The rise and fall of the auto men's empires; Japan corners the car market

Less than two decades ago a Japanese automobile was as rare in the United States as a McDonald's Big Mac in downtown Tokyo. But today Toyotas, Datsuns, Hondas, and other Japanese cars clog Us showrooms, jam garages, and line streets.

In fact, Japanese imports are so commonplace (capturing 21 percent of the market in the first quarter of 1980) that US officials are stepping up pressure on the Japanese to help offset the influx.

US politicians and union leaders want Japanese car manufacturers to build assembly plants in the US (manned by local workers) and open up the domesstic Japanese market to American manufacturers. But the Japanese, in what could be the first skirmish of the "1980s auto war," are resisting.

They don't want to risk pumping millions of dollars into US-based plants "just to be dragged into the same ring as American automakers" and then squashed , as one Japanese company official puts it.

How well the Japanese handle the American pressure will likely affect future car options in other markets, notably Europe, which are equally sensitive to the recent inroads made by the fuel-efficient small Japanese cars.

Japan's $40-billion-a-year motor industry has built a formidable world empire. In the past two decades, Japanese foreign car sales have ballooned from a few thousand to more than 3 million -- making it the world's largest car exporter.

Painfully aware of this, blunt-speaking Douglas Fraser, head of the United Automobile Workers Union, warned here recently that the Japanese must build US plants to help offset labor layoffs "or else face the consequences." The union chief blamed the expanding import market for idling 200,000 of his members.

US trade representatives sounded a similar -- though not so virulent -- note during talks with Japanese trade officials in Tokyo.

In response, Japan recently announced it will cut tariffs on imported cars next year, investigate the possibility of purchasing more US auto parts, and ease some technical standards that have made it hard to bring foreign cars here.

US trade officials welcomed the moves but still want more "give" from Japanese companies.Some US congressmen want to impose restrictions on Japanese imports, a move the Carter administration has resisted so far.

With few exceptions, Japanese automakers have steered away from setting up US plants.

The Nissan Motor Company recently announced it will open a US-based Datsun truck plant in about three years. It is expected to employ 2,200 local workers. Honda, Japan's third-largest automaker, is planning a $200 million plant in Marysville, Ohio.

Nevertheless, Japan's biggest automaker, Toyota, and to a lesser extent Nissan, balk at competing with US automakers head-on at a time when they are trying to funnel money into new-car technology.

Toyota president Eiji Toyoda believes the current car row stems from a larger problem: a growing belief in Washington that the Japanese have economically profited too long while enjoying a "free ride" under American military protection.

Toyota and Nissan officials also point out that their current corner on the US small-car market will likely be short-lived. The "big three" US companies -- Ford, General Motors, and Chrysler -- are retooling rapidly to meet domestic demand for more fuel-efficient cars. And the Japanese expect the US automakers to be able to meet domestic demand within three years -- about the time new Japanese plants would begin production.

The US switch to small-car production will help ease the current layoff problems, they add.

Even if they were to set up US plants, Japanese company officials argue, the market would support only small production facilities (about 240,000 cars year) -- hardly enough to compete with the more than 6 million cars a year GM churns out.

Perhaps the key reason for the Japanese recalcitrance, however, is that company officials want to pump whatever money is available into innovations. Technology is changing so fast the Japanese don't want to commit themselves to peripheral projects until they can see what challenges the Americans and Europeans are going to mount in the next five years.

Innovation, after all, has been Japan's key to success so far. Despite Western beliefs that Japan is blessed with low-priced, docile laborers, the real breakthrough for their automobile industry has come from swiveling, whirring, bobbing, industrial robots. (Japanese labor costs, nonetheless, still run about one-half the US level.)

Nissan's touted Zama plant near Tokyo, for instance, relies on robots for 96 percent for its spot-welding work. Toyota, up to now hesitant to replace men with machines, is planning to plug 720 robots into its Tahara plant in central Japan.

Fitted with humnalike joints, these assembly-line "workers" will perform 10 different types of tasks under computer control.

Nissan hopes soon to put multi-operational robots to work painting and pressing car bodies. Toyota also plans to automate painting operations. Other smaller Japanese carmakers are following suit.

With robots filling the assembly lines, humans are focusing on research and development. Manufacturers are exploring ways to produce lighter-bodied cars, more friction-free parts, and wider use of microchip computer parts to enhance fuel economy and safety. only when these problems have been solved, say the Japanese, will they want to take a harder look at building plants in the US.

You've read  of  free articles. Subscribe to continue.
QR Code to The rise and fall of the auto men's empires; Japan corners the car market
Read this article in
QR Code to Subscription page
Start your subscription today