Congress pens 'Made in US' labels

Baseball, hot dogs, apple pie, and . . . Toyota?

This week, a congressional committee will likely approve legislation requiring something new under the hood of many foreign cars: a sticker saying ''Made in USA.''

Under the bill, most cars sold in the United States would have to contain high percentages of domestically made parts. Part political reaction to high unemployment, part frustration at the continued success of Japanese automakers, this domestic-content legislation is the latest move in a struggle that will culminate next spring when Japan's self-imposed limit on auto exports to the US comes up for reconsideration.

The proposed legislation is ''very dangerous,'' and ''must not pass,'' William Brock, US special trade representative, said Sept. 12.

''It's jobs legislation, pure and simple,'' counter full-page newspaper ads from the United Automobile Workers, primary supporters of the move.

The proposed Fair Practices in Automotive Products Act, sponsored by Rep. Richard L. Ottinger (D) of New York, would require all firms that sell more than 100,000 vehicles a year in the United States to meet a domestic-content requirement determined by dividing total sales by 10,000, up to a limit of 90 percent US content. Honda, for instance, which sold 370,705 cars in America last year, would have to make 37 percent of its products in the US under the bill. The requirement would be phased in by 1986.

These limits are significantly less stringent than those Mr. Ottinger originally called for. When first introduced, the bill would have required all automobile firms selling more than 500,000 units in the United States to meet the 90 percent requirement by 1985.

The changes ''really haven't softened the bill. They've made it more viable, '' says Gene Casraiss, a legislative aide for the UAW.

Volkswagen, if its Pennsylvania assembly plant were churning out Rabbits at full capacity, would already meet the new requirements. Honda, on the verge of opening a plant in Ohio, would find its domestic content goal within easy grasp, according to an Ottinger aide.

''This makes the bill more attractive to Honda and VW. They're doing what we're trying to force others to do - build plants in the US,'' said the Ottinger aide.

For ''others,'' read Toyota and Datsun. Datsun is scheduled to open a light-truck assembly plant in Tennessee, but on Sept. 9 announced it might halt its plans if the domestic content bill becomes law. Toyota has held talks with several domestic firms about a joint venture to produce cars in the US, but - proving a coy suitor - has yet to commit itself.

However, General Motors and Toyota have decided that when an agreement is reached on joint production of a car, it will take place at a closed GM plant in Fremont, Calif. Roger B. Smith, GM president, said Tuesday the highly automated operation would cost ''billions and billions of dollars.''

A Washington lobbyist who represents Toyota says the bill ''still represents a very big hardship for our client.''

Debate about the bill centers on two factors: the number of jobs it might create and the its effect on auto prices.

The UAW estimated that the bill, as originally constituted, would have created 868,000 jobs - 263,000 positions at auto manufacturers and 605,000 at steel, glass, tire, and parts firms. While the union has no estimate of how many jobs the scaled-back legislation would create, a UAW official says the number would ''come down somewhat,'' though not ''substantially.''

Critics greeted the UAW's figures with hoots of disbelief. And the relatively neutral Congressional Research Service says the UAW estimates ''appear to be quite high.'' A CRS report estimates the original bill would have created a total of 275,000 new jobs.

Those who oppose the legislation also claim it would give new meaning to the phrase ''sticker shock,'' by sending auto prices even higher. Mr. Brock, appearing last Sunday on ''Meet The Press,'' said the bill would tack $1,000 on the price of every car sold in America.

The legislation will be considered by a House committee this week. Congressional sources say House Speaker Thomas P. (Tip) O'Neill Jr. (D) of Massachusetts is pushing for a floor vote this session. With over 200 cosponsors , the bill would likely pass the House. The Senate would be more difficult, and President Reagan would surely veto the bill.

Though it is unlikely to become law, domestic content is being promoted as a bargaining chip that could make Japan more amenable to extension of auto export quotas. Japan's self-imposed limit on auto shipments to the US comes up for review next March, and mutterings from Tokyo indicate the limits might not be extended for another year.

Yutaka Katayama, past president of Nissan Motor, told the Detroit Free Press this week that ''there is increasing opposition to (the restraints), and it is questionable whether they will be around again next spring.''

By threatening Japan with strict content laws, say proponents of the legislation, the US might avoid a new tidal wave of Japanese imports.

''This could be used to extract concessions,'' said an aide to Representative Ottinger.

But the threat might rile the Japanese into retaliation against US exports to Japan, say critics of domestic content.

''This just feeds the whole protectionist drive in Congress,'' grumbles information compiler David Secrest.

of stories this month > Get unlimited stories
You've read  of  free articles. Subscribe to continue.

Unlimited digital access $11/month.

Get unlimited Monitor journalism.