The agreement of Toyota and General Motors for a joint venture to build a new front-wheel drive car at the now-closed GM assembly plant at Fremont, Calif., is sending shock waves throughout US industry. Although not the first agreement of its kind, the linkup between the two automakers represents a major breakthrough in US-Japanese trade relations and, equally significant, could lead to profound changes in US union-management relations, including introduction of more flexible work rules. Although many trade and labor experts are still sorting out the long-run implications, several things might be said about the agreement:
* American industry - in this case GM - will gain much quicker access to the large Japanese consumer market than has hitherto been the case.
One problem for the US in selling products to Japan has been the lack of standardization of parts to meet environmental and safety requirements on both sides of the Pacific. The fact that the new car will be jointly produced means that such differences will be largely overcome. At the same time, GM will acquire capital (some $150 million from Toyota) and Japanese management techniques, especially in the use of robots.
* Japan - in this case Toyota - will not only gain US engineering expertise but secure its links to the American marketplace. At a time when protectionism is becoming widespread, Japanese firms will need to ensure a foothold in their overseas markets. One way is by building entire assembly plants, such as Nissan is doing in Tennessee, or Honda did in Ohio. Another way is by a joint venture, such as the Toyota-GM agreement.
* Beyond the issue of cars, the pact is but one of a series of new joint ventures. IBM and Matsushita, for example, now are discussing a joint venture to produce mini-computers and office equipment.
As trade experts point out, joint ventures are beneficial in that they work in favor of free trade, while encouraging the sharing of management, engineering , and production techniques.
Still, it is labor relations in the United States that will be perhaps most affected by such ventures.
Many questions remain to be answered. The United Automobile Workers union, for example, is seeking to determine exactly what Toyota's chairman meant last week when he said that ''the people who will work in the new company will be partly UAW and some will not.'' The UAW insists that GM has assured it that the union will continue to represent workers at the Fremont plant. And such may well be the case. The issue, however, is hardly moot, given what has happened elsewhere.
At the Nissan site, for example, there is strong evidence that an anti-union policy is in effect. Potential workers are carefully screened. Several hundred production workers have been sent to Japan for work experience. Workers are being cross-trained, which means that they will most likely be shifted from one position to another over a period of time.
Such a policy tends to break the bonds between the worker and the union, because advancement is solely dependent on the approval of management rather than taking place in accordance with union agreements.
It would be unfortunate if the Toyota-GM venture, or other future joint ventures, were to become embroiled in union confrontation. Japanese car firms have not had the experience of dealing with strong unions as US firms like GM have. It might be noted that some Japanese firms have been careful to establish quick and satisfactory relations with existing American unions. The Japanese steel company NKK, for example, which is negotiating to buy a steel mill from Ford in Dearborn, Mich., has indicated that it is willing to accept UAW representation.
Surely joint ventures such as the GM-Toyota agreement that link together firms from differing nations can only prove advantageous in the long run. But firms putting together such ventures have a special responsibility to take American labor tradition and practices into account.