In the early 1970?s, American car companies dominated their domestic market while Japanese and European cars have only insignificant market share. However, because of the oil crisis in 1973, the price of oil rose dramatically. Many Americans, scared by high oil prices, tried to reduce household expenditure by buying fuel efficient small cars. Since many American cars were big and have poor gas mileage, the consumer preference for small cars presented a great problem to the car producers. Furthermore, many Japanese cars were cheaper than American cars. In 1979, the production cost of a small Japanese car is $1,500 less than a similar American car (Mitchell, 1986). Many American car companies' executives thought that the lower cost of the Japanese car was due to lower labor cost. As a result, they believed that massive automation should significantly reduce the production cost and allow American small cars to compete with the Japanese. Among the three largest American automobile producers, General Motors (GM) spent the greatest amount of money on automation. Roger Smith, chairman of GM during the 1980s, declared that technology leadership is what will keep the company ahead in world competition ("When GM's robots," 1991). Under his leadership, GM spent $42 billion between 1980 and 1987 to re-equip old factories and built seven new factories so as to make the production process automatic ("Living with," 1988). This project focuses on GM's automation attempt and compares its successes and failures with a small automobile factory in California. Ford Motor Company's (Ford) automation effort, generally regard as more successful than GM's, is also outlined in this paper as a contrast.