Apr. 12, 1984

FTC GRANTS FINAL APPROVAL TO TOYOTA-GM JOINT VENTURE

 

TOYOTA MOTOR CORPORATION (Toyota) announced that the U.S. Federal Trade Commission (FTC) gave its final approval today (April 11, U.S. time) for the proposed joint venture in the United States between Toyota and General Motors Corporation (GM).

This project had its origins in March 1982 in talks between Chairman Eiji Toyoda of Toyota and Chairman Roger Smith of GM. In February 1983, a Memorandum of Understanding concerning the joint venture was signed by both companies, and in September 1983 Mr. William J. Usery, Jr., labor relations advisor to the new joint venture company, and the UAW reached a basic agreement concerning labor-related matters.

On December 22, 1983, the FTC provisionally approved the joint venture subject to a consent order, and on February 27, 1984, the 60-day public comment period ended.

Prior to final approval, Toyota and GM received a notice of early termination from the FTC on February 13 (U.S. time). Based on that notice, administrative procedures for establishing the new company were completed by February 22 so that the various activities necessary after final approval could proceed smoothly.

Outline of New Company
  1. Company name
    New United Motor Manufacturing, Inc.
  2. Location
    Fremont, California (location of new company's plant), U.S.A.
  3. Capitalization
    US$200 million (50-50 equity; partly paid-in)
  4. Directors
    A total of eight directors, four each from Toyota and GM
  5. President
    Managing Director Tatsuro Toyoda of Toyota appointed president

The new company's schedule for the present is to begin hiring as soon as possible. Among the employees in the new company, those who will play key roles in the production division will receive training in Japan concerning labor-management relations and the Toyota production system.

Toyota said it hopes to see production start by the end of this year.

Toyota has for some time been energetically promoting overseas activities, taking into careful consideration the economic situation and the circumstances in each host country. All these activities are based on Toyota's recognition that under free trade it is essential, not only for Toyota's growth but also for the development of the global automotive industry, for Toyota to further develop a long-term competitive relationship with other companies, while at the same time promoting mutual cooperation.

The Toyota-GM joint production venture in particular, taking place as it does when U.S.-Japan trade problems have become a political issue, is expected to contribute to the revitalization of the American automotive industry and serve as a new model of U.S.- Japan industrial cooperation. It is also expected that the joint venture will provide high-quality, highly fuel-efficient small cars to American consumers, and will have other favorable impacts on American society, such as the creation of new job opportunities and increased procurement of American-made automobile parts and components.

Note
All dates in above are U.S. time
Appended Materials
  1. Brief History of Establishment of Toyota-GM Joint Venture Date
Date (U.S. time) Remarks
1982 March 1 Then President Eiji Toyoda of Toyota Motor Company, Ltd. meets with Chairman Roger Smith of General Motors Corporation
1983 February 14 Toyota announced in Japan a basic agreement to establish the joint venture (February 15, Japan time)
February 17 Memorandum of Understanding signed in Fremont, California (ground-breaking ceremony for Stamping Plant)
April 4 Documents submitted to Federal Trade Commission for approval of joint venture
May 12 W. J. Usery, Jr. appointed labor relations advisor to new joint venture company
September 22 Basic agreement reached between Usery and UAW concerning labor issues related to new joint venture company
December 22 Consent order agreement reached between FTC, Toyota and GM
1984 February 13 Notice received from FTC for early termination
February 22 Administrative procedures completed for establishing new joint venture company
April 11 FTC's final approval
  1. Outline of Joint Venture (Items in basic agreement announced February 15, 1983, Japan time)
    1. The objective of the agreement is to establish jointly a new company for producing a new small passenger car, and there is no intent to establish any other kind of cooperative relationship.
    2. Equity in the new company will be shared 50-50 by Toyota and GM.
    3. The new company will be managed by a board of directors, with half of them from Toyota and half from GM. The president of the new company, who will also be the chief executive officer, will be appointed by Toyota.
    4. Production will be conducted in Fremont, California, at the former GM plant there. The small passenger car to be produced will be a new front-wheel-drive model.
    5. Production will commence as early as possible in the I985 model year, and annual production will be approximately 200,000 vehicles.
    6. This project will terminate no later than twelve years after start of production.