From the outset, the General Motors-Toyota venture raised eyebrows in US auto circles. After all, here were the leading carmakers in their respective nations -- not to mention the first and third largest auto firms in the world -- linking up to produce a jointly made car at GM's closed plant at Fremont, Calif. As seem from the corporate boardrooms of rivals Ford and Chrylser, the proposal appeared ominous indeed.
Now, given the diligent work of the staff of the Federal Trade Commission in producing a consent order, the Fremont venture looks far less susceptible to possible antitrust shenanigans.
That is not to imply that the venture will be less than highly competitive for GM's domestic rivals. Indeed, by producing some 200,000 subcompacts annually at the Fremont facility, GM will gain access to technology regarding quality control and low-cost production from Japan, as well as help meet its government-mandated 1985 corporate average fuel economy standards. But at the same time, some 3,000 US assemblyline workers are expected to go back to work. Another 9,000 jobs will be created in supplier industries around the US. And Toyota will gain a direct toehold to the US market.
The more competition within US auto circles the better for the public and, ultimately, Detroit. Vigorous competition should help spur further innovation and lower prices. What the US industry least needs is a return to the sheltered days of the pre-1970s, when it looked as though Detroit had the world car market forever nailed down as its own. The fuel crunch of the early 1970s, at a time when Detroit was still turning out mainly full-size cars, shattered that complacency. Today, US carmakers are producing first-rate products designed as much for fuel efficiency as comfort and style.
Under terms of the FTC consent decree, it is expected that neither GM nor Toyota will be able to share information not specifically linked to the one model produced at Fremont.Nor will price-fixing be permitted.
The pulses in favor of going ahead with the venture far outweigh concerns from competitors.