US carmakers look to new Congress for protection from Japanese rivals
Clothespins from China, manhole covers from India, fishing lures from Mexico, cars from Japan, and steel from Europe all have one thing in common. They flood into the United States in such amounts that domestic makers of the same products cry "foul" and demand protection to save American jobs.
Some cases effects so few jobs or are so localized that decisions churned out by the International Trade Commission (ITC) and the White House cause scarcely a ripple of attention, except to people directly concerned.
Not so with cars steel, two industries basic to the US economy and employing, directly to indirectly, many millions of Americans.
Imports of steel already are restricted, so the spotlight falls on sutos, with Ford Motor Company and the United Automobile Workers (IAW) demanding protection from imports of Japanese cars.
"The question," said a Ford executive in Detroit, "is whether the United States needs a healthy automobile industry or not."
His implication: Without some limit on Japanese imports, perhaps for five years, Chrysler Corporation could go under and Ford would struggle desperately to regain it footing.
When Chrysler was in trouble in the mid-1950s the solution was simpler. The US Army threw a giant tank contract to the floundering auto firm.
Now things are more complex, with millions of Americans demanding small, fueld-efficient cars - a Japanese specialty. For some years to come, General Motors of Corporation, Ford, chrysler, and American Motors Corporation will be unable fully to satisfy that demand.
And American customers who have to turn to the imports may be lost to US auto firms for years. "There is such a thing as product loyalty," noted an experienced executive.
Concern is rampant in the paneled board rooms of Detroit that American who buy Japanese will refuse to come back to US-made models, even when there are plenty standing in the showrooms.
Rebuffed by the ITC in their plea for relief, Ford and the UAW -- backed strongly by Chrysler, lukewarmly by GM -- now look to Congress for away out. Their hope is that Congress will authorize Ronald Reagan, as president, to negotiate with the Japanese for a reduction in exports of cars to the US.
This could take the form of an "orderly marketing agreement" (OMA), such as the Japanese earlier signed in the case of color television sets, or a voluntary restraint agreement, less formal than an OMA.
Ideally, US carmakers would like to see Japanese shipments cut about in half, from the roughly 2 million units expected to enter the United States this year. This would be hard for the Japanese to swallow, since their market in Western Europe already is being slashed by governments within the European community (EC).
Even if Detroit obtains imports restraints, complex questions remain to be debated by the US government and the nation at large.
Should the government bail out faltering industries? Or should government help to instead to companies, often shy of capital, exploring new fields of technology? From the latter, some experts argue, will come the lift and thrust to revitalize the American economy, boost US exports, improve productivity, and help offset the huge US oil import bill.
Charles. L. Schultze, chief economic adviser to President Carter, says government should not be in the business of "picking winners and losers." Former Federal Reserve board chairman Arthur F. Burns says he believes that firms should learn to adapt and compete on their own.
Treasury Secretary G. William Miller, while against government intervention in principle, says that government is obliged "to make sure that the nation retains an industrial capacity that the US should not lose."
It was this criterion, plus the threat of widespread unemployment, the impelled him to support the federal government's current $1.5 billion loan guarantee program for chrysler.
Lost in the shuffle of this argument is the inflationbattered American consumer, looking for a quality car at a reasonable price.
With demand for Japanese models running strong, any reduction in their number is bound to push up prices, as families compete for imports.
Moreover, domestic automakers are likely to boost prices on their own small cars, especially if there are not enough to go around.