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U.S. Car Makers Miss Boat on Yen, Nissan U.S.A. Officer Says

January 12, 1988|Associated Press

TOKYO — U.S. auto makers have not taken advantage of the high Japanese yen, instead raising their prices along with those of imported Japanese cars, the outgoing president of Nissan Motor Manufacturing Corp. U.S.A. said Monday.

Marvin Runyon said U.S. car companies could have increased their sales "tremendously" by holding prices steady while Japanese companies were forced to raise prices as the yen doubled in value against the dollar since 1985.

"But it didn't happen. They raised their prices an awfully lot," he told reporters at the Foreign Correspondents Club of Japan.

The higher yen makes Japanese products more expensive overseas and therefore potentially less competitive.

Runyon, who retired from Nissan at the end of December to become chairman of the Tennessee Valley Authority, said U.S. auto makers also boosted truck prices by about $900 less than a month after tariffs on imported trucks were increased by $900 in 1980 in efforts to make the U.S. industry more competitive.

As a result, "the consumers paid more for their trucks," he said.

Runyon said the higher yen, and improved U.S. car quality resulting from Japanese competition, now give U.S. makers a chance to enter the Japanese market.

"I've heard Americans on the one hand demand that Japan open its markets to U.S. goods and on the other hand make little or no effort to make their products competitive in this country," he said.

"There's been a market here all the time. But they couldn't come into the market because their quality wouldn't let them."

A few hours later in Detroit, Owen Bieber, president of the United Auto Workers union, called on Japan to slash the number of cars it exports to the United States by a quarter--from 2.3 million a year to 1.7 million.

Bieber said such a cut was needed because of the increase in cars being built in the United States by Japanese companies.

"We cannot tolerate the same level of direct Japanese imports . . . in a shrinking auto market," he said, referring to the decrease in total passenger vehicles sold in the United States from 16 million in 1986 to 14.9 million in 1987.

But Runyon said the increased manufacturing capacity, such as Nissan's factory in Smyrna, Tenn., will lead to beneficial competition.

"Without excess capacity you're not going to have competition," Runyon said. "That's what competition is all about."

Runyon, who described management techniques at the Smyrna plant as a blend of U.S. and Japanese methods, called on U.S. car companies to follow Japan's example in increasing worker training, allowing employees to do a variety of jobs, involving them more in management decisions and treating them more humanely.

"The same principles were standard practice at American automobile companies," he said. "Then something changed. Management began to treat employees like machines instead of people, and the result has been a loss of the competitive edge that characterized our nation's productive abilities after World War II."

Runyon warned that protectionist trade barriers often result in protected industries that become unable to compete.

If companies in both the United States and Japan devote themselves to quality, then "every cry of protectionism that echoes across the Pacific will be matched by a louder shout of pride," he said.

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