Historically, technical collaboration involving the former Chrysler Corp., Ford Motor Co. and General Motors Corp. was unthinkable because they dominated the U.S. market and viewed each other as primary competitors. Also, antitrust laws strongly discouraged U.S. businesses from working together. This prohibition was especially strong for companies in the same industry.
However, things began to change in the years following 1970. The three domestic automakers no longer dominated the U.S. market. There was growing competition from both Japanese and European automakers. Additionally, the 1984 Cooperative Research Act passed by Congress opened the door for a wide range of precompetitive research collaborations involving industrial competitors. Government regulations also produced new challenges that required the development of new automotive components including catalysts, on-board computers and lightweight materials.
Suddenly, these three companies found themselves on the same side of the table. They recognized that technical collaboration made good business sense in two well-defined areas: areas where technology led to no customer differentiation; and areas where the R & D was directed at a societal good. In both situations, working together avoided duplication of effort on technology that held no proprietary carrot. Collaboration also makes sense in a third area - where the supply base is absolutely crucial to R & D success. In this case, collaboration of the three American automakers motivates suppliers to get involved in advanced technology, and leads to common acceptance of standards that benefit all parties.