Sustainable Solutions for SCM

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:

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