A Brief History of
The First 100 Years of the Automobile Industry
in the United States
Chapter 16 - Japan's sun rising as new world becomes one
by Richard A. Wright
"Buy American," bumper stickers began to exhort us in the '80s. Some took a more strident approach, inviting us to buy a Japanese car and put various numbers of Americans out of work.
But in fact, these were calls to the past. The internationalization of the auto industry was not something to be resisted. It had already happened.
While statesmen and diplomats claim they want to unite the world in brotherhood (or something) then work to keep the world divided, the auto makers have already moved a long way toward a one-world auto industry.
The linew between what was an American car and what wasn't was getting blurred. Many cars assembled in the United States contain major components, such as engines or transmissions, made in other countries. Some cars made in other countries are sold with American nameplates. And some cars with foreign nameplates are assembled in the United States.
Is a car built in England by an American company American or English? Is a car built by a Japanese company in the United States Japanese or American?
National boundaries began to lose meaning. Corporations were becoming citizens of the world, not nations. GM was an American auto maker, but it was also British, German, Iranian, Korean, Mexican, etc. Through stock acquisitions, joint ventures and other mechanisms, auto makers had domiciles and interests in many nations.
The sixth Ford built in 1903 was sold to a Canadian buyer. And in 1904, Ford of Canada was founded in Windsor.
Ford began building cars in England in 1911, Brazil in 1919 and in Germany and Australia in 1925. Ford now assembles cars in Argentina, Ireland, Malaysia, Mexico, New Zealand, the Philippines, Spain, South Africa, Taiwan, Uruguay and Venezuela. It recently acquired the venerable Jaguar in Great Britain.
General Motors was a little slower moving into the international market, but it acquired a Canadian subsidiary in 1918, then took over the Vauxhall company in Great Britain in 1925. (Vauxhall was started in 1903, using as its symbol the Griffin, half-lion, half-eagle. It was named after the suburb of London in which it was located, which was in turn derived from a 12th century mercenary known as Fulk le Breant. Through marriage, he acquired a house on the River Thames, which became Fulk's Hall, later corrupted into Vauxhall. The griffin was Fulk's symbol.)
In 1929, GM acquired the Adam Opel company, one of Germany's oldest auto makers, then bought Holden's in Australia in 1931. Recently, GM startled the British by toying with the idea of buying Rolls-Royce, then opted for Saab of Sweden instead. GM also assembles cars in Europe, Asia and Africa and, in a joint venture with Toyota, it assembles Japanese cars in the United States and markets them under the Geo name.
Chrysler Corp. was forced to sell off its overseas holdings (Rootes Group in Great Britain and Simca in France) during its crisis of survival in 1979-82. Chrysler no longer owns Simca, which is now part of the Peugeot-Citroen group and builds the Talbot car, but its once-ubiquitous Omni/Horizon was in large part a product of Chrysler designers in France. Chrysler has numerous ties with Mitsubishi.
Before it was acquired by Chrysler Corp., American Motors was almost half owned by Renault, in turn owned by the French government, seized during World War II after Louis Renault died in 1944 after he was jailed as a Nazi collaborator. AMC also built the uniquely American Jeep in 19 countries around the world. After Chrysler acquired AMC, France was out and the Jeep became one of Chrysler's best-selling vehicles.
Europe was where the automobile was born a century ago and many of its very earliest nameplates are still around, including those of Benz and Daimler (1886), which merged in 1926 to form Daimler-Benz, maker of the Mercedes. There was also an English Daimler car, started in 1896. It was formed to produce Daimler cars under license and Gottlieb Daimler was a director for several years, but the British and German firms went their own ways over the years.
In France, Peugeot dates back to 1890 and Renault to 1898. In Italy, Fiat was started in 1899 and other early British nameplates were Rolls-Royce and Rover (1904) and Austin (1906).
