What killed Diamond-Star Motors?

John Ryan wasn’t old enough to drive when the first cars rolled off the assembly line at Diamond-Star Motors in the late 1980s. But once Ryan got his hands on an Eagle Talon, he held on tight.

“I really love ’em,” said the Michigan resident, who has been buying, repairing and selling Talons and Plymouth Lasers for almost two decades. “They handle well for the car’s weight; you can toss ’em into a corner pretty hard. And the acceleration is fantastic – if you can get them to shift. It seems like the transmission is torn up in every one that I get because everybody drives them like they’re supercars.”

Ryan, 36, said he has owned 58 Talons/Lasers since he bought his first one, a 1990 Talon, in 1997. “That’s the only non-turbo Talon I’ve ever owned,” said Ryan, who still owns two, one of which he used to race. “They’re just great cars for the money. Easy to work on and boost the power, and cheap to modify. I definitely would’ve bought one new if I had been older when they came out.”

So what led to Diamond-Star’s demise? DSM’s story reads a lot like a marriage counselor’s notebook. Chrysler and Mitsubishi met on the dance floor in the 1970s, intensified their relationship in the early ’80s, and then decided – in spite of some red flags – to tie the knot and become Mr. and Mrs. Diamond-Star Motors in 1985. Oh, sure, things were good for a bit. But communication was an issue, secrets were kept and the two eventually grew apart. Divorce was inevitable.

Fortunately for the automotive world, even the most turbulent of relationships sometime produce great offspring. Take Ryan’s beloved Talon/Laser, for instance. The Eagle-Plymouth duo and Mitsubishi Eclipse are basically the same vehicles – front-wheel or all-wheel drive 2+2 sports cars – with different badges, all built at DSM.

Diamond-Star’s roots can be traced to the early 1970s, when Mitsubishi began looking to expand into foreign markets and Chrysler stepped up and purchased 15 percent of the company’s stock. The deal proved mutually beneficial. Chrysler filled a void at the lower end of in its lineup with the Dodge Colt – also known as the Mitsubishi Galant – and Mitsubishi gained exposure and legitimacy outside Japan.

Burton Bouwkamp, a former Chrysler product planner and Mitsubishi Motors Board member, told Allpar.com: “Both Mitsubishi and Chrysler were looking for partners and found each other. Lynn Townsend (Chrysler VP of International at the time) wanted Chrysler to be a global company, and Mitsubishi Heavy Industries (MHI) wanted someone to teach its automotive subsidiary, Mitsubishi Motors Corporation (MMC), how to make money in the car business. MMC was a wholly owned subsidiary of MHI and had seldom – if ever – returned a profit to the parent company.”

That soon changed. MMC’s annual automobile production passed 1 million in 1980, and – according to FundingUniverse.com – by 1982 Chrysler was importing 110,000 Mitsubishis annually. MMC also began selling directly to Americans through its own U.S. dealerships. There was one little problem: A voluntary import limit was in place, and every Mitsubishi sold went against Chrysler’s quota. Awkward to say the least.

The solution? Joining other Japanese automakers who began building production facilities in the U.S. to avoid these import quotas, Mitsubishi and Chrysler formed Diamond-Star Motors in 1985. Diamond-Star, a name derived from the companies’ diamond and star logos, immediately broke ground on a 1,900,000-square-foot plant in Normal, Ill. According to Allpar.com, although Chrysler put up 50 percent of the $650 million necessary to build the facility, it left management to Mitsubishi. In addition, MMC’s Japanese facilities provided engines and transmissions.

The DSM plant, with an annual capacity of 240,000 vehicles, was completed in March 1988. Diamond-Star’s Eclipse / Laser / Talon were well received, but overall auto production never approached capacity. In 1991, with Chrysler in financial woes, the automaker sold its half of DSM to Mitsubishi. By 1995, DSM was no more – officially renamed Mitsubishi Motor Manufacturing of America.

Bouwkamp told Allpar.com that while Mitsubishi and Chrysler’s styling departments collaborated at DSM, their engineering and manufacturing departments did not. He wished they had. “MMC’s manufacturing quality was much better than Chrysler’s. We could have learned a lot from MMC.”

On the other hand, Bouwkamp said there was a lack of transparency, exacerbated by cultural barriers. “My office was across the street from MMC and I was on their Board of Directors. I saw MMC personnel nearly every day and our relations were very good, but I never felt that I really knew what was going on. For example, I had no real visibility of their product costs – neither tooling cost nor part cost. I was an observer and the picture was fuzzy. MMC personnel were always very polite to me … (but) I did not get the level of detail that I wanted. Language was obviously part of the problem. Another part was cultural; Japanese are taught to only answer the question asked and not to volunteer information broader than the specific question.”

The former DSM plant continued building automobiles for Mitsubishi for two decades – including the Outlander SUV and electric i-MiEV – but production there ended in November 2015 as MMC announced it wanted to focus on the Asian market.

No obituary would be complete without highlighting the deceased’s accomplishments. Arguably the best-known Diamond-Star products are the aforementioned Eclipse / Laser / Talon. First-generation DSMs were powered by Mitsubishi’s 1.8-liter and 2.0-liter inline-four engines or (in the Eclipse GS Turbo, all-wheel-drive Eclipse GSX, Talon TSi and all-wheel-drive Talon TSi) a turbocharged 2.0-liter 16-valve DOHC 4G63T.

Diamond-Star dropped the Laser after the 1994 model year, but second-gen Eclipses and Talons carried either naturally aspirated 2.0- or 2.4-liter inline-fours, or the turbocharged 2.0-liter 4G63T (in the Eclipse GS-T, Eclipse Spyder GS-T, Eclipse GSX and Talon TSi). Buyers could choose a four-speed automatic or five-speed manual transmission.

Other cars built at the Diamond-Star plant during the MMC-Chrysler years were the Mitsubishi Mirage/Lancer, Plymouth Colt and Eagle Summit. While fans like John Ryan can only imagine what might have been, he chooses to look on the bright side.

“At least they built what they did,” he said.

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