Happy days for Detroit just around the bend?
Detroit — Is 1983 the ''year back'' for the long-suffering US auto industry?
To hear David Healy, automobile analyst with Drexel Burnham Lambert Inc., explain it, happy days for Motor City are just around the bend.
But if management consultant James E. Harbour is on target, that bend in the road is nowhere in sight.
Mr. Healy, for example, sees a profitable domestic auto industry in 1983 - with General Motors alone making up to $4 billion, Ford driving off with $1 billion, Chrysler earning up to $500 million (assuming there is no strike which was undecided at this writing), and even American Motors seeing black ink for a change.
For 1984, Healy puts total US car and truck sales at 15.6 million, including imports, up from 13.3 million in '83.
Mr. Harbour, however, sees the industry as so far behind the Japanese in productivity that only a miracle can save it.
If the Chrysler workers reject the one-year labor contract negotiated between the United Automobile Workers (UAW) and Chrysler Corporation, the impact on Chrysler, now making headway in its climb out of the pits, could be devastating.
Some observers say the US auto industry needs up to five years of breathing room to catch up with the Japanese in manufacturing efficiency and range of products. To provide that space, the UAW has been propelling a domestic-content bill through Congress which would require that the value of most cars sold in the US contain at least 90 percent North American parts and labor.
While the bill is not expected to pass in its present form, nonetheless some kind of protective legislation is seen as almost certain in the short-term run.
To encourage more sales this fall, prices on the '83-model cars have either been cut from '82, remain steady, or increase marginally, depending on the industry's need to make a specific car model competitive.
General Motors, for example, has held the line or cut the price of some of its slow-selling cars as the 1983-model year begins. The average GM price increase is 1.9 percent, nonetheless.
The consumer is warned to take a hard look at the equipment on a car. Carmakers are making some ''standard'' equipment on the '82-model cars ''optional'' for '83, thus giving less car at the same or lower price than the ' 82s.
''General Motors,'' says Arvid Jouppi, a Detroit-based stock-market analyst, ''is going for volume. That's to the good, and I think it will work.''
At the same time, the industry, riding out a four-year slump, is scheduled to build only 460,000 cars this month, up a paltry 1.9 percent from the same weak month a year ago.
The University of Michigan remains very bullish on 1983, predicting the domestic automobile industry will be selling at an annual rate of more than 8.5 million vehicles by the end of this year. By the end of 1983, only 15 months from now, the school expects new-car sales to be humming along at an annual rate of well over 11 million.
Goldman Sachs Research is far less sanguine.
''Our analysis indicates that basic demand will improve,'' the company says, ''but the improvement is likely to be relatively modest in absolute terms.''
Chase Econometrics predicts ''a moderate recovery for 1983. Without this recovery, local-content requirements will almost certainly be imposed.''
According to Chase, ''The prescription for a return to good health falls into two types of action: (1) Rebuild the industry with the products, pricing, and resources to be competitive; and (2) shield the domestic industry with some form of protectionism.''Who is right? Take your pick.Auto company executives exude chronic optimism as a matter of course, sometimes to the point of appearing out of touch. During the height of the devastating Arab oil embargo in 1973-74, one Ford Motor Company field executive asserted repeatedly that there was almost nothing wrong with the economy that a few more months wouldn't repair. A turnaround was imminent, he insisted, even as the gas pumps ran dry.
Today US auto executives seem far more realistic overall.
James McDonald, president of General Motors, told attendants at the seventh annual Automotive News Congress here last month: ''I like to beat competitors.'' Almost in the same breath, however, he admitted that GM needs the Japanese.
''In a temporary basis we're looking to get competitive automobiles wherever we can get them,'' he said.
''Like anyone else in the auto industry, I want to do it here. But to run a business properly you've got to be competitive.''
Thus GM has a financial stake in two Japanese auto manufacturers, Isuzu and Suzuki, and now is hammering out a deal with Toyota to reportedly build the Tercel in a GM plant on the West Coast. This way GM will have the small cars it needs in time for them to do some good in the marketplace.
While the United Automobile Workers sharply opposes any GM link with the Japanese car companies, Douglas A. Fraser, who retires next May as president of the UAW, says:
''There is much we can learn from the Japanese, and maybe from the Germans as well.''
Meanwhile, the US automobile industry has programmed up to $70 billion for new products between 1980 and '84, according to Mr. McDonald.
Basic to the success of the new cars is quality.
''The principal demand is for quality,'' he says. Yet achieving the goal is hard. In August, for example, GM acknowledged that an estimated 100,000 hot-selling Chevrolet Camaros and Pontiac Firebirds had glass rear hatches that could shatter when shut firmly or slammed. Also, 26,000 Camaro Z-28s and Fire bird Trans-Ams were recalled to repair faulty fuel-system valves.
Even so, the quality of US-built cars has improved significantly, as the importers themselves will admit.
''The Japanese industry is not super,'' Mr. Harbour says. Instead of being innovators, the Japanese are superb executors, the management consultant adds.
Because of this and other considerations, the Japanese productivity advantage over the domestic car manufacturers is often figured at $1,500 a vehicle.
Indeed, domestic-car sales have been at depression-level rates for the last three years. In response, carmakers have been forced to phase out numerous component and assembly plants; thrust hundreds of thousands of workers, both blue- and white-collar, into indefinite layoff; and at the same time come up with new cars they hope they can sell.
To help the US industry along, a new spirit of cooperation is developing, not only between the industry and the regulators (meaning the federal government), but between management and labor as well.
While wide-ranging labor pacts with the UAW were signed early this year by both GM and Ford, with the aim of meeting the intense realities of the marketplace, the possibility of a strike by Chrysler workers still hangs over the industry.
There is much more to be done before the US industry is fully competitive, Harbour maintains:
''The US auto industry has to streamline organization, install defect prevention, install new technology, reduce work in process, improve facility utilization, eliminate redundant work rules, and reduce suppliers.''