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Iacocca Doubts Japan Will Boost Car Exports

January 04, 1986|DONALD WOUTAT | Times Staff Writer

Chrysler Chairman Lee A. Iacocca, showing off his company's new Italian sports car in Los Angeles, said Friday that he doesn't believe the Japanese will dare to boost auto exports to the United States any further.

Sounding uncharacteristically sanguine about the Japanese threat because of the strengthened yen against the dollar and tough protectionist talk in Washington, Iacocca predicted that Japan's auto makers won't increase exports above the 2.3 million cars that they plan to ship this fiscal year.

The Japanese have sent mixed signals in recent months about their plans after March 30, when that nation's "voluntary" restraints on car exports to this country end. Already, it has increased shipments above earlier levels but still retains a ceiling on how many cars it allows to be sent here.

"I don't think with our newly announced trade deficit . . . that they would dare to move," the outspoken Chrysler chairman said. "Politically, I don't think they're that foolish. I don't think even our government would tolerate that."

Iacocca, a longtime critic of the U.S. government's trade and monetary policies, sounded almost happy with the Reagan Administration's jawboning on currency exchange, which has caused the dollar to plummet by about 20% against the Japanese yen since September. Auto makers and other industries have blamed the strong dollar for part of the trade imbalance, and Iacocca said the recent swing has made the U.S. auto industry more competitive.

From 250 yen to the dollar, the exchange rate has fallen to the 200-yen range. That makes Japanese imports more expensive to buy, and Japan's auto makers have been raising U.S. prices. Iacocca said he expects one more price hike, bringing the total increase to $800 or $1,000 on a "run-of-the mill Toyota."

"Give me a 180-yen dollar and I'll show you how to make cars competitively in this country," he declared.

Asked whether Chrysler's new $1-billion labor agreement with the United Auto Workers doesn't cut into those gains, Iacocca said: "The labor problem pales into insignificance compared to a swing in the yen from 250 to 180." He said the pact might cost Chrysler an extra $300 a car over three years, "and we can swallow that."

That is a different tune from the one Iacocca sang during labor negotiations last fall, when a UAW strike against Chrysler led to what was considered a rich contract. He warned then that higher labor costs threaten the domestic auto industry and will send thousands more jobs offshore.

On Friday, however, Iacocca was more interested in talking about Italian cars. In conjunction with the Los Angeles Auto Show, he was unveiling a prototype of a pricey sports car that Chrysler has developed with Maserati, the Italian auto maker, to go on sale here in early 1987.

With Iacocca was Alejandro DeTomaso, the 57-year-old, cigar-chomping Maserati chairman, an old Iacocca chum, who was hobbling on crutches as a result of injuries he suffered recently when he crashed his motorcycle.

The two-seater convertible, as yet unnamed, has touches reminiscent of some Mercedes-Benz models and the original 1955 Ford Thunderbird. To be assembled by Maserati in Milan, it will cost $25,000 to $30,000 and is intended to compete against the Mercedes-Benz and a Cadillac import from Italy, due here about the same time.

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