Says Chrysler May Produce Liberty Project Car in Asia : Iacocca Talks Cars, Trade in Japan
Chrysler Chairman Lee A. Iacocca said Wednesday that the strong U.S. dollar might induce Chrysler to produce its planned Liberty car in Asia or to build “pieces” of it in Japan, South Korea and the United States.
In three public appearances here, he also urged the United States to abandon demands for access to Japan’s markets on a product-by-product basis. Instead, he said, the United States should fix declining year-by-year limits on America’s trade deficit with Japan and then let Japan manage its trade to stay within those limits by boosting imports, slashing exports or both.
Iacocca described Chrysler’s Liberty project as a program by 1989 or 1990 to reduce the cost of manufacturing an automobile by $2,000--the cost discrepancy he said American car makers suffer in competition with Japanese makers. Iacocca said Chrysler so far had figured out ways to cut $900.
“If, on top of that, I could get help from the yen-dollar exchange rate to pick up another $1,100, then I’m pretty sure I would build it (the Liberty car) in the United States,” he said.
“As a businessman, I can’t wait” for the yen to rise 20% in value--to an exchange rate of 200 yen to $1, compared to the present rate of about 250 to 1, he said.
“I would like to keep my options open,” he told a news conference at the Japan National Press Club. “We may build it in Asia someplace. We may build it in the United States--but we can’t plan on that happening. These kinds of things are beyond our control. There may be pieces of it built in Japan, there may be some pieces built in (South) Korea, and there may be some pieces built in the United States.”
Conspicuously absent from Iacocca’s remarks was any kind of appeal for Japanese action to make it easier for American cars to be sold in Japan. At the Japan National Press Club, he even admitted that “I do not think the kind of cars we build would be adaptable to Japan.”
Although Iacocca three times disavowed an ambition to run for President in 1988, the speech he delivered at an American Chamber of Commerce luncheon focused not upon the car industry but on overall U.S.-Japan relations. It drew an audience of 762 people, the largest in the chamber’s history.
“The mood of the American people is more hostile now toward the Japanese trade situation than at any time I can remember,” he said, adding that trade friction is close to “boiling over.”
The American people, he said, “see a trade relationship they perceive as being increasingly ‘one way.’ They see Japanese companies taking more and more of the American market and American jobs, and they see a Japanese market that is virtually closed to American companies.
“There’s too much frustration in America, Republican and Democrat, white collar and blue collar. . . . If reasonable solutions for the trade imbalance aren’t found, then I think you’ll see some fairly drastic solutions,” he warned, citing as possibilities an import surcharge on Japanese goods, higher tariffs and import quotas.
