Reagan steers cautiously down US auto industry's rocky road

The Reagan administration is edging into the vast problems of the US auto industry with all the caution of a tightrope walker without a safety net. The White House finds itself, says Vice-President George Bush, in "a delicately balanced situation," trying to fend off pressures from contending interest groups.

Two background facts dominate the growing debate over the future of the once-mighty US automobile industry:

* Carmakers suffered a record $4.3 billion loss in 1980 and nearly 600,000 American workers are jobless because of the domestic sales slump.

* Japanese models, meanwhile, continue to sell briskly to American customers, who appear to be building up product loyalty to the imports.

Caught in the middle, the White House hopes the Japanese will take the hint and send fewer cars than the 1.9 million they shipped to the United States last year.

But, said Mr. Bush, the United States is not "suggesting to the Japanese what they should voluntarily do."

Nor, said the vice-president, does the administration "support legislation that would impose limits" on the importation of Japanese cars.

"We want to avoid," he said, "starting down that slippery slope of protectionism," whereby nations begin to shut their doors on each other's goods.

Meanwhile, President Reagan's auto task force wants to eliminate, relax, or postpone 34 environmental and safety regulations, an action designed to save domestic carmakers $1.4 billion in capital costs over the next five years.

Since these and other "stringent" regulations "add hundreds of dollars to the cost of each vehicle," says a White House background report, erasing or relaxing them should save car buyers $9.3 billion over the same period.

Top officials of GM, Ford, and Chrysler have pledged to pass their savings on to consumers, according to Secretary of Transportation Drew Lewis, although the administration -- determined to keep hands off marketplace decisions -- did not press them to do so.

Emission standards for cars and trucks would be relaxed, among other things. Bumpers would be built to withstand a 2.5 m.p.h. collision, not 5 m.p.h., and a requirement that large cars be equipped with a "passive restraint" system -- airbag or automatic seat belt -- will be postponed for a year.

The latter change, Mr. Lewis said, would not cause 600 additional fatalities, as some critics charge, but perhaps 10 to 50. Studies indicate, he said, that most car owners would disconnect the automatic system in any case. If people used already existing seat belts, many more lives would be saved, he maintained.

The White House plan reflects two convictions held by a majority of Reagan aides:

* Many regulations designed to improve air quality and passenger safety are not worth the cost.

* Reducing regulatory burdens is the least costly way to dissipate industry pressure for more explicit relief from Japanese imports.

Although US carmakers welcome the plan, Ford, at least -- buttressed strongly by the United Automobile Workers -- is expected to keep pressing for some kind of limit on the import of Japanese cars.

Both Bush and Lewis stressed that a "vibrant" US auto industry needs, above all, economic recovery in the United States, based on lower inflation and lower interest rates.

Regulatory changes, said Bush, are "not by a long shot the sum total" of relief planned by the White House. The plight of the huge automobile industry -- which one way or the other accounts for one out of every six American jobs -- "is an ongoing problem of enormous concern."

Although the plan may be challenged by environmental groups, it represents a victory for those Reagan aides opposed to clamping limits on Japanese imports.

A team of US officials is in Tokyo, to brief the Japanese on the Reagan plan and, no doubt, to listen for any hint that Tokyo voluntarily may cut back on shipments to the United States. Proposed rules changes

Among revisions proposed by the National Highway Traffic Safety Administration and the Environmental Protection Agency:

* A review of the requirement all cars have passive restraints -- either automatic safety belts or airbags -- by model year 1984.

* Dropping standards requiring uniform bumper heights and requiring both front and rear bumpers be able to absorb shock up to 5 m.p.h.

* Rescinding a rule calling for redesigning windshields so drivers have unobstructed vision.

* Withdrawing plans to begin forming a rule for fuel-economy standards after 1986.

* Review and possibly simplify a complex uniform tire-quality grading system recently enacted by the government.

* Scrapping a standard for high-altitude auto exhausts, scheduled to take effect in 1984.

* Releasing manufacturers from a requirement that they install devices to capture fumes as they escape during refueling.

* Relaxing 1984 model-year emissions standards for large trucks.

* Delaying and relaxing nitrogen oxide emission limits for heavy-duty engines.

* Letting automakers calculate diesel exhaust standards for cars and light trucks on an average, r ather than per-vehicle basis, beginning with 1985 models.