Falling Back to Earth (Part One)

Saturn was General Motors’ response to the Japanese invasion of the US auto market.

Saturn S Series prototype. Image: blog.hemmings.com

The Japanese automakers’ penetration of the US market gathered momentum throughout the 1970s and ‘80s. By 1990, this was a major cause for concern, not just in Detroit, but also in Washington DC, where politicians observed the country’s ballooning trade deficit with alarm. The problem was exacerbated by the behaviour of the US automakers themselves, who were sourcing an increasing proportion of their vehicle parts from Japan.

In 1990, the US-Japan bilateral trade deficit in vehicles and automotive parts was $31.1 billion(1). This represented 28% of the total US trade deficit, and 76% of the country’s bilateral trade deficit with Japan. The deficit in vehicles was $20.6 billion, barely increased on the $19.7 billion deficit seen in 1985. The deficit in automotive parts, however, had more than doubled over the same period, from $4.4 billion to $10.5 billion.

The US automakers struggled in particular to Continue reading “Falling Back to Earth (Part One)”