James B. Treece is Asia Editor of Automotive News. He is based in Tokyo.
The American media saw GM trying to raise cash. The Japanese media saw Toyota Motor Corp., which bought 8.7 percent of Fuji from GM, seeking to help GM.
As if the relatively puny $300-some million adds that much to GM's cash on hand. As if, should GM declare bankruptcy in four months, the U.S. Senate will say, "Wasn't Toyota kind to bail GM out of its Fuji woes?"
Who was the protagonist in this drama, GM or Toyota?
Neither. The central player was Fuji itself. Its unwillingness to find synergies with GM forced GM's hand. It then invited Toyota onto the stage.
The seeds were sown in December 1999 when GM announced that it would buy 20 percent of Fuji. Fuji had been thinly tied to Nissan Motor Co. until Carlos Ghosn decided Nissan could cut those ties. Now Fuji was throwing its lot in with GM.
Subaru's brand value
The appeal of Fuji for GM lay in the powerful Subaru brand. Subaru offered a well-earned reputation for durability to people who wanted all-wheel drive but, for whatever reason, did not want an SUV.
In other words, Subaru had a brand niche as unique as Volvo's safety image.
In an industry in which everybody claims to be "fun to drive," a unique brand is, if not priceless, worth a lot. (GM also wanted quick access to a small-car platform for China but later filled that need with GM Daewoo.)
Fuji executives, from CEO Kyoji Takenaka on down, though, didn't understand brands or branding.
What they understood was technology. They were convinced that GM wanted their awd and engine technology. Why they thought GM needed help to build awd vehicles is beyond me, though I have no doubt that GM's Rick Wagoner told them what they wanted to hear.
Fuji's failure to understand the value of brands is not unique. That weakness is common in Japan.
For example, Japanese electronics and camera companies built market share in the 1980s, but they didn't build brands. Since 1990, studies have shown that the number of internationally recognized Japanese brands has declined. (JVC, Mamiya, and Quasar, for example, have fallen off most people's list of memorable brands.)
Wagoner, meanwhile, saw Subaru's core strength as a brand and a premium one at that.
Some observers expected GM to link Subaru with Fiat, in line with the old downmarket view of Subaru cars as "inexpensive and built to stay that way."
Roadblock to collaboration
But Wagoner wanted Fuji and Saab to get engaged. The two could cut costs by sharing platforms and thus raising volumes and still charge premiums because of their unique brand positions.
Takenaka thought technology was critical. So he naturally concluded that Fuji's core technology strength should not be diluted.
Fuji's self-image thus proved a huge roadblock to collaboration with GM.
Wagoner and Takenaka collided over engines.
I would bet that 70 percent of Subaru buyers in America don't have a clue what kind of engine is in their car.
Oh, they might know whether it is a four- or a six-cylinder. But few know or care that Subaru, like Porsche, uses boxer engines, with the pistons moving horizontally to the ground, not up and down.
Fuji executives, though, are convinced that the boxer engine is critical to the Subaru brand identity. To them, it is equal in importance to awd. They were categorically opposed to sharing platforms with Saab if boxer engines could not fit in those platforms' engine bays.
Saab-Subaru platform sharing was dead before it had a chance. Once GM realized that Fuji was not going to budge on that, it was only a matter of time before they said sayonara to Fuji.
Fuji now has its third partner in less than seven years. Maybe it will succeed with Toyota. But first it has to learn a few things about compromise.
As Merrill Lynch auto analyst Tatsuo Yoshida wrote in a report, if Fuji wants this relationship to work it "must set aside any pride or shame and put all its effort into cooperative projects."
You may e-mail James B. Treece at [email protected]