U.S., Japanese Auto Leaders Meeting Again : Cars: The Chicago gathering, a follow-up to the tense summit in Tokyo, will feature top executives of eight companies.
Amid some puzzlement over what they expect to accomplish, the top U.S. and Japanese auto executives will convene at a hotel today for their second meeting in five months to tackle differences over trade.
Both sides declare vaguely that they hope to continue the dialogue begun at their controversial White House-sponsored meeting in Tokyo in January aimed at reducing the $40-billion U.S. auto trade deficit with Japan.
But some doubt whether much can be accomplished. The economic climate has tilted toward Detroit since January; neither government is directly involved in the talks, and the two industries are grappling with tensions that seem inherent in their competition.
“There is fundamentally a competitive marketplace that governs the behavior of both the U.S. and Japanese auto makers. I think people in business know that politics in the end cannot solve the problems of management,” said William Ouchi, professor of management at UCLA.
Though the January meeting was widely criticized, it has produced concessions by the Japanese, notably their agreement to lower by about 600,000 cars their “voluntary” ceiling on auto exports to this country.
Several of the participants--who include the chief executives of America’s Big Three auto makers and the heads of Japan’s five major firms--have sought to play down expectations that the meeting will produce significant agreements on reducing the trade deficit with Japan.
“I would not expect any major announcements,” Ford Motor Co. Chairman Harold Poling said last week. “What we initiated at the meeting in January was the beginning of a dialogue. As long as you have a dialogue going, there’s an opportunity for improvement.”
On the agenda will be many of the topics discussed in Tokyo, including selling more U.S.-brand vehicles in Japan and increasing Japan’s purchases of auto parts from American suppliers.
But to some, any time industrial competitors convene to discuss cooperation there is an implicit danger to consumers. Already, prices of Japanese cars have jumped in recent weeks, at least partly in response to U.S. allegations of predatory pricing.
“Any time in history when the Big Three have gotten together, it’s meant bad news to consumers,” said Robert Reich, political economist at Harvard. “When the Big Three plus the major Japanese companies get together, we can expect even worse news for consumers. What can we hope for--that they’ll carve up the market?”
In the weeks following the January meeting, resentment swelled in Japan over demands that it help the struggling U.S. industry out of its largely self-inflicted misery, and a “Buy American” movement blossomed in the United States.
In the midst of the heightened tensions, the second meeting between the two auto industries--organized by their trade associations with help from the U.S. Department of Commerce and Japan’s Ministry of International Trade and Industry--was not set until a few weeks ago.
The three-day trip to Tokyo proved embarrassing for the Big Three executives, because they were forced to defend their sizable paychecks in the heat of an unflattering media spotlight while demanding trade concessions from the Japanese.
This time, the industries’ two trade groups will exercise tight control over today’s five-hour meeting in this Chicago suburb.
Poling, General Motors Corp. Chairman Robert C. Stempel and Chrysler Chairman Lee A. Iacocca--whose public comments during and after the trip to Tokyo sometimes sparked outrage among their Japanese counterparts--will not make themselves available to reporters.
Representing the Japanese will be the presidents of Nissan, Toyota Motor Corp., Mitsubishi Motors Corp., Mazda Motor Corp. and Honda Motor Co.
While the Tokyo trip may have been a public relations disaster, there are signs four months later that the political pressure and the economic agreements extracted by the U.S. visitors are paying off.
In addition to lowering its ceiling on auto exports to this country to approximately 1991’s level of 1.68 million cars--which will grow in significance as the U.S. market recovers--nearly every Japanese auto maker has raised prices on cars sold in the United States an average of 2.8%. Largely as a result, Japanese makers’ collective share of the U.S. market slipped to 24.4% through April from 25.2% in the first four months of 1991.
Not all of the headway can be attributed to political pressure. As signs of a tenuous recovery spring up throughout the U.S. auto industry, their Japanese rivals are struggling to cope with a recession in their home market and an end to their accustomed advantage in the cost of capital.
