Japanese-American Relationships
Jun 12, 08 Posted in Automotive, Industry SpecificThroughout my career in the automotive industry I have wondered the impact that initial relationships between Japanese and American manufacturers have had on business relations overall for these two countries.
For example, if General Motors had been quick to embrace Toyota as a potential partner back in the 1970’s, how would these companies be affected now? Domestic automotive manufacturers were quick to dismiss the Japanese vehicles as “entry level” and did not view the Japanese as true competition. By the 1980’s when GM partnered with Toyota for the NUMMI production facility in California, consumer preferences had already changed and the initial product, the Chevrolet Nova II was ill equipped for sale in the U.S. market. Though this plant has generated successful models in more recent history, if General Motors had been faster in cultivating this relationship, I would imagine the headlines would be different today.
With how the automotive market has changed, and the dynamics of these relationships including Toyota overtaking GM as the global automotive manufacturing leader, how has this relationship affected other partnerships and engagements?
3 Responses to “Japanese-American Relationships”
By Nick on Jun 12, 08
I am not sure if accepting Toyota as a partner in the 70’s would have been a wise idea. On the other hand, accepting Toyota or Honda as a potential competitor from the very beginning could have lead to a different scenario in the automotive market today. For many years, GM or Ford had a hard time accepting the Japanese car makers as competitors.
American companies perform the best with strong competitors in the market. With the global markets opening in recent years in Asia and Eastern Europe, General Motors has been more successful in selling cars outside the US specially in emerging markets. So give it a few more years.
By Jordan on Jun 12, 08
GM is certainly performing well abroad, while the Buick brand teeters on the brink of extinction here at home it thrives in China. Currently American brands are strong, but as vehicles continue to commoditize there is a possibility that this will die off as well.
I guess what I was getting at, and you kind of hit on, is if Ford or GM had recognized what the Japanese brought to the table, would they have been more willing to work with them originally? You make an interesting point that they might have been more aggressive if they had recognized the Japanese as competition, but I would bet that GM wishes NUMMI had started back in the 70s- developing a market for small cars during the oil crises of the past would have GM far better prepared today.
Why don’t you think a partnership would have been a good idea? It would not have been for Toyota, however domestic brands have never been particularly strong in the compact vehicle market and this could have been a great way to break in.
By john graham on Jun 13, 08
Actually the American and Japanese car manufacturers have been exchanging ideas and technology for years. When we first started workding with Ford in the late 1980s they already had thousands of people making the trip from Detroit to Japan, and contracts with all kinds of Japanese suppliers, customers, and competitors. In fact, the reason Ford called us in the first place mostly had to do with the yen doubling in value against the dollar between 1984-86. That macroeconomic event rendered all their contracts with their Japanese partners useless. They faced a huge task in re-negotiating everything.
I will say that the Japanese have a big advantage in their technical discussions with Americans. Because of deep cultural differences in conversational style, Americans end up doing all the talking and Japanese end up doing all the listening. And, technology tends to flow in only one direction.
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