Washington Gives Detroit Spies, Money, Technology

Auto industry now seen as crucial to the economy

COVERT and overt, the Big Three are getting a helping hand from Big Brother.

Until recently, the role the United States government was best known for playing in the auto industry was to set new - and usually unwelcomed - regulations. But times have changed. With General Motors Corporation, Ford Motor Company, and Chrysler Corporation facing tougher global competition, Uncle Sam is rethinking his strategy. As a result, Detroit's automakers are being offered a wide range of government services. That means money, access to federal research labs, even the assistance of the Central Intelligence Agency (CIA).

``After years of fighting each other, the auto industry and government are learning to work together toward common goals,'' said Andrew Card Jr., president of the American Automobile Manufacturers Association, during a speech in Detroit on Oct. 3.

Why the change? Washington now perceives the auto industry as crucial to the nation's economic health. Despite its internal problems, GM still leads the Fortune 500. The carmakers, as a group, employ nearly 1 in 7 Americans, directly or indirectly. Automobiles and automotive parts account for nearly three-fourths of the yawning US-Japan trade deficit. And Japanese and European governments already provide extensive aid to their own automakers.

``The security of the United States today is as dependent on its industrial vitality as it is on its defense,'' says Mary Good, undersecretary for technology at the US Department of Commerce.

The first steps were taken six years ago, when federal lawmakers eased long-standing antitrust rules, permitting the Big Three to begin joint research work on areas of ``pre-proprietary'' technology. In other words, they could work together on advanced battery technology or the materials that might someday be used to make safer, lighter-weight cars.

Today, there are 13 separate research consortia organized under the umbrella of the US Council for Automotive Research, or USCAR, which was formed in June 1992. And the number is still growing.

Perhaps the most unusual industry-government ties are being forged between the Big Three and the CIA. Citing a growing threat from industrial espionage and bribery, CIA director R. James Woolsey has ordered the agency to begin working on behalf of US manufacturers. The CIA won't break into research and development labs at Toyota, Woolsey insists, but it will try to block spies from learning American trade secrets. ``The thing that has the largest dollar impact is bribery,'' he says, noting that payoffs are especially common in some emerging countries, where a slush fund can be a more-effective business tool than an efficient assembly line.

``In the past year,'' Woolsey boasted after meeting Oct. 7 with top US automaker officials, ``(CIA) intelligence ... has saved over $10 billion in contracts for US companies.''

The biggest, most ambitious joint industry-government program, the Partnership for a New Generation Vehicle (PNGV), was launched in the early days of the Clinton administration. The PNGV, or Supercar, program goals are heady: Over the next decade, develop a vehicle that will triple the mileage of today's typical family sedan, meet the toughest new emissions standards, and be safer than current models. ``The emphasis is to maintain ... the affordability of the vehicle,'' stresses Ron York, GM's top executive with PNGV. He explains that it must cost about the same, in 1994 dollars, as today's average passenger car.

The automakers have long fought proposals to boost fuel-economy standards to 40 miles per gallon, claiming the technology is not available. Yet with PNGV, they're suggesting the 80 m.p.g. mark is within reach.

The federal government is expected to kick in about $275 million to fund PNGV. But it is the access that has auto engineers excited. Washington has flung open the doors to federal research labs, revealing a treasure trove of data and technology.

New industry-government programs are appearing almost every other month. This month, Ford entered into a two-year cooperative program with NASA's Langley Research Center, which will include research into carbon-fiber piston technology and highly sophisticated computer modeling.

So far, the new industry-government efforts have excluded Europe and Japan. ``You should not use public money if it does not bring value to the United States,'' Dr. Good argues. But others say similar industry-government programs are now under way in Europe and Japan. In some areas such as highway navigation, these projects are better-funded and further along.

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