Introduction

GM and Ford's sudden fall into deficit caused a stir. The benefits yielded by the merger of Daimler and Chrysler in 1988 were not as significant as expected, and the Chrysler division remained in deficit for many years. The direct cause of the deficits for all these makers was the business slump in North America, but the so-called legacy costs – health insurance, pension funds, and others agreed under a longstanding labor contract with UAW in North America – were blamed, rather than errors in global strategies. This seems to be an unreasonable and strained excuse.

However, it is undeniable that the three companies showed a pioneering spirit in meeting the challenges of globalization at the beginning of the twenty-first century. Environmental issues of global magnitude, emerging markets – such as Eastern Europe, Russia, and Asia, especially China and India – and global deployment of the entire auto industry were all top of the agenda. Yet despite this pioneering spirit, fundamental errors were made. This chapter looks at those strategic errors and compares them to the successful Renault–Nissan alliance, in particular problems arising from strategic integration and respecting different corporate cultures.

Japanese auto makers are performing well in the age of global restructuring, despite being once seen as lagging behind in the deployment of global strategies and suffering directly as a result. This good performance is seen not only among Toyota, Honda, and other purely Japanese makers, but also among foreign-affiliated makers (except for Mitsubishi Motors).