U.S.-JAPAN TRADE SHOWDOWN : Dealers Say Tariffs Will Hurt U.S.

U.S.-based Japanese luxury auto importers, in a meeting Tuesday that coincided with the announcement of stiff federal import tariffs, said they plan to take this message to the car-buying public: Sanctions will hurt Americans, not the Japanese.

“The direct impact will be on the businessmen who have invested their life savings in our luxury car dealerships,” said Yale Gieszl, executive vice president of Toyota Motor Sales U.S.A. in Torrance. “They and their employees will be hurt, [but] it will have no impact on the government of Japan, and while Toyota will feel some pain, we are a very large company” that can handle the impact.

All five of Toyota’s Lexus models are on what Richard Recchia, executive vice president of Cypress-based Mitsubishi Motor Sales of America, called the government’s “hit list.” American Honda in Torrance; Carson-based Nissan U.S.A., and Mazda in Irvine also have cars on the list.

If sanctions are imposed and make the Japanese luxury cars prohibitively expensive, U.S. auto makers are likely to raise prices on their own luxury cars, the importers argued.

“The biggest losers will be U.S. consumers, who will lose free choice,” said George McCabe, senior vice president, Mazda Motor Co. of America. “And ultimately, the American people will hold Clinton and his Administration responsible for this disaster.”

Despite the rhetoric, the five companies’ top U.S. executives seemed curiously devoid of emotion as they talked about the Clinton Administration’s just-unveiled proposal, which would virtually wipe out Japanese luxury car sales in this country with a 100% import duty on 13 popular models.

That detachment was partly explained by Thomas Elliott, American Honda’s executive vice president, who said that during lunch the five men compared notes and decided that they don’t believe the 100% tariff suggested Tuesday morning by U.S. Trade Delegate Mickey Kantor will ever be imposed.

“There may be something [punitive] done, but it won’t be as bad as proposed today,” said Robert Thomas, president and chief executive of Nissan U.S.A.

The executives talked during a panel on the future of car importers arranged months ago by Automotive News, the industry trade journal.

The companies will mount a massive campaign to persuade people that the importers make up a legitimate and vital part of the U.S. economy--that they are transplants, not foreigners, Gieszl said.

They plan to focus on an economic study being compiled by their trade group that shows that the nine Asian car importers in California--all headquartered within 30 miles of Downtown Los Angeles--together employ 14,000 people in the state.

Their combined California payroll is at least $870 million, said Morrie Markowitz, spokesman for the Assn. of Import Automobile Manufacturers, “and they purchased $2.8 billion worth of goods and services from other California companies during 1994.” The companies’ 900 California dealerships, he said, employ another 59,000.

Although the car company executives weren’t convinced Tuesday that the trade sanctions would be imposed, the trade group is “taking it very seriously,” said Markowitz.

“We think the Big Three [U.S. auto makers] have sold this administration a bill of goods,” he said. “This is not an effort to open the Japanese market, but an effort to close the U.S. market.”

Skepticism aside, the proposed sanctions are not being dismissed out of hand, the executives said.

“This is pretty much an all-consuming issue in the day-to-day business” at Honda, Elliott said in an interview. “Our dealers are calling all day long, we have our employees to talk to” and a public relations campaign to mount in a bid to persuade people that sanctions against Japanese-owned importers are not in their own best interests.

The proposed sanctions “will have a disastrous impact in California,” said Markowitz of the importers’ Virginia-based lobbying organization. Foreign-owned car makers, especially the Japanese importers, “are the car industry in California, and the politicians seem to be sacrificing us to benefit the people in Michigan,” he said.