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CHRYSLER CHAIRMAN CALLS FOR OPEN MARKET IN JAPAN TO REDUCE TRADE DEFICIT WITH JAPAN

 GRAND RAPIDS, Mich., Sept. 14 /PRNewswire/ -- Chrysler Chairman Robert Eaton, in a speech at the Midwest/U.S.-Japan Conference here, said, "Washington must do more than simply muscle the yen up to deal with our trade imbalance with Japan."
 Eaton called on Washington to insist that prices actually reflect the true consequences of that strong yen. And, he said, it must be adamant that Japan's market be as open to American-made goods as the U.S. market is to Japan's goods.
 "I believe when trade deficits continue to grow year after year after year, it's because of policies. It's because leaders in both countries have not forced those policies to change," Eaton said.
 "It has to start right at the top, and I'm beginning to be optimistic that with new leadership in both Washington and Tokyo, we may finally begin to see some action."
 Autos and auto parts account for about two-thirds of America's trade deficit with Japan.
 During the past two years, the Big Three have picked up five points of market share in this market from Japanese competitors, Eaton said. The current $2,000 price gap between Japanese and domestic vehicles might look substantial, he said, but it should be larger. Japanese car prices do not reflect the actual changes in the value of one yen.
 Between 1991 and today, the yen has appreciated by 27 percent. But Japanese car prices in the U.S. have gone up only 13 percent. Between August 1992 and August 1993 alone, the yen appreciated by 22 percent. But the average car price increase for Toyota, Nissan and Honda was only 3.9 percent in those 12 months.
 "To believe that any kind of production efficiency could possibly account for this big a discrepancy is absolutely ridiculous," Eaton said. "To price at under 4 percent for a currency swing of 22 percent defies gravity."
 Eaton favors firm targets for reducing the trade deficit. "Ten to 20 percent a year reduction, starting immediately, is not unreasonable given the size of that deficit and the number of years we've lived with it."
 Eaton was working in Europe when the European Community imposed a 16 percent market share limit for Japanese cars. He noted it didn't cause a break in relations between Japan and Europe. "It just set the rules."
 "There's no question that targets or limits, strictly speaking, violate the code of free trade. They are a form of 'managed trade,' and that's a dirty word today in some circles, although in reality all trade is managed one way or another.
 "I think it's a dangerous step to take, frankly, and yet I think we should do it because the current situation is even more dangerous."
 -0- 9/14/93
 /CONTACT: Rita McKay of Chrysler, 313-252-8790/
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CO: Chrysler Corporation ST: Michigan IN: AUT SU:

ML -- DE028 -- 1825 09/14/93 14:29 EDT
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Publication:PR Newswire
Date:Sep 14, 1993
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