President Carter promised auto industry leaders yesterday that the government will try to make more credit available to car buyers, as a first step toward aiding the industry through its worst slump in 18 years.
The administration also is sending strong "signals" to Japan that the rising level of imported Japanese cars and trucks is a matter of serious concern, said Transportation Secretary Neil E. Goldschmidt, reporting on the White House conference on the auto industry's plight.
Just how the administration will deal with the Japanese import issue wasn't disclosed yesterday. While officials said there is no change in the administration's opposition to trade retaliation against Japan, President Carter was described as "sympathetic" to the industry's complaints.
"The President is making it as clear as he can that (the signals) shouldn't be misread," said Goldschmidt. "We do expect to have a fair share" of the American market for fuel-efficient compacts and subcompacts.
The president said that Congress may be inclined to consider restraints on auto imports but added he hasn't decided to ask for congressional action on this front, according to one participant.
The meeting, involving the leaders of the domestic auto manufacturers and the United Auto Workers, ranged over issues of regulaton, trade, innovation, and the current collapse in auto sales, which saw volumes for the first 10 days of May down 42.8 percent below the level of a year ago.
"We have no easy solution," Carter told the group. "There are no magic answers." But he promised his administration would consider carefully the industry's complaints and proposals.
Goldschmidt said, following the meeting, that "it is possible with a combination of regulatory and tax policies to provide our industry with some leverage" that it now doesn't have.
Specific responses by the administration will be developed during the next six weeks, when a second "summit conference" on the auto industry is scheduled, participants said.
Thomas Murphy, chairman of General Motors Corp., called it "a very good meeting."
"It bodes well for the future," added Philip Caldwell, chairman of Ford Motor Co.
Ford has led the way in demanding a tough response to Japan, which has been rapidly expanding both its production capacity of cars and trucks and its shipments to the U.S.
In 1977, U.S. companies produced 12.7 million vehicles, compared to 8.5 million produced by Japan. This year, U.S. production may drop to 8.8 million vehicles, while Japan's could reach a new peak of 11 million, industry sources predict. Virtually all of Japan's increased production is being exported, Caldwell said to reporters.
He called for new pressure by the administration to keep a ceiling on Japanese imports now, followed later by legislation requiring that all vehicles sold in the United States by foreign-based companies contain at least 75 percent American parts.
A series of responses by the Japanese government to U.S. trade concerns is expected to be announced today, government sources said.
The actions reportedly will include elimination of tariffs on a large number of auto parts imported into Japan; the dispatch of Japanese trade delegations to the U.S. to explore possible investments in auto and auto-parts production, and steps to improve opportunities for export of U.S. vehicles to Japan.
The U.S. Customs Service may announce soon a reclassification of imported small truck cabs and chassis that will subject them to a 25 percent duty -- directly affectging one of the fastest-growing areas of Japanese vehicle exports.
Imported trucks now carry a 25 percent tariff, but importers have circumvented this by shipping truck beds separately from the cabs and chassis. For separate components, the duty has been only 4 percent.
The president has authority to reduce the 25 percent tariff to 8.5 percent, giving the administration additional leverage in seeking to curb Japanese imports, government sources said.
The most immediate result from the meeting is likely to be the effort to increase credit for car purchasers.
Although car sales specifically were excluded when the president announced the credit tightening policy March 14, banks generally have taken a hard line on auto loans since then, according to the National Association of Automobile Dealers.
The reducing credit crunch is the primary reason for the sharp drop in auto sales since mid-March and for the closing of some 300 auto dealerships nationally this year, the association says.
The adminstration is expected to ask the Federal Reserve Board to instruct member banks that car loans are indeed to be exempted from credit restrictions, officials said.
The president summed up the situation by urging the industry to think positively. he reportedly complained that widespread "poormouthing" of American automotive products was helping depress the industry. "We're going to cooperate to help build it up," he said, according to participants.
Murphy of GM took him at his word, telling reporters afterwards that American-built cars offer "outstanding values, good fuel-efficiency, good service . . . I submit you can't get a cheaper, better car," he said.