The Federal Trade Commission, citing a lack of information from the companies, has told Congress it will not be able to complete until September at the earliest its antitrust review of the proposed joint venture between General Motors Corp. and Toyota Motor Corp. to build small cars in California.
GM and Toyota signed a memorandum of understanding last February to build 200,000 small cars annually at a former GM plant in Fremont, Calif. Implementation of the agreement depends on approval by the FTC, which had been expected to rule by late June or early July. But FTC Chairman James C. Miller III, in a June 14 letter to House Judiciary Committee Chairman Peter W. Rodino Jr. that became public yesterday, said no decison will come before September.
Neither GM nor Toyota has produced all of the information requested by the FTC in the review process, Miller said in the letter. On June 2, Rodino had asked for an update on the GM-Toyota project.
"The commission is aware of the importance of an expeditious resolution of this matter," Miller wrote. "We must first, however, obtain the relevant information . . . for a thorough review of this joint venture under the antitrust laws. At this time, it does not appear that the commission will be able to make its final determination before September."
Miller added that, "Of course, if the parties should not produce the requested information as promised, it would cause further delay in this schedule."
FTC officials yesterday declined to discuss the specifics of the agency's information request. "It's the kind of information that lawyers and economists need to determine whether there is reason to believe there has been a violation of antitrust laws," one spokesman said.
However, others familiar with the review procedure said a basic FTC concern is whether the proposed joint-venture car--a front-wheel-drive, 1.6-liter, four-cylinder, four-door sedan--could be built by GM or Toyota alone. Critics of the proposal, including Ford Motor Co., Chrysler Corp., and American Motor Corp., have said that GM or Toyota could build such a car without entering a joint venture. The combination of GM, the world's largest automaker, and Toyota, the third largest, would give both companies an unfair economic advantage over their competitors, critics say.
GM spokesman Clifford D. Merriott yesterday said his company "expects to have all of its material before the FTC by the middle of next week." Merriott said the delay in a final ruling will have no effect on GM's decision to go ahead with the joint-venture plan, if it is approved.
A Toyota spokesman said yesterday that he has "no idea" about when the Japanese automaker will complete its part of the joint-venture application. The spokesman suggested that Toyota's delay is caused by language translation problems. "They are being very careful," the spokesman said. "Some Japanese words take on a different specific meaning when translated into English; and then there are some Japanese words for which there is no English translation. They want to be sure that whatever they say is right."