Did you ever wonder why US automakers seemed to cede the small car market to the Japanese?

And why the US opened their market to the Japanese without much reciprocity?

Lee Iacocca, 1984:

>>Specifically, the feisty Chrysler chief charged that the GM-Toyota venture to assemble, with many Japanese built parts, 250,000 small cars a year in California would lead to a rise in everybody's car prices, reduce product choice and promote collusion between the two largest domestic and foreign car manufacturers.

excerpts from turbo-charged Iacocca's testimony that left more than one person in the hearing room gasping:

"GM is the domestic price leader and Toyota is the import price leader. Ford and Chrysler target their domestic prices on GM. It’s been the head-to-head competition between Toyota and GM that sets the pricing pattern for the entire industry. Do you think that pattern is going to stay the same when GM and Toyota sit down together and set prices, as they already have? And when this competition disappears, do you think the American consumer will have lower prices? I don't."

Iacocca heaped ridicule on the Federal Trade Commission, which by a vote of three to two, approved the joint venture saying,in effect, that a giant with a net profit of $10 million every day, needs Toyota's help to compete effectively. He accused GM of trying to weaken the fuel economy standards "so it can continue to build large cars and make even more money." He charged that GM LOBBIED FOR AN INCREASE IN IMPORT QUOTAS so that "it could pick up 300,000 small cars from Suzuki and Isuzu, and -- in the real world -- lay off its small car production base to Japan." He said that GM "wants to get rid of the Chevette, which contains 95 percent domestic content, and substitute a car that has 40 to 50 percent domestic content."

In a nutshell, Iacocca was exposing GM's clever plan of ABANDONING ITS SMALL CAR PRODUCTION in America to its overseas affiliates' factories for re-import or re-assembly into this country.

Iacocca was not just warning; he was promising that this GM shift overseas WOULD FORCE FORD & CHRYSLER TO SHIFT MORE OF THEIR PRODUCTION ABROAD. He said if the GM-Toyota deal is not judged unlawful under the antitrust laws (Chrysler has already sued), he will look for still more Japanese partners. "By the time the rest of us get through following GM's lead just to stay alive, U.S. AUTO PLANTS ARE GOING TO FALL LIKE DOMINOES," along, he added, with several mid-western cities. He estimated a net loss of 300,000 American jobs as a result of the repercussions from the anti-competitive GM-Toyota deal.

On that day, February 3, 1984, before the House Committee on Energy and Commerce, Lee Iacocca was a true public advocate. (Chrysler Corporation ..Detroit, Michigan, will send you a copy of his testimony.)

http://www.nader.org/index.php?/archives/780-Iacocca-Warns-Public-of-Danger-in-GM-Toyota-Deal.html


Prescient.

Renault holds 40+% of Nissan, which has French management & does joint ventures with Toyota. GM holds something like 20% of Suzuki, GM + Toyota own a big chunk of Isuzu. Daimler owns 1/3 of Mitsubishi, 85% of their truck division. Only Honda & Toyota are still more or less "Japanese" these days.

Chrysler on life support.

Who's the "competition"? They're all in bed together to screw the workforce.

Consolidation WILL happen, & jobs WILL continue to go.

GM was created by financiers, & that's the game they're playing. If they can get you to fund it, so much the better.

INTRODUCTION

The thesis of this paper is that the world automobile industry has been characterized by a half-century-long trajectory of labor militancy and capital relocation during which automobile production (in its "Fordist" incarnation) together with a characteristic corresponding form of labor militancy, have spread across the globe.

This trajectory has been propelled by three major waves of militancy among the world's autoworkers: (1) the CIO struggles of the 1930s, (2) the "resurgence of class conflict" in Western Europe in the late 1960s, and (3) the emergence of "new union movements" in Brazil, South Korea and South Africa in the 1980s.

