American car company executives were definitely arrogant but that came because of success. They saw the other American car manufacturers as the only serious competition. Frankly in the 1960s anything coming from Japan was an unreliable joke...except the rust bucket Toyota Landcruiser which was a design completely funded by the U.S. government to help get post-WW2 Japan's manufacturing back on it's feet (it's pushrod straight-6 engine was a direct copy of GMs truck engine of the era.)
The path to defeat begins with underestimating the competition.
Ironically after WW2 and Japan's reconstruction (with much U.S. funding) the all-new factories in Japan were in better condition than most plants in the U.S. The plant that built my F-150 was built in 1925 and in continuous production through the depression and in WW2 was used to repair/maintain amphibious landing craft. Minor upgrades were done through the years but major renovation didn't begin until the 1980's.
American manufacturers built the cars that Americans wanted in those decades the numbers prove that. For unique fuel efficient cars VW's Beetle and a number of British sports cars were popular options for American car buyers.
The real question then is: Since Volkswagen and the British sports cars were well established and fuel efficient how did the Japanese take over that part of the market when the 1973 fuel crisis hit? Volkswagen especially was in the perfect position to capitalize and failed. American car companies were suddenly forced to try to quickly design and build little 4-cylinder economy cars which they had no experience with but the European's had been doing it for decades.
Add to the perfect storm the condition of the American economy in the mid 1970's, exactly when U.S. manufacturers needed to invest big money into all new and what they still considered low profit margin economy cars.