Czechoslovakia's best known car, the Tatra, was launched in 1897, long before Czechoslovakia existed (it was part of the Austro-Hungarian empire). It was called the Nusselsdorf, after the town where it was built. The name was changed to Tatra (a mountain range on the Czech-Polish border) after Czechoslovakia was created with Nusselsdorf within its territory.
But while the game began in Europe, the United States picked up the ball in 1896 and ran with it.
Developments such as mass production, the moving assembly line and interchangeability of parts were pioneered here in Detroit by Ransom E. Olds, Henry Ford and Henry Leland. Mass production did not really come to Europe until the '20s, when Opel began adapting American techniques and Andre Citroen started building a "car for the masses."
Leland's work in parts interchangeability and Kettering's self-starter ignition system put the United States in the technological lead in car design, a position it held through development of the automatic transmission, various power accessories and low-cost powerful engines until the early '70s, when Japan challenged.
"Made in Japan" used to mean "cheap imitation" and second-rate quality to most Americans until the '50s -- the Korean war, to be specific, where photographers first noticed that Japanese lenses were as good or better than German and about half the price. Now "made in Japan" means high tech and high quality. About one in four cars sold in the United States are made in Japan or assembled in the United States plants owned by Japanese firms.
The Japanese Mazda is the only car in the world to be successfully marketed with a Wankel rotary-piston engine. The Germans, famed for their engineering, tried it and failed. In fact, Felix Wankel himself tried to perfect the engine for NSU, but troublesome problems remained.
General Motors, no slouch at engineering, spent $50 million on development of the rotary engine, but gave up on it before ever getting close to the marketplace.
Another Japanese car maker, Honda, was the first in the world to market a car with a stratified-charge engine.
Isuzu has been working on a ceramic engine. It has succeeded in the industrial use of a ceramic engine, lighter that the conventional metal one and more fuel efficient. The new engine will have piston rings and valves and other combustion parts made entirely of ceramics, the company said.
In sheer numbers, the Japanese industry challenged and surpassed the U.S. in production in the 1980s. This was impressive progress for an industry that did not take shape until after World War II.
Japanese firms were building cars early in the century, but its industry could not be compared with the European or American. The first car built in Japan was put together in 1902, but most of the Japanese makers began producing cars in the '50s and '60s.
The exceptions are the two biggest, Toyota and Nissan.
In 1912, Kwaishinsha Motor Car Works began work on an experimental car, which was put into production in 1914. It was called the DAT, derived from the initials of the partners, Den, Aoyama and Takeuchi.
In 1926, Kwaishinsha merged with another company to form Dat Automobile Manufacturing Co. With a name like Dat, oddly enough, it quit building the Dat and began making a car called the Lila. Then it got out of the car business entirely and built only trucks until 1930. Dat returned to car assembly in 1931 with the Son-of-Dat, or Datson. This was changed in a burst of nationalism in 1932 to Datsun, to tie in with the Rising Sun.
The company became Nissan Motor Co. in 1933. The Datsuns of the '30s were built in a full range of body styles and were based closely on the British Austin Seven.
Most Japanese cars of this era were copies of American or European models. After World War II, the '48 Datsun looked like an American Crosley and a British-looking sports car was added in 1952.
Toyota Automatic Loom Works began experimenting with cars in 1935. Its first cars looked remarkably like the Chrysler Airflow. During World War II, Toyota built a car that was a dead ringer for the last pre-war Plymouth.
The Toyota company was owned by the Toyoda family. The slight change in name was made because the family thought Toyoda was more difficult to pronounce. Americans, of course, pronounce both the same.
Toyota and Nissan began exporting cars to the United States in 1958, when sales of Datsun totaled 1,003 and Toyota's Toyopet 919. Both nameplates drifted without making much of a dent in the U.S. market. In fact, the cars were not right for the U.S. market and the Japanese pulled back to study the situation and retrench.
They studied American marketing techniques, built up sales and service networks, designed cars to appeal to U.S. buyers and began to move up in the sales charts in the late '60s.
