Honda Motor Co. Ltd. has warned that it may not build its planned $200 million automobile assembly plant in Ohio if the government imposes quotas or tariffs to keep out imported cars.
Honda's warning was made in documents filed this week with the International Trade Commission which will decide next month whether to grant the United Auto Workers' and Ford Motor Co.'s requests for relief from auto imports during the next five years.
The UAW and Ford contend imports have flooded the U.S. auto markets and caused the current financial and employment problems in the industry. The relief is necessary to give the U.s. auto industry time and money to produce its own small cars to compete with imports, they say.
Opponents of the relief measures have said import restraints would result in higher domestic and imported car prices and wouldn't necessarily make Detroit more prosperous. Ford and the UAW have argued that such relief wouldn't be necessary if the importers, particularly the Japanese, voluntarily restrained the numbers of cars they well here or build plants here that would put laid-off auto employes to work.
But Honda said such restraint may drive them away.
"These longstanding plans are now jeopardized by the sweeping import restraints that the UAW and Ford have requested for the next five years," Honda said. "The potential effect on Honda would also pertain to any other foreign producers' automobile production in the United States."
The plant, located in Marysville, Ohio, would produce 120,000 vehicles a year, a "significant portion" of Honda's U.S. sales, the company said.
Last year 353,291 Hondas were sold in the United States compared with 507,816 Toyotas and 472,252 Datsuns.
Honda said that import restraints would reduce its network of dealers around the country, which would mean that when production at the Ohio plant is started in late 1982 enough dealers won't be available to sell the cars. Honda said that its dealer network isn't fully developed yet, because the firm's vehicles only became a nationwide factor in the U.S. auto market five years ago. Honda has 760 U.S. dealers, the company said.
Plans to build cars here "depends on the preservation of its nationwide dealer network during the next several years," the company said. "A small increase in imports, projected to be approximately 6 percent annually, is therefore required to ensure the continued vitality of existing dealers and to add a few additional dealers."
The firm also said it must maintain a respectable sales volume to finance the plant. "A reduction in the number of cars imported by American Honda would seriously hamper this financing effort," the company said.
Honda's $200 million commitment for the plant is "almost twice its worldwide net income for the last fiscal year," the company added.
The briefs filed by Honda and other Japanese, European and domestic automakers were intended to respond to questions raised during the 46 hours of testimony during the hearings beginning Oct. 8. Groups opposing import relief said in their briefs that imports aren't the main cause of Detroit's problems but that a decline in demand for all cars is mainly to blame and that the shift in demand from large to small cars is another major cause. These two changes were due to the recession and high gasoline prices, the opponents said.
The UAW and Ford blamed imports for the indefinite layoffs of 217,000 autoworkers, the bankruptcy of 1,600 domestic car and truck dealers and second-quarter losses for the Big Three automakers nearing $1.5 billion.
The ITC is scheduled to decide the issue on Nov. 10 and later make its recommendations to the president, who has the final decision.