Big 3 U.S. Auto Firms Team Up on Key Projects
Once barred from discussing anything but the weather, the Big Three U.S. auto makers are now collaborating on everything from electric-car batteries to the practice of tearing apart foreign cars to see what they are made of.
The pooling of technical talent from the U.S.-based auto industry, which suffered its worst year ever in 1991, reflects a belief in Detroit and in Washington that the nation must marshal its industrial resources to compete with Japan.
The latest evidence of this changing business landscape occurred Monday, when General Motors Corp., Ford Motor Co. and Chrysler Corp. created their eighth joint research project: a low-emissions technology consortium aimed at meeting the nation’s tightening clean-air standards.
There is so much joint activity that the U.S. firms also announced they are setting up an umbrella group to keep track of it all.
The U.S. Council for Automotive Research, or USCAR, will coordinate what Big Three executives predict will become dozens of joint research projects in safety and other areas, all under the presumably watchful eyes of antitrust lawyers.
“The range of subjects on which we could cooperate is virtually limitless,” said John McTague, former science adviser to President Ronald Reagan and now Ford’s vice president for technical affairs.
Such joining of forces was once banned because of antitrust concerns and skepticism about Detroit’s motives. A consent decree signed in the late 1960s, for example, forbade Big Three cooperation in lowering tailpipe emissions, because Congress feared that the auto makers would conspire to bury any breakthroughs.
In the 1960s and 1970s, auto makers saw increased government regulation “as threats and responded with lawyers and lobbyists,” said Richard Wilson, head of car and truck emissions for the U.S. Environmental Protection Agency. He said the industry is now responding with “scientists and engineers.”
The emissions consent decree has since expired, and the pummeling of U.S. industries at the hands of foreign competitors in the 1980s has caused antitrust concerns to subside, especially with Republican control of the White House.
The joint research efforts are allowed under the 1984 National Cooperative Research Act, which grants limited antitrust exemptions for joint research work in “pre-competitive” areas of technology.
As one example of “pre-competitive” cooperation, the Big Three in February formed a consortium in computer-aided design and manufacturing systems to make them compatible across the industry.
The 1984 legislation was intended to let U.S. companies work together as is generally permitted in Japan and Europe. It has resulted in dozens of undertakings in numerous industries--many with government money--adding up to a sort of ad hoc industrial policy driven by industry rather than government.
Today Democrats and Republicans argue over whether it constitutes industrial policy or not. But there is bipartisan support for the general concept of a united industry-government front in global economic competition.
Legislation broadening the 1984 act to permit joint manufacturing ventures passed the U.S. Senate, 96 to 1, earlier this year. House action is pending.
Advocates talk loftily of joining forces to address “societal needs” such as clean air, but the Big Three make no effort to hide their us-against-them posture toward the Japanese. They rebuffed attempts by foreign auto firms to join the federally backed electric-car battery consortium last year.
And their bid to delay for up to five years foreign access to battery technology developed by the consortium with the help of federal funds--normally public property under the Freedom of Information Act--is approved in legislation nearing final passage in Congress.
Joint research projects in other industries, notably semiconductors and computer software, have had mixed success at best. Observers say the auto industry is going about it differently, however.
“The way the Big Three have done it represents the fruits of careful study of Japanese, European and earlier U.S. approaches,” said William Ouchi, management professor at UCLA and consultant to joint projects.
Such well-publicized projects as the Microelectronics & Computer Technology Corp. in Austin, Tex., and Sematech, the joint effort to develop new chip technology, began as sweeping schemes initiated by industry leaders to take on the Japanese. But critics say they have no clear mission.
By contrast, Detroit’s first joint venture in 1988 was limited to polymer composites for car and truck parts after the idea “bubbled up from the engineers,” said McTague.
“We basically sat down and said, ‘I’ll show you mine if you’ll show me yours,’ ” said Richard A. Jeryan, a Ford mechanical engineer involved in the composites consortium. “And we realized, my God, we were all doing the same things.”