Isuzu made its appearance in the U.S. market in 1966, but faded within a couple of years. Isuzu returned in 1976 in the guise of GM's Opel. GM had halted import of its German-built Opel and in 1976 began marketing a smaller Isuzu under the Opel name through its Buick dealers. Isuzu now markets its own cars in the United States.
In 1969, the Subaru made its U.S. debut. Built by Fuji Heavy Industries, it was introduced by Malcolm Bricklin, who would later import Fiat models under the names Bertone and Pininfarina, then the Yugo by Zastava of Yugoslavia.
In late 1970, two more Japanese nameplates appeared in the United States, Honda and Mazda.
The Mazda is manufactured by Toyo Kogyo, an unlikely firm to beat the automotive giants in development of the rotary piston Wankel engine, but it did. It was originally involved in manufacture of cork products and did not produce cars until 1960.
One of the first commercially manufactured cars in Japan was the Mitsubishi Model A, built from 1917 to 1921 and modeled after a Fiat of that period. It did not build cars again until 1959. Mitsubishi entered the U.S. market in 1971 -- not as Mitsubishi but as the Dodge Colt. Chrysler Corp. has been withdrawing from sale of Mitsubishi cars in the United States as it developed its own small cars, but Mitsubishi offers a variety of cars now through its own dealer organization.
Honda became the first Japanese maker to assemble cars in the United States in 1982. Its facility in Marysville, Ohio, has been so successful that it now builds almost all the cars Honda sells in America and even exports some to other countries, including Japan. In 1984, Toyota joined with General Motors in New United Motor Manufacturing Co. in Fremont, Calif., producing Toyota Corolla and Geo Prizm cars and Toyota Tacoma pickup trucks. Since then, Toyota (Georgetown, Ky.), Mazda (Flat Rock, Mich.), Nissan (Smyrna, Tenn.), Mitsubishi (Normal, Ill.) and Subaru-Isuzu (Lafayette, Ind.), have become American car builders. In addition, German makers Mercedes-Benz (Tuscaloosa, Ala.) and BMW (Spartanburg, S.C.) are preparing to launch production in the United States. In 1995, foreign car makers sold more U.S.-made automobiles in the United States and they imported. Car imports into the United States in 1995 fell to 1.7 million, compared with assembly of 1.9 million cars in foreign-car plants in the United States.
It is expected that sale of U.S.-built foreign cars in the United States will total 2.4 million and that 200,000 of these U.S.-made cars will be exported. The percentage of U.S. sales accounted for by Japanese imports has dropped from over 25 percent a few years ago to about 13 percent, the smallest market share in 20 years. In 1996, these foreign-owned plants employed about 40,000 Americans and will build more cars than Ford Motor Co. or Chrysler Corp.
Why did Japan overtake and in many ways beat the United States at its own automotive game?
Many explanations have been offered. Management blames high labor costs in the United States, unions blame poor and greedy management. The unions gained credibility when Japanese makers began assembling cars in the United States and managed to obtain high levels of quality with American workers.
The first overseas maker in modern times to assemble cars in the United States was Volkswagen, German maker with a high reputation for quality, and it reported the same results -- that quality achieved by American workers was on a par with that of its German plants.
Many observers blame American management's focus on short-term financial performance with the U.S. decline in the face of long-range Japanese investment in zero-defect quality and technological excellence. American managers, they say, are more interested in their salaries and perquisites than in growth and investors are looking for the quick buck.
Craftsmen who put their names on their products and took personal interest in them built the American auto industry. They wanted to make money, of course, but this was secondary to their dreams of automotive glory.
Now craftsmen are out of style, working with the hands is held in contempt, company loyalty is discouraged, wisdom in the form of older workers is junked and next quarter's results are perhaps too important. The evidence is that the MBAs had a lot more to do with America's decline than the UAW.
Copyright 1996, Richard A. Wright
Published by Wayne State University's Department of Communications