Tom Easterday, who was Subaru of Indiana Automotive’s executive vice president until transitioning to executive adviser last month, has worked at Subaru Corp.’s lone manufacturing plant outside of Japan from its beginning in 1989. It has been a period of twists and turns for the automaker, and the plant has told the story of Subaru’s changes in the U.S. market.
Now on pace to pass 400,000 units annually, the Lafayette, Ind., plant has far outgrown initial plans. Opened as a manufacturing joint venture with Japan’s Isuzu Motors, the plant began with the partners splitting a modest 120,000 vehicles a year. That required a careful corporate arrangement of checks and balances in decisions by the companies, and even raised speculation that the venture would never succeed.
Easterday, 62, joined the operation in 1989 as its attorney before adding various responsibilities. Since then, Subaru has seen ownership changes both at its parent company — first with General Motors and then Toyota taking a role — and at its U.S. customer, Subaru of America Inc. Along the way, the Indiana plant has seen Isuzu sell out its interest, requiring Subaru to absorb the ever-growing plant capacity, and at various times it has built the Subaru Legacy, Outback, Baja and Tribeca, Isuzu pickups and Rodeo, Honda Passport and Toyota Camry.
After a nearly 30-year career there, Easterday will retire on Dec. 31. He spoke with Staff Reporter Jack Walsworth about his years in Lafayette.
Q: How did a lawyer end up in auto plant management?
A: I started my legal career in 1981 in private practice and was the chief counsel for the Indiana Senate. Two litigators from Indianapolis mentioned that they were looking for the first attorney to join Subaru-Isuzu. I was fascinated with the possibility of working with different cultures — not only the Japanese, but also people coming from other automakers and other places. I called the then-vice president of human resources who told me that they were already down to their last four candidates and weren’t looking at anyone else. I asked him if any of the final candidates were from Indiana. He paused and said “No, does that make a difference?” I explained why it did, and he invited me up for an interview and I got the job.
The company’s history is full of transformations. What were the early days like?
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There were some doubters because we were a joint venture between Subaru and Isuzu. Both of them were relatively small companies as far as U.S. market share went. But two things that happened early on helped us thrive. One was the decision by Subaru to go all-wheel-drive, because when that occurred, Subaru’s sales began to grow.
The second thing was the Outback, which was developed around 1994 and then really took off. They initially expected about 500 a month in sales. Within a year, it was doing about 5,000 a month.
What was it like with Subaru and Isuzu producing in the same plant?
In the beginning, Subaru and Isuzu were not competitors. We built pickup trucks for Isuzu and passenger cars for Subaru. But then Subaru revolutionized the concept of sport utility wagon, and that started to compete with sport utility vehicles. By then we had already started building the Isuzu Rodeo.
All of a sudden, the vehicles that we were making were starting to compete with each other. Over time, it was much different than what we started off with.
Was there tension in the plant over the competition between the Outback and the Rodeo?
The Outback was a very unique and very innovative concept. It really spawned the whole product segment. As it became more popular, it seemed that Subaru continued to have stronger influence in the direction of the plant.
What was at stake when Isuzu dropped out of the joint venture?
We lost half of our production volume. We knew it was going to be very difficult and we had to make some very difficult decisions to move forward. But overall, we had a very dedicated work force. Subaru had a plan for the future, and we were able to execute that plan.
In 2007, we started building the Camry here, which helped not only increase our production, but it gave us an opportunity to learn from Toyota.
What did the partnership with Toyota do for the Subaru plant?
It allowed us to combine Subaru’s best practices with Toyota’s. The Toyota Production System is about eliminating waste and transportation. For example, we used to have basically all of our docks on the north side. Now, we have a dock on the west side and a dock on the south side. Being able to have the parts brought in closer to where they’re utilized on the line saved on transportation.