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Though Japanese cars commanded 22% of the domestic market in June, the Carter Administration continues to oppose import controls. The President's Council of Economic Advisers has calculated that limiting Japanese cars to their 1979 levels, about 17% of American sales, would add only 20,000 U.S. workers to the job force and cost consumers an extra $2 billion in higher auto prices because large American cars are generally more expensive.
General Motors, the only Big Three U.S. carmaker that has opposed import restrictions, demonstrated last week why it may be able to beat back the Japanese challenge. The company unveiled a 1984 two-seat electric commuter car that has a top speed of 50 m.p.h. and a range of 100 miles between rechargings. The firm also declared that the average mileage of its 1985-model car fleet will be 31 m.p.g., well in excess of the 27.5 m.p.g. ordered by the Government.
Ford may have another way of fighting Asian competition. The auto world last week was buzzing with rumors of a possible deal between that company and Toyota, the only major Japanese producer without any current plans to build cars or trucks in the U.S. After Ford President Donald E. Petersen met in June with Toyota officials, the Japanese press reported that a firm agreement had been reached whereby Toyota would build 20,000 cars a month in an idle Ford plant in the U.S. By week's end, though, both Ford and Toyota strongly denied any such accord.
The key development in Carter's trip to Detroit was the agreement on what Administration officials say could be the model of a national industrial policy. After years of animosity, the American auto industry and the U.S. Government now seem to realize that cooperation is in their best interests. In addition to announcing the relief measures laid out last week, the President said he would appoint a committee of Government, company and union officials to tackle the industry's long-term problems. It will probably consist of Transportation Secretary Neil Goldschmidt, Commerce Secretary Philip Klutznick, Labor Secretary Ray Marshall, the heads of the five U.S. auto companies, and U.A.W. officials. By next week each member is to prepare a list of five priorities for action. The Government will draft its own list of emergency steps. Said Goldschmidt: "There is the potential here for a relationship that would reverse a lot of years of auto-industry problems with the U.S. Government and vice versa."
Much of the credit for this remarkable turnabout belongs to Transportation Secretary Goldschmidt. Carter's first Transportation Secretary, Brock Adams, sternly ordered Detroit to "reinvent" the automobile, and last April the President publicly berated industry leaders for stubbornly refusing to make small cars. But Goldschmidt, the former mayor of Portland, Ore., took the automakers' problems seriously and helped swing Administration opinion round. Prompted by the Government's loan guarantee to Chrysler, Goldschmidt embarked on a long-term study that convinced him the Government simply must help an industry that provides one-sixth of the nation's jobs. A Goldschmidt-led task force designed the proposals that Carter made last week.