ABSTRACT

The Japanese auto makers became “the measure of competitive excellence in the world.” Their system of production, known as lean or flexible production, changed the industry’s competitive rules. In the industry context of the early 1980s, only a complete renovation of their production operations would allow the US Big Three to meet the Japanese challenge and to arrest their substantial drop in market shares, particularly in the United States. Exploiting the competitive advantages built in their foreign operations and trying to integrate those operations on a global basis was seen as a logical strategy to achieve an overall reduction in production costs and boost competitiveness.