Gung Ho takes us back to the time many of us would like to forget: the recession of the1980s when American factories closed and the Japanese dominated the auto industry.

The movie takes place in a small Pennsylvania town where the close of a local auto factory has led to massive unemployment, the shuttering of countless stores, and a general loss of faith in American industry. Hunt Stevenson, a displaced auto worker with a gift of gab is elected by his co-workers to go to Japan to convince them to relocate a factory in the depressed town. Hunt travels to Japan in order to persuade the fictional Assan Motor Corporation to invest in the closed factory and bring the town back to life.

To his surprise, the Japanese come and employ several hundred American workers with Stevenson promoted to management as a liaison between the blue collar workers and the Japanese managers.

When the Assan executive jet arrives at the local airport, the town has assembled on the runaway to meet with hand-lettered signs saying "We Love Japan" and "We Love Assan". The crowd waves miniature Japanese and American flags, while a delegation of local women wear kimonos and the town's children demonstrate their minimal knowledge of karate. The town welcomes the Japanese with a certain reverence reserved for saviors and not for guests; the Japanese are inscrutable, but that only increases their allure because they possess the secret of prosperity. There is a powerful sense of foreboding about the impending superiority of the Japanese; their wealth seemed unlimited as they began to "buy up" America.

However, as soon as the factory fires up, there are problems stemming from the differing work ethics of the Japanese and Americans--the Japanese put the company ahead of their personal life, pride themselves on company success, and eschew paid overtime, sick leave, vacations, and breaks. On the other hand, the Americans are just the opposite; in their joy to have jobs again the American labor force has neglected to reform their old union-protected ways.

Unsurprisingly, these cultural differences lead the Americans begin to lose patience with the Japanese executives in charge of their factory.  In particular, the plant manager, Kazahiro, overcompensates for having been put on probation for being too "easy" on the workers in Japan --where he was required to wear “ribbons of shame” as he confessed his guilt to the executives and workers at the factory. Things are even more complicated for Kazhiro and Stevenson, as the Chairman of the Board's nephew is a member of the plant's executive team--and is constantly reporting back to his uncle about the shortcomings of the plant employees and management.

When the conflict becomes more than the Japanese can take, they threaten to pull out their investment and go home. Hoping to save the day, labor rep Stevenson persuades the Japanese factory boss to strike a deal: if the Americans can break the one-month production record set by Assan's Japanese workers, Assan will stay in Pennsylvania.

As the American workers discover the secrets of productivity and begin to outperform their legendary Japanese counterparts, the Japanese factory boss begins to embrace his workers' relaxed and individualistic style. Eventually, he stands up to his own boss and demands that both Japanese executive and American workers be allowed to take time off to spend with their pregnant wives and graduating children. Thus, what began as a film about American inferiority ends with each side embracing the best of each culture in an improbable synthesis.