Going to the referee on Japanese cars vs. Detroit
Has a flood of Japanese imports caused "substantial injury" to America's troubled carmakers? The question seems obvious, at a time when thousands of US automobile workers are idle and every fourth car sold in an American showroom was built in Japan.
But the answer is far from simple, as three men and two women in Washington -- members of the International Trade Commission (ITC) -- are finding out.
This week they open hearings on the matter, and so great is the crowd of witnesses expected that the proceedings will be held, aptly enough, in the Great Hall of Justice of the US Justice Department.
Most major carmakers -- American, Japanese, and European -- will be represented at the hearings, for a great deal of money in future years rides on what the ITC finds and reports to President Carter.
Technically, the Hearings will probe the impact of all foreign car imports on the domestic industry. But everyone knows the real target is Japan.
Petitioners seeking relief from Japanese imports are the United Automobile Workers (UAW), representing American workers in the industry, and the Ford Motor Company.
They want time to get America's small, fuel-efficient, front-wheel-drive cars on the market before too many Americans develop "product loyalty" for their Hondas, Toyotas, and Datsuns.
Serving "as a focal point for the parties and the commissioners," said ITC chairman Bill Alberger in a telephone interview, is a recent staff report on the problem.
Although the staff study "gave no weight to the various factors it cited," said Mr. Alberger, the report -- setting out the factual basis of the situation -- appears to offer little encouragement to those seeking relief.
Under its mandate, the ITC can find that Japanese cars have caused "substantial injury" to US carmakers only if no other factor is shown to be greater
Everyone knows that all four American car manufacturers -- General Motors, Ford, Chrysler, and American Motors -- are suffering whopping financial losses this year. But why?
IF, for example, US motorists -- to beat the rising price of gasoline -- are switching to small cars faster than US makers can supply them, imports may not be a preeminent cause of the industry's troubles.
Japanese cars, in this context, would simply be filling a gap that American makers could not fill.
That is exactly what the ITC staff report seems to suggest -- that "the shift from larger cars appears greater than the shift to imports."
This falling-off of large-car sales, the study says, was related to an "abrupt change in the price and availability of gasoline."
The five commissioners, not the staffers who wrote the preliminary report, will make the finding, and the petitioners for relief have yet to speak their piece.
If the ITC finds no substantial injury, the matter ends. If the commission decides imports have caused serious injury, it forwards a relief recommendation -- quotas, tariffs, or whatever -- to President Carter.
The President, due to receive such a recommendation Nov. 24, would have 60 days to accept, modify, or reject the ITC's finding.
Congress then would have 90 working days to override, by majority vote of both chambers, the President's decision. "This," said an ITC official, "is the 44th case to be handled under this provision of the law, with no override yet."
Supporting the UAW and Ford petitions are parts suppliers to the auto industry, plus trade unions representing workers in the parts industry.
Opponents of the petition, who will argue for no restrictions on imports, include the Automobile Importers of America and the Japanese Automobile Manufacturers Association, representing Toyota, Nissan (Datsun), Honda, and Subaru. Other opponents include major European carmakers, such as Fiat, Peugeot , Mercedes-Benz, and Volvo.
Although these European makers want no curbs on their ability to send cars to the United States, they are -- back in their home countries -- up in arms against Japanese car imports into Europe, and are pressing their governments to negotiate limits with Tokyo.