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BIG THREE AUTOMAKERS CALL FOR INDUSTRY-GOVERNMENT COOPERATION

 WASHINGTON, March 10 /PRNewswire/ -- Spokesmen for the Big Three automakers, citing the significance of the domestic auto industry on the nation's economy, today called for industry-government cooperation in developing national policies on public issues to enhance the American industry's global competitiveness.
 Robert A. Lutz, president and chief operating officer of Chrysler Corporation; William E. Hoglund, executive vice president of General Motors Corporation; and Peter Pestillo, executive vice president of corporate relations of Ford Motor Company, testified before the U.S. Senate Committee on Commerce, Science and Transportation on the state of the American auto industry.
 All three executives cited the significant progress among domestic auto makers in the areas of product quality, productivity, and environmental and safety improvements. "The Big Three have taken on the foreign companies in this market -- frankly, sometimes against some very tall odds -- and we're beginning to win again," said Lutz.
 "It is now time to forge new cooperative relationship with government to address a host of critical policy issues as diverse as health care, energy conservation, technological leadership and economic growth," Hoglund said.
 "We're confident of our ability to compete against anybody in the United States or anywhere in the world, provided we get a fair shake," Pestillo said. "But not all of our competitors are playing by the same trade rules -- which has a major impact on our overall competitiveness."
 Lutz noted that in today's global economy, competitiveness involves more than one company or one industry turning out better products. "It's not just companies that compete, but countries," he said. "The policies that a country creates are as important to the overall competitiveness of its economy as all the innovativeness and hard work of its citizens." Lutz said domestic automakers have been rebuilding their companies "at the same time we've also been competing with foreign companies whose governments' policies have given them big advantages over us."
 He cited U.S. policies on health care costs as an example. "As a nation, we pay substantially more than other major countries for our health care. And that will always put our auto industry at a big disadvantage," he said.
 Lutz said a University of Michigan study shows the U.S. health care cost disadvantage was over $500 per car vs. the Japanese and over $600 per car vs. foreign-based transplant auto makers in the United States.
 "If you are a mature industry like we are," Lutz said, "providing jobs and paying taxes for three generations or more, and paying for health benefits for hundreds of thousands of workers and retirees, you are at a big competitive disadvantage."
 Lutz said that "where our competitiveness depends on our own actions, we're getting the job done. Where it depends on public policies, government has a major role to play."
 GM's Hoglund, stressing the importance of the domestic auto industry to the nation's economy, said the Big Three supports 1.4 million U.S. jobs and creates 15,000 jobs for every 100,000 domestic vehicles produced.
 "General Motors, Ford and Chrysler together assemble in the U.S. and Canada 96 percent of the vehicles they sell in this country compared with around 46 percent for all Japanese manufacturers," he said.
 Hoglund said the average U.S.-Canadian content for Big Three vehicles in the U.S. is over 92 percent -- almost double the North American content of the average Japanese vehicle sold in the United States.
 "This high North American content of the Big Three translates directly in to more high-paying U.S. automotive jobs -- especially the high value-added engineering jobs the transplants and imports leave behind in Japan," Hoglund said.
 Hoglund noted that the auto industry was one of the most highly regulated, non-utility industries in America, yet the U.S. market is wide open to foreign competition. "Clearly, regulation, and how it is implemented, is one of the decisive factors in our future," he said.
 Hoglund called for reforms in the U.S. regulation process and suggested the need for both government and industry to develop meaningful criteria to govern regulatory programs. "The traditional adversarial approach to regulation too often diminishes the flexibility needed to compete effectively, without providing adequate compensating benefits," he said.
 He noted the "critical role" that domestic automakers are playing in cleaning the air by reducing exhaust emissions and developing alternative fuel technologies.
 Hoglund said while domestic automakers intend to build on this progress, they face serious challenges. "At the Environmental Protection Agency alone, over 100 new rules affecting motor vehicles and our manufacturing facilities are now being developed." He said EPA rules already require significant resources and additional regulation will increase the risks to automakers.
 Ford's Pestillo, who discussed U.S. trade issues, noted that despite promises of the Japanese to reduce the chronic trade imbalance, the total U.S.-Japan trade deficit has increased the last two years, and the automotive portion has remained constant at about $32 billion a year since 1986.
 "Japanese manufacturers control nearly a third of the U.S. car market and about 11 percent of the market in Europe -- while, at the same time, the combined total of all vehicle imports into Japan, all the cars from everywhere else in the world, amount to less than 3 percent of that market," he said.
 "We believe that both business and government have roles to play in correcting the trade imbalance," he said. He pointed to the fact that the Big Three had recently lowered the price of selected models, strengthened distribution networks, increased advertising expenditures and visibility and developed more right-hand-drive products for sale in Japan.
 Pestillo said the U.S. should insist that the Japanese achieve relative trade balance on a specific schedule. "We've suggested a five-year time frame with regular monitoring."
 He called upon the U.S. to make trade policy a central part of a national competitiveness strategy and correct certain policies that operate to the advantage of foreign manufacturers such as multipurpose vehicle tariff rules that allow importers to dodge between $200-$300 million a year in duties.
 -0- 3/10/93
 /CONTACT: Gene McKinney or Ed Lewis of the American Automobile Manufacturers Association, 202-775-2716/


CO: American Automobile Manufacturers Association; Chrysler
 Corporation; General Motors Corporation; Ford Motor Company ST: District of Columbia IN: AUT SU: LEG


IH -- DC018 -- 4676 03/10/93 12:01 EST
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Date:Mar 10, 1993
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