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When Ford and GM Wouldn't Listen, J.D. Power Turned to Toyota

Stocks in this article: F GM UAL

Power's story provides a window on the decline of the U.S. auto industry, which wouldn't listen to its customers partially because it felt it didn't need to and partially because marketing departments used market research not to improve the product but to play office politics, using it to buttress their decisions. "They would do the surveys the way they wanted them," Power said. "Usually it came out in a positive fashion."

Power made his mark at Toyota, where in 1968 he realized he needed to push past American employees and speak to more receptive Japanese managers. Within a few days, he was introduced to Tatsuro Toyoda, then a U.S. executive, who one day would become president and who remains a friend. In 1968, Toyota was largely unknown in the U.S., but Power helped to change that. His relationship with Toyota was probably the most important single factor in his career, and makes for the most compelling section of his book.

When Power signed his first contract with Toyoda, he said, "I gave him the proposal, he looked at the cover, took out his pen, and signed the contract without even looking at it ... I was blown away."

As he expanded into other industries, Power found the airline business to be largely the same as the auto business. The big airlines wouldn't talk to him about third-party market research, but the upstarts would.

"The one that grabbed onto it," Power said, was Gordon Bethune, CEO of Continental, which merged with United (UAL) in 2010.

Bethune "didn't like that Continental was way down at the bottom of the list," Power said. "He called me and wanted me to make a presentation to his staff. They were in last place (in customer satisfaction), but within two years they were on top."

In 2005, Power sold his company, which had annual revenue of around $230 million and about 850 employees, to McGraw Hill. Estimates at the time priced the value of the transaction at about $400 million. Power said he "sold at the right time," since the recession came a few years later.

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