Auto and other union leaders have reacted bitterly to my column criticizing legislation to create new devices to keep foreign cars -- especially Japanese -- out of the U.S. I can't get angry, for I recognize their frustration, if not their logic.
The bills -- HR 5113 and S 2300 -- would require foreign car makers to use as much American labor and American parts as possible, up to 90 percent for the larger Japanese exporters. To get anywhere near that figure, of course, Toyota and Nissan would have to join Honda in producing cars here.
But the fact is -- and this explains why the union men are so angry -- the drive for these bills, led by the United Auto Workers, has lost momentum as their restrictive conditions have become better understood. Michael Driggs, assistant secretary of commerce directing the Reagan administration fight against the legislation, says: "The clock is running out on them."
In all probability, the UAW will have to lower its sights to a top "local" content of around 50 percent to get a bill reported out by the House Energy and Commerce Committee. Even some of those who have been trotted out by the unions as supporters of the legislation concede in private that 90 percent local content is a ridiculous proposal.
Still, Driggs says a 50 percent local content bill would "violate all the (international trade) principles" for which the Reagan administration stands. And, of course, would provide less protection than the UAW was aiming for.
The whole concept is simplistic: the upheaval in the American auto industry can be blamed on the fact that the U.S. market is open. Therefore, all one has to do to restore the industry to health is to keep Japanese cars out of the country. This notion allocates no blame for the mess to high prices, a failure to produce cars that buyers demand (management's responsibility), and low quality (a deficiency for which both labor and management share equally).
The UAW, led by its embattled president, Douglas Fraser, claims 850,000 jobs will be preserved or created if the local content bills are passed -- 250,000 in auto plants, 600,000 in steel, glass and tire factories.
This figure is pie-in-the-sky, according to the Congressional Budget Office, the Congressional Research Service, the House Ways and Means subcommittee on trade and practically everybody else who doesn't work for or isn't connected with one of the big unions.
What Fraser ignores is the certainty that if this country tells foreign producers that they must provide "local content" in the goods they sell here, those same foreign producers will retaliate in kind.
Thus, a more realistic CBO calculates that if other nations retaliated for local- content auto legislation, by 1990 there would be a gain of only 70,000 in auto employment and an actual loss of 220,000 in non-auto jobs, for a net loss of 150,000 for the American economy as a whole. Prices would be raised for domestic as well as imported cars, and the whole economy would suffer lower economic growth because of "misallocation of resources," according to the CBO.
The union defenders of the protectionist bills attempt to counter the negative effects for consumers by saying, first, that there would be no significant price increase, a suggestion that falls flat when one looks at the way prices have shot up in the past year because of the "voluntary" quotas placed on Japanese cars. Then, the unions call attention to the endorsement of the legislation by the Consumer Federation of America.
This endorsement turns out to be an interesting story in itself. The federation represents 220 constituent groups -- including the UAW and almost 30 other labor groups.
Stephen Brobeck, executive director, told me that while the federation supports the legislation "on its merits," the executive committee was motivated in no small measure by "gratitude and good will toward the UAW, for its help in lobbying on consumer legislation over the years." No other union would have even gotten a hearing on this kind of legislation from the somewhat embarrassed federation, which has a history of opposing quota regulations.
Virginia Knauer, President Reagan's adviser on consumer issues, puts the situation in proper perspective. "The way to increase (auto) employment," Knauer says, "is by offering the Americans consumer quality cars at competitive rates."
One hopes that Reagan will follow the advice he is getting within the administration to stick to principle and to veto any local-content bill that may pass, whatever the mathematical formula.