Chrysler Corp. has sent the Reagan transition team and Congress its own prescription for curing the U.S. auto industry's ills. At an auto hearing here yesterday, Chrysler suggested a "gentlemen's agreement" with the Japanese to reduce their U.S. Car sales, tax incentives for consumers to buy American cars and a two-year moratorium on automobile regulations.
Chrysler's remedy, the National Automotive Recovery Act, should insure that the auto industry is well on its way to recovery in two years, Chrysler said. However, other auto companies have said it will take five years for Detroit to compete with fuel-efficient Japanese imports.
Sen. John C. Danforth (R-Mo.), who called the two days of auto hearings held Wednesday and yesterday, said the Senate Finance Committee trade subcommittee, which he chairs, will wait until the Reagan administration decides how it will treat the auto issue before a legislative package is proposed. But if Reagan doesn't act quickly, "we will," Danforth said.
Danforth said his subcommittee will try to devise a trade, tax and regulation-reform package for the industry "within a few weeks." He said he is leaning toward legislation allowing the president to negotiate import restrictions with the Japanese. Congress could pass legislation setting up import quotas, but Danforth said that would be "too inflexible."
Part of the Chrysler plan would be to stop for two years sales here of Japanese cars built on overtime, reducing the number of Japanese imports sold here by about 500,000 a year, Chrysler said.
"It would give the American companies the time they need to complete the converstion to their new fuel-efficient cars and trucks," said P. H. Gagnier, finance liaison executive for Chrysler. "It would not cause the layoff of a single Japanese worker, and it would not cause a trade war with Japan."
The proposal also includes a $1,500 personal investment tax credit to the purchaser of a new American-built car with the trade-in of an auto made before 1976.
However, Senate Finance Chairman Robert Dole (R-Kan.) already has said Congress probably won't pass a revenue-loser like the tax credit while it is trying to reduce the federal budget.
Chrysler also proposed freezing for two years all environmental and safety regulations to allow carmakers to concentrate on improving fuel economy, Gagnier said.
"This three-point program will help solve the auto industry's immediate problem," Gagnier continued. "It will help put 250,000 people back to work. It will cut billions out of the automotive trade deficit. It will increase government income tax revenues and Social Security payments by about $2.5 billion. It will reduce transfer payments by about $2 billion. And it will help restore the vitality of the country's biggest industry."