Each of these rounds of labor struggles have prompted managerial responses, including the restructuring of production and the relocation of capital. And each round of restructuring and relocation has undermined workers' bargaining power in the sites of disinvestment/restructuring at the same time that it has created and strengthened new working classes in the sites of new investment.


http://www2.cddc.vt.edu/digitalfordism/fordism_materials/Silver.htm

Japanese production & repair of trucks & other vehicles for the US wars provided the first markets, operating capital, experience, technology transfer.

an accident of history? no, by design.

Now, who financed the korean auto industry?

And what's happened to those cushy auto industry jobs in Japan?

"In the interwar period, Western Europe lagged far behind the US in the extension of Fordist mass production techniques to automobile production. In the 1920s, the European industry was characterized by many small firms involved in the custom-manufacture of cars; none had the resources or sufficient market-share to make the huge investments in fixed plant and special-purpose machinery necessary to "catch up" with the US. In the 1930s, centralization of capital proceeded quickly with the support of governments, but the ability to take advantage of the economies of scale inherent in Fordist methods simply was lacking. The barriers to intra-European trade combined with generally low wages for workers meant than no true mass market existed...

But the center of growth in the world automobile industry shifted to Western Europe following the 1930s and 1940s upsurge of labor militancy among US autoworkers...The production of automobiles in Western Europe increased fivefold during the 1950s, from 1.1 million in 1950 to 5.1 million in 1960; and it doubled in the 1960s to reach 10.4 million in 1970 (Altshuler et al. 1984: 19).

... US direct investment in the European automobile industry had begun in the 1920s as a way to avoid tariff barriers and save on transport and labor costs. But investment took-off in the 1950s and 1960s. GM invested over DM 100 million in a major expansion of Opel (Germany) between 1950 and 1955 and afterwards continued adding to its facilities every year. GM also invested 36 million pounds in Vauxhall between 1952 and 1956 to enlarge its Luton plant and build a new factory at Dunstable...A combined corporate-government response in Europe resulted in the rapid growth of European automobile corporations through consolidation and the introduction of the latest mass production techniques....

won't buy small cars. They cite the fact that Ford's F150 is the largest selling vehicle in America. Yeah well how are those trucks selling now? You can't just look at one segment of the market and target 75% of your production at that segment.

I worked for GM for 13 years and I saw the hand writing on the wall back in 1988. They are hopelessly fucked up. They are suffering from the same problem that America is suffering from, denial. We cannot keep building and driving cars and trucks that get less than 30 mpg. Congress needs to force them to this conclusion or forget about trying to save them. Trucks like the F150 need to be classified as commercial vehicles and outlawed for commuting. The general public should not be allowed to use them unless they are hauling or towing.

Most people on THIS board don't buy big trucks and SUVs, but Joe Blow out there in the real world DID until the Summer of 5-buck Gas.

How destructive. How sad.

was the dealers did`t make any money on small cars. they used small cars to sell against so they could steer the buyers to a more expensive larger car.

general motors ,ford,and chrysler had well designed cars but they never were consistent in quality and reliability.

when I expressed interest in a 1980 Dodge Arrow of some other piece of Chrysler crap. I stuck with my Volkswagen Karmann Ghia.

and only one person is going to end up with all the money.

One, maybe two on top, dictating to all. Tyranny of the corporations is just a compartmentalized tyranny. That is until they start to try taking over other tyrannies until there is one.

But the guys whose project it was were stifled within the GM hierarchy

and by time time that the car finally came into reality those guys had been pushed completely out.

I was a debut year Saturn Sales Rep. I bought the whole cult brainwashing hook line and sinker.

"A different Kind of Car. A Different Kind of Car Company. Sold in a completely different way."

But by then Saturn was becoming the same old GM plant. Many of us were disillusioned.

