Rivals General Motors Corp. and Chrysler Corp., after months of talks, say they will team up to make transmissions in the first manufacturing joint venture between two major U.S. automakers.
The project, called New Venture Gear Inc., involves 4,100 workers and combines Chrysler's New Process Gear facility in Syracuse, N.Y., and GM's hydramatic plant in Muncie, Ind.The announcement by GM, the world's largest carmaker, and Chrysler, the nation's third-biggest automaker, underscored the woes of the domestic auto industry.
In its heyday, GM controlled nearly half of the U.S. market for cars and trucks and would have surely faced stiff opposition from the government on antitrust grounds for any deal with another member of the Big Three.
But the success of imported vehicles, particularly from Japan, has cut GM's share to about one-third of the market. GM is not alone in its problems; earnings at Chrysler and Ford Motor Co., America's second-largest automaker, have also taken a beating amid meager domestic sales and heated competition.
Chrysler said the new venture will preserve U.S. jobs and should aid American competitiveness.
The venture, which is expected to have annual sales of about $650 million, will be based in Troy, Mich.