Motors, asked for delay after delay, pleading the compliance would result in bankruptcy.
In effect, the American automobile manufacturers, including General Motors, told the American consumer to buy what they built. By contrast, the Japanese automobile manufacturers attempted to build what the American consumer wanted. It was not surprising, therefore, to see the Japanese share of the American new car market increase from around two percent in the mid 1960s to over 28 percent in 1985.
By the early 1980s, product quality had become a major problem at all American automobile manufacturers, including General Motors. Rather than initiating a quality improvement program, the American automobile manufacturers other than General Motors sought and received from the free trade Reagan Administration governmental protection from higher quality imports particularly automobiles manufactured in Japan. General Motors opposed this governmental intervention. Their opposition was probably not so much based on a belief that the company's product quality would permit it to compete effectively with the Japanese, as it was on a desire to see the domestic competition fatally crippled. For most of the twentieth century, the American automobile industry was the most productive in the world, and General Motors was the best of the industry. Over the 20 years from the early 1960s to the early 1980s, however, the American industry, including General Motors, lost its comparative advantage. By 1983, Japanese automobile manufacturers, on the average, could produce an automobile for $2,500 less than could American manufacturers including General Motors.
The Japanese automobile manufacturers were thought to have acquired a comparative advantage over the American manufacturers through the widespread introduction of robot technology. The new technology helped the Japanese automobile manufacturing industry to become the most productive in the world. ...