I know, as I was once a not-so-proud owner of a Vega. Yeeeech, what a piece of crap! And remember the Chevette? It was the only thing WORSE than a Vega! I also owned a 1982 Buick Century, you know, the one with the sideways V-6....just try to change out those back spark plugs! Until GM, Ford, Chrysler et al build a car as efficient, well designed and well built as my Prius, I will not EVER buy another domestic car. And, as far as my tax money for a bail-out goes, HELL NO!!!!!!!!!! And my appologies to all you who work for domestic auto companies and suppliers. I do not blame you for the idiotic decisions that the management makes. And I'm sorry you have to suffer for those decisions. :(

:rofl:

:hi:

The early Saturns were great. But, that said, I drive a Prius, too.

Just before it came out, my dad, who worked for GM, said he was told by GM management the Chevette was designed to be their best-made, most reliable small car ever.

The Cavalier had a base price of around 8k and the Cadillac had a base price that was OVER 8k more. You couldn't tell the difference until they got to the trim shop, where they either put leather seats in or man-made. A different grille and taillights, and voila; It's a Cadillac!!

The ONLY difference was trim. Goes to show how shallow we are as consumers. We couldn't tell you the difference between an elephant and a hippo. We can sure tell the difference between the Bowtie emblem and the Cadillac one though!

Hell NO is understandable. You got yours. Fuck everyone else. VERY progressive.

He told me years ago that, within my lifetime, there would be about 3 companies left in the world who would manufacture cars. Looks like we're right on track.

BTW, Iacocca can kiss my ass. Before ya'll swoon over him, remember, if he had his way we here in MI would have Dick (scAmway) DeVos as a governor.

Julie

except for (possibly) the Ford Escort, which was a "loss leader" for Ford. There has been no profit in the domestic manufacture of small cars.

American manufacturers didn't know how to do it and they did not invest enough to learn how. Years ago I was driving a Mitsubishi designed Plymouth Arrow. The Arrow's miles were high so I considered buying a low mile Ford Pinto. I took the Pinto for a test ride. OMG, it was the most disgusting piece of crap I had ever driven. I drove my sister's new Chevette. It was like I was sitting to the side as the arm rest was protruding into the driver area. The clutch and brake pedals were positioned all wrong. It was pure pain to drive. I had new found appreciation for the well used Mitsubishi product after that.

We can make good, safe, fuel efficient small cars here, it's just that no one has tried, hard enough.

The Omni design was copied for the much-ballyhooed K-cars.
The Omni was a great car, but was eventually dropped for poor crash-safety.

Chrysler has had some great small cars, but they come from
Japan and France.

The GM Opel used to be a good sturdy small car.

I'm sure the fugly designs didn't help sell many of those cars.

Man.... The wheels were all out at the corners. It handled great. And
that 2.2 L engine was real peppy in a minimalist body.

Carrol Shelby, famous for producing an English sports car with a Ford V-8
http://en.wikipedia.org/wiki/AC_Cobra actually hot-rodded the Omni.

I had the last model year they made, the only ones ever made with fuel injection. I loved that car, but, unfortunately, it was totaled. But it proved to me that The American Auto Manufacturers can make good fuel efficient cars.

Now I drive a VW TDI.

"can't make a good small car" - by design.

When gas went down, just over these past two months, the number of small vehicles declined and the number of large vehicles sold went up.

We need to change our habits.

efficient vehicles, ate so much market share.

while importing the Dodge Colt from Mitsubishi.

I lost all respect for him after that.

on edit: you have more respect for maybe, roger smith?

*respect* isn't the issue; understanding history is.

thinking him a devious hypocrite.

that devalued the dollar by roughly half vs the yen. In the following years the Japanese had no choice but to make large markups to the price of their cars. That was a significant opportunity for US companies to win back market share, particularly for Chrysler. But nope, they increased prices nearly in lockstep. Idiots.

I've worked for a German company and American companies. One thing: ROI (return on investment). The German company would take 5% even 3% profit if it meant keeping people in work. The American company? RIGHT NOW they want over 12% and at one time it was 30% freakin precent.

Greed. And stock "performance".

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