Keep US carmakers in the race
United Auto Workers President Douglas Fraser has been in Tokyo warning Japan's car manufacturers to restrict their exports to the US or face Congress-imposed quotas on Toyotas, Datsuns, and other models Americans are turning to in increasing numbers. The Fraser lobbying is a sign of deep problems in the US auto industry. With some 200,000 auto workers laid off and US auto sales dropping (down 30.4 percent in the first 10 days of February from last year, their lowest level for the period in almost 20 years) America's carmakers are concerned that foreign imports, led by those from Japan, are taking an ever larger bite out of the US market.
Something must be done to pump new vitality into the US industry. The current trend, if allowed to persist, will create more economic hardship for production workers and have a deleterious effect on the US economy. It would be a mistake, however, for the US industry to place all of the blame for its slumping sales on Japan's and other foreign imports. As Japanese manufacturers are quick to note, the "true" reason their motor vehicles sell better is that escalating gasoline prices have created an overwhelming demand in the US for fuel-efficient cars. And US automakers, partly because of poor management decisions and partly due to increased government safety and environmental regulations, have been slower to give the American car-buying public what it wants.
Protectionist measured by the US are not the answers. They could very well lead to retaliation by Japan and thereby further increase tensions between the two trading partners. Japan ought to be more forthcoming in trying to ease its trade imbalances. And the government in Tokyo, sensitive to the criticism in the US, is, in fact, urging Nissan and Datsun limit their sales in the US. Such steps may help in the short run. Convincing Japanese firms to make parts and build assembly-line plants in the US would help even more. Honda Motor Company already is committed to constructing a $200 million assembly plant in Ohio, and other Japanese manufacturers are said to be giving serious consideration to similar moves.
One concern of Japanese auto executives considering a shift of operations to the US is whether Americans will adhere to their exacting standards of quality control. Although modern quality-control techniques originated in the US in the 1920s, foreign carmakers, those of Japan and West Germany in particular, have acquired in recent years a reputation as producers of reasonably priced cars of superior workmanship and dependable performance. Foreign importers, for instance, generally have fewer autos recalled for safety defects than do US carmakers.
The long-term solution lies not in Tokyo but in Detroit -- in sharpening the American industry's ability not only to produce fuel-efficient cars but to raise production and quality standards to meet the competition from abroad. When Volkswagen opened its first US assembly line two years ago, more than 10 percent of its American-made components had to be rejected because they failed to match VW's European standards. Since that time, quality control has improved and VW officials today say they are pleased with the US components they are getting. Such experiences show the challenge management and workers in the auto industry must face up to. More important, they show that American industry is capable of meeting that challenge.