The GM alliance: accepting a 34.2% stake (1971)

Between independence and dependence

At the core of this decision lies a paradox: to protect its independence, Isuzu surrendered a part of that independence. The 34.2% it handed over — a minority that kept both the majority and the company name — was a line drawn in numbers: heavy enough to give GM a motive to sustain the business, but not so heavy as to amount to control. When president Torao Aramaki repeated that “the Isuzu name will not be erased,” it expressed a belief that independence could be preserved so long as the nameplate was defended. Yet for a mid-tier maker that had judged it could not fight the global contest alone, the only way to reconcile pride with survival was to draw exactly this line.

What was protected, however, was the nameplate, not the autonomy of judgement. GM’s global sales network opened exports all at once and carried Isuzu through the recession of the 1970s, but the more it counted on that selling power, the more its own investment was built on the premise of GM’s strategy. That the R-car plan — into which Isuzu poured $281.1M (¥70bn), betting on other makers’ bargaining power and markets — shattered against the reality of a 1% export quota was an extension of the same logic. To borrow capital is also to take on a partner’s world strategy as a premise of one’s own. The road by which Isuzu, after GM departed in 2006, recovered a business make-up of its own — narrowing to commercial vehicles and joining the Toyota camp — suggests that this alliance protected independence while, at the same time, deferring a fundamental problem.