The new fashion in engines was to use dual overhead cams and four-valve cylinder heads. This was perceived to be much higher-tech than the simple addition of two turbochargers. GM wanted the world to know that it, like the Japanese, could produce high-performance engines using the latest technological solutions. GM felt that it had to demonstrate that they had the ability to design and build DOHC engines.
Once they decided on the DOHC solution the fate of the turbocharged engine for the Corvette was sealed. The decision had been made that any new mega motor had to be percieved as a high-tech item. The only question was how to get a DOHC multi-valve engine built.
Chevrolet had already done work with Cosworth in developing the Cosworth Vega, and felt they had some skill in this area. The problem was that Cosworth simply didn't have the manpower to carry out the task.
Russ Gee, of General Motors, knew that he had to find some help. In early November 1984, Russ Gee went to England to see his old friend Tony Rudd at Lotus Engineering. The thought was that Lotus could develop a set of cylinder heads for the venerable 350 ci engine.
I'm always delighted by the story a friend of mine at Lotus tells about how GM "came to us looking to purchase a set of cylinder heads and we ended up selling them a whole bloody motor." At the same time Gee was talking to Lotus, they were also investigating the abilities of Illmor, Porche, and Cosworth. Eventually, the choice was made to go with Lotus. By early 1985, this new Lotus engine was on the road to development. At this point the goal was to still simply build a set of cylinder heads.
Then, in the backyard of Russ Gee's suburban Detroit home, Tony Rudd explained over barbecued chicken how the existing 350ci block would never work. Rudd argued that if they constructed a totally new cylinder block to go with the new cylinder heads, Lotus could guarantee 400 hp. A simple cylinder head project had suddenly taken on a whole new meaning. This was going to be the big one. This was an L88 for the '80s.
The good news was that Lloyd Reuss, then a GM vice president, was on Dave McLellan's side. It took someone with this sort of clout to advance the program to the financial people. This was a program with low volume, high expenses, and tremendous risk. This was not exactly the type of program that GM management loved.
Once the LT5 project was approved, everyone knew they had to move as quickly as possible, since upper management could cut the funding at any time: "The General giveth and the General taketh away." This thing had to move quickly.
The first LT5 engine was fired up at Lotus on May 1, 1986. The first production LT5 engines came off the assembly line in Stillwater Oklahoma on July 13, 1989. Dave McLellan finally had his real Corvette.