In 1970, the first All-American subcompacts rolled off the assembly line. Most of them were terrible. There was the Chevrolet Vega which had a habit of blowing head gaskets and the Ford Pinto which gained a reputation for bursting into flames. Only little AMC came out with a reasonably good subcompact, the Gremlin, and even that was widely panned for its styling, the result of taking the larger Hornet and lobbing off the trunk.
Now, GM and Ford were capable of producing non awful small cars. You only need to look at their European divisions. The Ford Escort, introduced in 1968, was a huge sales hit and had a positive reputation.
So did GM's West German built Opel Kadett, which in fact was sold in Buick dealers simply as the Opel.
Chrysler opted to go with the captive import route. In fact they did it with two cars: the Mitsubishi Colt was imported as a Dodge and from their British division, the Hillman Avenger was imported as the Plymouth Cricket. The Cricket was typically 1970s British in its quality and sold poorly before it was removed from the market in 1973 after just 2 years. The Colt however did very well.
So what if Ford imported the Escort instead of designing the Pinto and the Opel Kadett got rebadged as a Chevrolet instead of having the Vega?