The International Trade Commission yesterday virtually killed the U.S. auto industry's chances of getting import restrictions placed on foreign cars by ruling that imported vehicles are not the main cause of Detroit's woes.
The U.S. government agency, by a 3-to-2 vote, agreed that the auto industry has big problems; more than 200,000 auto workers were permanently laid off this year and several companies reported record losses. But the commission majority found that the main causes were not foreign competition, but rather the U.S. recession, which reduced consumer income; high interest rates, which made new cars unaffordable, and the fact that Detroit was still trying to sell gas-guzzlers that Americans no longer wanted to buy.
The two Democratic commissioners and one independent voted against the U.s. industry and the two Republicans voted in favor of it. All of the commissioners voted against import relief for the light truck industry.
Ford Motor Co. and the United Auto Workers union had asked the ITC to find that imports were the substantial cause of their recent difficulties. Such a finding would have made them eligible for import quotas, increased tariffs on foreign cars or an orderly marketing agreement between Japan and the United States limiting imports for a maximum five-year period. They could have used that time for their unprecedented $80 billion industrywide retooling effort to produce more small cars to compete with the Japanese.
Representatives of Ford and the UAW said that they now will call on President Carter and Congress for help. The administration has maintained that import restrictions would be inflationary and violate the spirit of free trade. During the campaign, Carter said that if the ITC found the industry had been injured by imports he would act quickly.
An administration spokesman said yesterday that without the go-ahead from the ITC Carter is prohibited by law from restricting imports or negotiating any curbs with the Japanese because it could violate antitrust statutes. Sen. Donald W. Riegle Jr. (d-Mich.) introduced legislation giving Carter negotiating authority, but it is not expected to be acted upon during the lame duck session beginning tomorrow.
The American industry had requested that the Japanese voluntarily restrain exports to the United States but they have refused. After the vote yesterday a representative of Nissan, maker of Datsuns, and the Japan Automobile Manufacturers Association said the ITC's decision won't affect their marketing strategies and said they had no plans to voluntarily restrain imports unless market conditions warrant it.
In Tokyo, Japanese car manufacturers told reporters that they expected their exports to decline in the coming months as a share of the U.S. market. That prediction reflected the Japanese assumption that exports will fall naturally as the American manufacturers enter the market with smaller and more fuel-efficient cars.
Nissan and Toyota Motor Sales Co. executives said they would exercise prudence in export sales but made no commitments to restrain exports voluntarily.
The decision was hailed by the foreign auto-makers as a victory for the American consumer and for free trade. But it was denounced by senators from the Midwestern industrial states hurt most by the automotive slowdown as contrary to the best interests of the nation.
"We are very disappointed, in fact shocked, by the ITC's ruling," said Ford Chairman Philip Caldwell. "We urge the president and Congress to move quickly to take action in the interest of the United States." Uaw President Douglas Fraser said the ITC action could jeopardize at least another 100,000 jobs.
The commissioners had to determine whether the domestic industry was suffering, whether import sales have increased imports were the substantial cause of the injury or threat of future injury. If imports had been found the major culprit, the commission could then have voted some kind of relief.
Although the commissioners usually vote without comment, Commissioner Michael J. Calhoun criticized some foreign car-makers for exploiting Detroit's hardship. But he said that imports weren't the main problem, that the recession and consumers' shift from large to small cars were.
Commissioner Paula Stern, a Democrat, said the "decline in demand due to the general economic conditions and unprecedented shift in demand from large to small cars brought the industry to its present weakened state." She added that the auto-makers, contrary to some critics, "can't be blamed for mixed signals in the marketplace" and said that with sharply rising gasoline prices last year and a downtown in the economy, planning for future market tastes is "more like Russian roulette."
Stern added that productivity gains the industry expects in the next few years will probably result in a greater drop in jobs for auto-workers than increase in imports would.