82 / 188
80
4.2.2 Sketch of the situation
American automobile producers specialised on production of big vehicles with
high consumption of fuel in 1970-1980. This period was affected by an oil crisis. Lack
and high prices of fuels caused increased demand for small cars with low consumption
of fuels. American car producers could not compete with small, cheap and high-quality
Japanese cars during that time. The Japanese car producers started to dominate the
American market. The employment rate in the American car industry decreased by
approx. 33%.
Because of this situation the US government decided to protect their market
using export limits. Such limits especially concerned the import of cars from Japan.
Japanese import was limited to 1.68 million of cars a year, which meant 17.5% of
American market demand. The only way for Japanese automobile producers to increase
their market share on the American market was to bring production to the USA. The
automobile producer Toyota took this step with trepidation, yet with a clear goal. Since
that was the first Toyota operation in the USA, they looked for a strong strategic partner
with sufficient background and information about the market. It was some kind of
paradox that the company General Motors became the partner of Toyota. It represented
the biggest competitor on the US market for Toyota and Toyota’s declared goal was to
overcome their market share. As it has already been said, Toyota and General Motors
decided to establish a joint venture with the following objectives.
• The aim of Toyota for establishing a joint venture was:
• To increase their market share in the USA despite the import limits.
• To surpass their biggest competitor General Motors.
• To get experience with American suppliers.
• To get experience with American labour force (American labour union
−
United Automobile Workers).
Eiji Toyoda, the president of Toyota Motor Company stated before establishing
the joint-venture: “Competition and cooperation form a basic principle of the global
economic growth. We hope that this project will be a successful model of economic
cooperation between Japan and the USA which will contribute to development of the
American economy”.
The aim of General Motors (hereinafter referred to as “GM”) for establishing a joint
venture was:
• To learn an efficient system of production TPS (Toyota production system)
first hand.
• To increase quality of vehicles of the division Chevrolet.
• To implement the learnt system of production TPS in their factories and
thus to decrease production costs and increase quality of production.
• To make a model series of a small car following Toyota’s example.
The aim of UAV – United Automobile workers for cooperation with the joint venture: