The `soft drama' of the Japanese-American trade relationship

The Reckoning, by David Halberstam. New York: William Morrow & Co. 752 pp. $19.95. Japan's rising star profoundly affects American thinking. It makes many Americans wonder if somehow the work ethic that has stood America in such good stead for two centuries has been lost, or perhaps superseded by a more dynamic Japanese ethic.

Is Japan what America once was? Is it lean and hungry while America loosens its belt another notch and drowses in front of the TV set?

The evidence taunts Americans.

Once supreme in the world, Detroit is going through a painful, protracted implosion, with workers losing their jobs and auto giants ceding more and more market and profits to Japan. A huge new set of General Motors layoffs and factory closings announced earlier this month was the latest sign of radical restructuring; it will not be the last.

America's gadget industry - televisions, stereos, cameras, video recorders, calculators, and so on - is already primarily in the hands of Japan and other Asian nations. Japan is challenging the United States semiconductor and computer industries as never before. To produce all these goods, Japanese factories are opening throughout the United States, and Americans - some of whom remember well the war in the Pacific - are working for Japanese bosses.

Newly enriched from all this marketplace success, Japan's banks, now the largest in the world, are looking for more and more American acquisitions. Everywhere, it seems Japanese industry is on the march, American industry in retreat.

The story of Japan and the US today is a complex one. It is not the story of a few key individuals, nor of a relatively brief, intense episode such as World War II. It is ongoing history that is as broad as the sum total of a hundred thousand business decisions made each week by workers, executives, consumers, and politicians.

Business schools, business pages, and business books are filled with studies of Japanese efficiency, quality control, inventory systems, and trading strategies. There is no dispute among economists and historians that Japan has come into its own as an economic superpower. But reasons for this differ enormously.

To some, it has to do with Japanese production and marketing prowess. To others, it is because of unfair Japanese trading practices coupled with naive ``free trade'' theories in Washington. And to yet others, it is a matter of exchange-rate differences that, when adjusted, will eventually reverse the pattern.

David Halberstam - that most prodigious of American journalists, author of ``The Best and the Brightest'' and ``The Powers That Be'' - is perhaps the perfect writer to frame up this Japan-America trade relationship. Master of exhaustive research and fascinating digression, Mr. Halberstam juxtaposes Ford and Nissan in a manner he refers to as ``soft drama''; that is, he recounts incremental developments over the years that slowly amount to profound change.

Ford is a company that epitomized American mass production and innovation in its early years, then lost its way. Nissan, on the other hand, crawled out of the devastation of World War II, fought long, punishing battles with Japanese unions, and gained inch by inch against the US auto industry.

In immensely readable and exhaustive detail, Halberstam shows how America's auto industry failed itself, its workers, and its public through inept management, rigid thinking, and wrongheaded practices. Perks and megadollar bonuses for executives, for instance, persisted even as auto workers were conceding wages and benefits to help their employers survive.

Slowly, however, American auto companies have been improving quality. Ford, in fact, is leading the way and for the moment appears to be in good financial shape. But Halberstam warns that the Japanese are growing ever stronger.

``Pushed,'' he says, ``by their own demonic need for excellence and their own fierce domestic competition, pushed as well by the vision of an ascending Korea, pushed by the fear of a resurgent America - the battle of Midway all over again - pushed above all by a cultural spirit that made them more comfortable in adversity than in success, they [are] getting better at a striking rate.''

The story is not over yet. Just as in world war America has used devastating weapons of last resort, it might do so in trade war. Protectionist shields could rise - at tremendous cost to Japan, the rest of the trading world, and the ideal of global commerce. It would not be a good move, and it might yet be prevented if, as recent economic data indicate, US-Japan trade patterns turn around.

Japan today is the object of American fascination, admiration, and foreboding. There is little interest in the out-dated ideological values of the Soviet Union. Europe is nice, but rather unexciting. China, Brazil, and a dozen other nations represent potential competition. But at this particular hour, Japan is on America's mind like no other country.

David Halberstam's book is a perfect backgrounder, and new chapters are being written in news reports, in investment decisions, and at the marketplace every day.

John Yemma is the Monitor's business editor.