Acting U.S. Trade Representative Robert D. Hormats yesterday warned that Japanese automakers feel they are off the hook because U.S. government officials have failed to limit sales of Japanese vehicles here and that they plan to increase car sales here dramatically in the next two years.
Hormats, slated to become assistant secretary of State for economic and business affairs in the Reagan administration, told members of the Senate Finance trade subcommittee that he isn't very optimistic the Japanese will restrain sales of their vehicles here.
But Hormats declined to say whether he favored or opposed negotiations between the United States and the Japanese to limit imports, as Ford Motor Co. and the United Auto Workers union have urged.
The Transportation Department estimates the Japanese will increase their production capacity by about 20 percent by 1983, increasing the number of new cars they can build annually fromthe current 9.4 million units to 12 million units, about 1 million more than the U.S. industry is expected to produce by that time. Apparently, America is the target of Japan's auto-production increase, Hormats said.
"One might legitimately ask where these cars will go," Hormats said. Europe is unlikely to take greater numbers of Japanese cars and in fact may cut back. Many of the developing country auto markets are supplied from assembly plants in those countries. And the Japanese market is not growing vigorously."
Hormats' testimony came during the first of two days of hearings, the latest attempt to find ways to help the U.S. auto industry solve its financial and unemployment problems. Last November the International Trade Commission ruled that imports weren't the major cause of Detroit's problems, and so import restrictions weren't necessary. Ford and the UAW had requested quotas on the numbers of Japanese cars and light trucks sold here, and the UAW also requested that a protective tariff be added.
Following the ITC decision, Ford and the UAW sought legislation giving the president authority to negotiate import restrictions with the Japanese, but those efforts failed in the Senate last month in the waning hours of the congressional session. Ford and the UAW are renewing their requests this week.
After the ITC, Congress and the president failed to restrict imports, the Japanese said they were planning to reduce their exports here, anyway. But Hormats said yesterday that if they've done so, "it's very hard to see."
Hormats also said the Japanese are concerned with seeing how little they can do to relieve pressure from the United States and they don't realize how important they are in the world economy.
Hormats added that Toyota recently said "it remains interested in establishing an economically viable automanufacturing capability in the United States if this can be accomplished." Toyota was scheduled to complete several weeks ago a study on the feasibility of building an auto plant in the United States, but now the company says the report will be finished next month, Hormats said.