Addressing a group of 450 civic leaders at the Plaza Hotel in Manhattan on Oct. 3, 1968, the chairman of General Motors, James Roche, did something almost sacrilegious for an auto executive: He talked about a future product.

Roche boldly announced that in the fall of 1970, GM would begin producing a small car designed for the U.S. market and priced from $1,900 to $2,300. Developed under the code name XP-887, the subcompact would be about a foot shorter than GM’s smallest offering at the time, the Chevrolet Corvair.

And it would, no doubt, be better than that star-crossed and litigation-plagued import fighter from a decade earlier.

Roche’s plan was largely a reaction to the commercial threat presented by import brands, which were increasingly attracting young buyers. In 1968, the domestic automakers sold nine out of 10 new cars in America. But import sales were expected to top 1 million in 1969 — a number even Detroit couldn’t ignore.

But in answering that challenge, U.S. automakers were by the end of 1970 producing three of the most notoriously awful cars ever built — the American Motors Gremlin, Chevrolet Vega and Ford Pinto — and opening the door for the Japanese onslaught of the 1970s and 1980s.

The new models were so terrible that even 40 years later, some shoppers still won’t consider Detroit’s brands. Their flaws made for cars that comedians would savage, liability lawyers would chase and crestfallen owners would try to pawn off on unsuspecting victims.

“Led by General Motors, the giant domestic auto industry was going to flex its muscle and swat the pesky fly of imported cars off its shoulder,” John DeLorean, the former Chevrolet general manager, wrote in his 1979 book “On a Clear Day You Can See General Motors.”

The Gremlin, Vega and Pinto were small enough to compare directly with the import standard bearer of the time, the Volkswagen Beetle. All three of the domestic entries were conventional designs — shrunken versions of the era’s gargantuan sedans — with their engines in front driving the rear wheels.

Shifting culture

GM’s ambitions for the XP-887, which would become the Vega, were huge. Instead of being developed by the engineering staff of a single brand, the Vega was designed by the corporate engineering staff under the direction of Edward Cole, an executive vice president. It was then handed to Chevrolet’s managers to sell.

The Vega would be an all-new car unrelated to any other in GM’s portfolio, using an all-new engine, and it would be built at the company’s newest, most automated plant, in Lordstown, Ohio.

“The Vega came just as the bean counters were rising at GM,” said John Heitmann, a professor of history at the University of Dayton, about GM’s changing corporate culture.

“From the first day I stepped into the Chevrolet division, in 1969, it was obvious that the Vega was in real trouble,” DeLorean wrote. “General Motors was pinning its image and prestige on this car, and there was practically no interest in it in the division.”

Chevrolet had proposed its own small-car design and was turned down; as production approached, the Chevy staff’s disdain for the corporate model — heavy for its size and more costly to produce — grew.

Worst of all, its 4-cylinder engine was an unfortunate mix of innovation and archaic design. The cylinder head was made of cast iron, a conventional practice for the time, but a special aluminum alloy was chosen for the engine block.

“What resulted,” DeLorean wrote, “was a relatively large, noisy, top-heavy combination of aluminum and iron, which cost far too much to build, looked like it had been taken off a 1920 farm tractor and weighed more than the cast-iron engine Chevy had proposed, or the foreign-built 4-cylinder engine the Ford Pinto was to use.”

‘Something has to give’

Like the Vega, the 1971 Pinto was engineered to a tough $2,000 price point with an equally tough 2,000-pound weight goal. The base engine was a 1.6-liter 4-cylinder rated at 75 horsepower; a 100-horsepower 2-liter 4 was optional.

“The Pinto is rolling proof of an economic fact of life,” a 1971 car test in The New York Times observed. “In building an American car for the $2,000 market something has to give. Pinto disappoints in acceleration, braking, ride quality and rear-seat comfort.”

American Motors, though much smaller than Ford and GM, decided that despite its scant resources it needed a small car to retain the budget-minded buyers who had been loyal Rambler owners. It was forced to punt.

Instead of engineering a new car, the company’s design chief, Dick Teague, took the existing Hornet compact car, knocked 12 inches out of its wheelbase (down to 96 inches) and eliminated virtually all of the sheet metal beyond the rear wheels. The awkwardly proportioned result was named the Gremlin.

The biggest advantage for American Motors of this simplified product development scheme was that the Gremlin reached the market in April 1970, about five months before the Vega and Pinto. Lacking the resources to develop a 4-cylinder engine, AMC resorted to installing either 3.3- or 3.8-liter versions of the Rambler in-line 6 in the Gremlin.

Weirdly unbalanced, the nose-heavy Gremlin was primitive even in the context of the early 1970s. It was noisy and handled poorly — and like every AMC product suffered from haphazard quality control.

A giant letdown

The problem wasn’t that the Vega, Pinto and Gremlin didn’t sell. Kept alive by their makers through the ’70s fuel crises, they sold by the millions over long production lives that covered much of the ’70s. The disaster was that they let down so many Americans.

In 1968 Toyota, Datsun and VW were more of a nuisance than a threat, and Honda was still a year away from selling its first car in the United States. But by 1980, partly because of the door left open to them by the failed Detroit subcompacts, those imports were firmly established as value leaders.

“The Pinto, Gremlin and Vega represented everything that Toyota was not,” said Heitmann, the historian.

Four decades later, Detroit is still fighting the perception that it doesn’t take small cars seriously. But with tougher fuel economy rules coming, getting past the stigma of the small ’70s cars is more important than ever.