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U.S. Automokers Need Compromise

Click to see original imageTwo news developments focus on the American auto industry dilemna. further underscoring the problem and offering steps for remedy. A Wall Street Journal dispatch from Detroit says General Motors Corp. and Ford Motor Co. are expected to ask their employees for hundreds of millions of dollars in wage and benefit cuts. And in Congress. Rep. Ronald M. Mottl. D-Ohio has reintroduced legislation to limit import of cars. trucks and engines to 10 percent of the U.S. domestic market for three years while the industry makes the transition to smaller. fuel-efficient cars that todays circumstances demand. Mottl said the big three domestic automakers suffered losses totaling an estimated $4 billion last year. while imported cars increased their American market share to 25 percent “By failing to limit auto imports. we are helping to bleed to death one of our most vital industries employing millions of workers.” Mottl said. “Time is running out. With these staggering losses. our automakers already are having trouble finding capital to develop. build. and market the smaller GETS Discussing the industry plan to ask for labor wagebenefit cuts. The Journal said that to produce the fuel-saving cars and continue competing with aggressive foreign automakers. the U.S. companies believe they must cut labor costs. which run into tens of billions of dollars a year – and that they need the savings so urgently that the current labor contracts should be revised long before they expire. The proposal is likely to cause great ripples inthe collective bargaining pattern. Auto workers usually have set the standard for much of organized labor. Already they have been hard hit. with more than 200.000 laid off much of the past year in the big three alone. Union membership has fallen Z0 percent. And recognizing Chrysler Corpfs adversity. the United Auto Workers Union already has agreed to $1.07 billion in wage and benefit cuts to keep the company afloat. While Chrysler thus benefits. Ford and GM complain that the concessions to one company puts the others to a competitive disadvantage There are no easy solutions in the over-all dilemna. As for imports. the U.S. is a staunch proponent of free trade. Yet. as it has been pointed out in Congress. the system breaks down among trade partners when the rules aren’t evenly applied e when one partner gets free access to the other’s market but doesn’t reciprocate to the same degree. The U.S. stands virtually alone among the world’s major auto-producing countries in the ease of access it allows imports. l’nder this arrangement. auto imports to this country have increased from 15.1 percent of the market in 1970-76 to about 25 percent last year A strong domestic auto industry is vital to the national interest. To solve current problems may require considerable give and take – not only by management and labor. but by Congress in adopting temporary import quotas such as the Ohio lawmaker has proposed. 1