In the mind of then-GM president Lloyd Reuss, the problem with the twin-turbo V8 was its image. The public, he felt, would see it as a low-tech solution—something Reuss and the rest of the GM hierarchy were desperate right then to avoid. In that context, a similarly powerful, high-winding, multivalve, multicam engine would be a better reflection on GM’s abilities, proving Detroit could build anything Europe or Japan could. Specifically, upper management was worried about a perceived lack of tech savvy that buyers ascribed to GM—an impression that, in an era of all-encompassing technical add-ons and patches, drove the company’s marketing people bananas. Reuss was additionally concerned that the upmarket march of Japanese entries such as the 300ZX and Supra would eventually compromise the Corvette’s marketshare; all those cars boasted complex, four-valve, multicam engines (or, in the case of the Mazda RX7, the same Wankel that GM abandoned as unworkable back in the ’70s).
Image-wise, it didn’t matter how well Chevrolet’s old-school pushrod V8 actually worked; at that moment, GM needed something more glamourous. This was the tipping point at which Reuss decided his firm would develop a sophisticated, 32-valve, multicam V8 for the Corvette. He told the engine group to start doing research work toward that end, on the logical assumption that the existing V8 block could be adapted to this new layout. That concept led the team to Tony Rudd at Lotus in England, which at that time was under the GM umbrella.
After examining the British firm’s own new four-liter, DOHC, 32-valve V8, the Detroit camp asked Rudd to calculate some figures for fitting new heads—similar to those on the Lotus mill—to the current Chevrolet smallblock. Rudd did, and the the numbers he came back with estimated that new heads on the existing block would only kick out around 350 bhp. Instead, Rudd suggested, GM should consider creating an all-new 350-inch engine starting from the oil pan up; in that way, outputs of 400+ horses and 400+ lbs-ft of torque could be achieved.
Since they were already up to their eyeballs with Lotus anyway, Reuss and GM agreed. A transatlantic team was set up so the Corvette group and Lotus could work together, ensuring the new V8 would fit the C4’s tight engine bay and thigh-high cowl.
But while Lotus’s engineering-consultancy business was well suited to designing this new engine, its less-than-stellar assembly reputation made GM wisely look elsewhere for final production. They settled on Mercury Marine in Stillwater OK, an outfit which already had lots of experience in constructing low-volume, high-tolerance, reliability-critical aluminum engines. Mercury Marine would go on to construct a special assembly facility inside its Stillwater plant. Soon it was working with Chevy and Lotus on designs for the engine’s production tooling, even as some parts of the V8 were still on the drawing board.