There were many eyebrows raised in Detroit when Chrysler Corp. filed its antitrust suit to break up the joint-venture company operated by General Motors Corp. and Toyota Motor Corp. in Fremont, Calif.
The suit, filed in January 1984 in U.S. District Court in Washington, came as Chrysler was seeking a joint-production arrangement with Mitsubishi.
Chrysler Chairman Lee A. Iacocca attempted to explain that seeming conflict by saying he opposed the GM-Toyota deal because it combined two of the world's biggest auto makers -- GM being the largest, and Toyota the third-largest.
Had GM paired with a smaller Japanese company, that would have been all right, Iacocca said.
But auto industry analysts and officials never accepted that explanation, just as they never really believed that mighty GM had to get together with Toyota to learn how to produce small cars efficiently.
Industry speculation was that the Chrysler lawsuit was aimed mostly at delaying start-up of the GM-Toyota company, New United Motor Manufacturing Inc., until Chrysler got its own joint venture going. By the same token, GM's venture, which began production of its subcompact Nova in late December, was seen simply as a way to beef up its small-car line on the cheap.
Both companies denied they had such motives. Still, no one was surprised yesterday when Chrysler and Mitsubishi, marketing partners since 1970, announced that they, too, have entered a joint-production agreement. Nor was there any surprise about the timing of the Chrysler-Mitsubishi announcement, three days after Chrysler dropped its suit against GM and Toyota.
The reality of modern auto production is that some joint ventures are needed to cut the costs of designing, engineering and building new cars, industry officials said.
"It's a case-by-case type of thing," said Tetsuo Chino, president of American Honda Motor Co. Inc., one of four subsidiaries operated by Japan's Honda Motor Co. Ltd. in the United States.
"Joint ventures will be a tendency in our industry in the future," Chino said. Honda, for example, is teaming up with British-Leyland to produce a new line of compact luxury cars -- the HX and the BX, with the HX tentatively priced at $18,000 for 1986 U.S. sales.
On its own, Chrysler was planning to spend a minimum of $600 million to come up with a completely new car to replace its aging Omni-Horizon subcompact line. But by equally sharing development and production costs with Mitsubishi, Chrysler now is expected to spend $250 million in the proposed joint venture to produce a new, 1.6-liter, 4-cylinder economy car for 1988 sales in the United States.
The savings of $350 million will allow Chrysler to put more money into its weakest market segment -- larger luxury cars.
Chrysler now sells two Mitsubishi cars, the Conquest and the Colt, in this country. Chrysler also sells a small Mitsubishi station wagon, the Vista, and a Mitsubishi truck, the Ram 50. In all, Chrysler last year sold 91,718 Mitsubishi cars in the United States, according to figures compiled by Detroit-based Ward's Automotive Research and the Motor Vehicle Manufacturers Association of America.
To augment its small-car supply, Chrysler is asking Mitsubishi to supply it with an additional 200,000 imports for U.S. sales.
The new joint-venture cars will be classified as domestics despite their estimated 50 percent Japanese content.
Chrysler also buys 2.6-liter V-6 engines from Mitsubishi, and has agreed to buy a 3-liter V-6 engine from its Japanese partner for the 1987 model year.