PUBLIC OPINION IS CRUCIAL AS CARMAKERS MULL A `DUMPING' SUIT
If the Big Three American carmakers charge their import competitors with trade fraud, Japanese automakers warn they will fight back in both the courts and the press.
The American carmakers are expected to file a "dumping" claim on Feb. 12, alleging that Honda, Toyota, and other importers are selling vehicles in the United States for less than they cost back in Japan.
"It's not for protectionism, it's for the defense of free trade all over the world," Ford Motor Company chairman Harold Poling said during a recent speech to automobile dealers gathered in New Orleans.
If and when a suit is filed, it will be turned over to the US Commerce Department for investigation. If the agency sides with the Big Three, it will then be up to the International Trade Commission to rule whether that dumping resulted in any damages. If the answer is again yes, the Japanese could be faced with large fines and new tariffs.
The Big Three hope to enlist public support by pointing to the massive - and growing - trade deficit with Japan. Autos and auto parts accounted for three-quarters of that deficit, or $33 billion last year.
But the Japanese are already launching their own public-relations campaign, insisting the Big Three are simply trying to restrict access to the US market in order to drive up prices.
"The proposals are alarming and self-centered," says Toyota vice president J. Davis Illingworth, warning that the charges "could lead to a global trade war."
Or at least a domestic one.
"We're looking at all our options, including the possibility of legal action," says Dick Recchia, executive vice president of Mitsubishi Motor Sales of America.
Japanese industry officials suggest they may go to court charging the Big Three with restraint of trade, price-fixing, and antitrust violations.
Worried about a possible public-opinion backlash, General Motors president John Smith says he may back away from the dumping suit, noting that the review "has as much to do with what the press thinks of the data as the data itself."
Top Big Three executives hope to reach a consensus decision by Feb. 12.