U.S. drive to sell autos in Japan stalls Deal was hallmark of Bush's visit

October 08, 1992|By John E. Woodruff | John E. Woodruff,Tokyo Bureau

TOKYO -- The most touted accomplishment of President Bush's troubled January trip here to push "jobs, jobs, jobs" for American workers is bogged down and touching off new sparks of controversy in auto trade between Japan and the United States.

Nine months after the president's visit yielded an offer by Japan's BigFive automakers to import and distribute 19,000 vehicles from America's Big Three by 1994, only Honda Motors Inc. has turned the offer into increased sales for an American counterpart, Chrysler Corp.

A Honda spokesman said yesterday that his company would easily meet the agreed-upon goal of tripling the 1,200 vehicles a year -- mostly Cherokees and Jeep Wranglers -- that Honda brought in last year.

Spokesmen for the four other automakers said yesterday that they have not reached agreement with their American counterparts on how to implement the targets, which were intended to add to the 35,000 Big Three cars already imported here each year.

Nissan Motors, whose president expressed distaste for the entire process in the months after the visit, said it has had no meetings with its suggested counterpart, Ford Motor Co.

"Ford never came forward with a proposal" on Nissan's offer to handle an estimated 3,000 vehicles, mainly minivans and Taurus sedans, a Nissan spokesman said yesterday.

Nissan hedged its offer, however, with a requirement that the vehicles have steering wheels on the right side, as is standard in Japan. Big Three makers have long insisted that that would require retooling that was far too expensive for small-lot sales.

A Ford spokesman in Washington said that Nissan made the original proposal before consulting with Ford and that the proposal was never viable.

Mitsubishi Motors also expects to put off its imports under the plan until 1995 or beyond, a company spokesman said yesterday. The company is still negotiating with Chrysler -- with which it has a long-standing relationship -- for models the American automaker is still developing.

With palpable reluctance in most cases, Japan's biggest automakers announced the 19,000-vehicle target under the combined pressure of Japan's government and Mr. Bush's high-profile trade mission, on which he brought along the heads of all three top American auto companies.

The offer was "pieced together in a hurry because everyone felt a need for something to show under the combined political pressure of a recession-year election in the States and then-newly installed Prime Minister Kiichi Miyazawa here, who badly needed his first visit from Mr. Bush to succeed," said a source who tracks the auto trade.

"There were no details at the time, and it's not surprising that now it's hard to make it actually work on both sides."

Toyota's dim hopes for talks

This week, Tatsuro Toyoda, the new president of Toyota Motor Car Co., touched off a new controversy by saying his company sees little hope for the slow-paced talks with General Motors Corp. on its 5,000-car target.

"There is no negotiation about sales at all and no future prospect," Mr. Toyoda told the Asahi newspaper Monday. Instead, he said, Toyota "has begun importing Toyota cars manufactured in the United States."

"Even if Toyota cannot sell GM cars in Japan, we can achieve the goal of contributing to the American auto industry by importing American-made cars" from Toyota's U.S. factories, Toyota's new president said. Toyota began last month to import station wagons from its plant in Kentucky, increasing the plant's exports to Japan to 468 from 16 during the previous September.

But at a news conference here after Mr. Bush's visit, American Big Three executives vehemently opposed any suggestion that cars from Japan's U.S. factories would be an acceptable solution to the intense friction in the auto trade.

"What the Japanese make in their plants, here or in the U.S., doesn't count," Harold L. "Red" Poling, president of Ford, said at the time.

Two of the Japanese makers, Mitsubishi and Mazda, have restructured relations with American companies since January. Indeed, for those two automakers and their counterparts Ford and Chrysler, announcements made during the Bush "jobs, jobs, jobs" mission could become irrelevant before they can be executed.

"Ford has increased its ownership stake in Mazda and seems to be making all the moves to take command of its own import future in Japan," said the source, who spoke only on the condition of anonymity. "Mitsubishi bought out Chrysler's share of their Diamond Star joint venture in the States to give Chrysler a capital infusion."

Ford has set up its own Japanese import operation since January, and a Mazda spokesman said yesterday that his company sold 1,300 Ford cars from April through September, a 26 percent increase over the same period last year. Those cars were not included in the January offer, and no agreement specifically aimed at executing that offer was in sight, he said.

GM-Toyota talks

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