also. Got it. Well, I've you know, and I have a little bit because I have an 18 and 21 year old and a five month old. Oh, ready to go. Right. So I'm in the Malcolm club. What can I tell you are you are So how does it go from that to Okay, so I always wondered when you're importing you go and importing Fiat I'm like, I wonder how he got into like I know that for example people in the clothing business right schmatta they they're going over seas and or to Italy or to Asia or whatever or France and they're doing their buying and I'm like, how did this guy like find this car that car but now I understand that from the scooters to the Subaru, you know, a 360 and the Subaru now I understand how you got your taste for that. So how does it go to your own car Bricklin and what was behind that?
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Speaker 2
40:39
This has been Jeff Sterns connected through cars.