Employment in the U.S. steel industry fell in July to its lowest level since the Depression and steel shipments are at their lowest in 20 years, but the Reagan administration's top trade official warned yesterday that bills in Congress aimed at bolstering the auto and steel industries by requiring foreign cars to be built here would cost more jobs than they would save.
Special Trade Representative William E. Brock said the proposed legislation, which has strong support in the House, is "very dangerous" and "must not pass."
The bills, requiring foreign car makers to use as much as 90 percent U.S.-made components in cars they sell here, would effectively oblige Toyota and Datsun to build many of their cars in U.S. plants, using American steel. The United Auto Workers union has estimated that the legislation would preserve or create 250,000 jobs in auto plants and another 600,000 in steel, glass and tire factories.
The UAW, stepping up the election-season pressure on vote-conscious legislators, took out full-page advertisments in major newspapers last week to ask, "why not a Datsun made in Detroit or a Toyota from Texas?"
"We're already building Volkswagens in Pennsylvania and Renaults in Wisconsin," the UAW said. "We can build Datsuns in Detroit and Toyotas in Texas, too. That means jobs."
But Brock, appearing on "Meet The Press" (NBC-WRC), said the administration is "actively opposed" to the local-content legislation. He said it would "raise the price of every car sold in the United States by at least $1,000" and would "cost a lot of workers their jobs" because foreign countries would retaliate against the United States with their own protectionist measures.
Brock declined to predict a veto by President Reagan. He said he was "always reluctant to predict a veto" without seeing approved legislation in its final form, and he said he did not expect the auto bill to reach that point.
House members are under "campaign pressure" to do something to aid their unemployed constituents, but the Senate, where two-thirds of the members are not facing election contests in November, is unlikely to approve it, he said.
Brock insisted that the problems besetting the steel and auto industries are attributable not to imports but to the weakness of the domestic economy and the prolonged bout of high interest rates.
The latest gloomy figures from both the auto and steel industries, however, are likely to reinforce pleas from both for protection against imports from Europe and Japan.
Domestic auto production in the last 10 days of August was 32.9 percent below the same period last year, while foreign manufacturers increased their share of the market to a record 32.7 percent of sales.
The American Iron and Steel Institute reported at the end of last week that steel shipments in July totaled 4.5 million tons, the lowest since July 1962. In the same month a year ago, steel output was 7.1 million tons. For the first seven months of this year, the institute reported, steel shipments were 37.7 million tons, down 31.1 percent from a year ago.
At the same time, overall steel industry employment, once a mainstay of the economy, declined to its lowest level since the institute began keeping records in June, 1933, in the depths of the Depression.
The total number of salaried and hourly workers in the industry in July was 283,000. In the same month of 1981, it was 402,000, the institute reported.