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IMPORT DUTY ISSUE COSTS TAXPAYERS MORE THAN $500 MILLION

 MILWAUKEE, May 11 /PRNewswire/ -- Chrysler Corporation (NYSE: C) President Robert Lutz charged that American trade policy is costing taxpayers an estimated $500 million on one import duty rate issue alone.
 Lutz, speaking to the Milwaukee Rotary Club in conjunction with the city's Armed Forces Week celebration, said that the U.S. Treasury Department's decision in 1989 to override its own Customs Department and reclassify imported multipurpose vehicles (MPV) from trucks to cars costs the taxpayers at least $300 million a year in lost revenue. Cars pay an import duty of only 2.5 percent vs. a 25-percent duty on trucks.
 "... our trade policy in this country is, in many ways, a total anachronism -- a total throwback to the era of the Cold War," Lutz said, a period when the U.S. made economic and trade concessions to keep countries out of Soviet hands.
 Lutz said if the U.S. government had approached Cold War negotiations with Russia the same way it handles trade negotiations, "we'd all be speaking Russian today."
 U.S. approaches trade competition with naivete rather than facing the reality of intense economic competition, he said.
 Autos and auto parts account for a large percentage -- two-thirds -- of the staggering $450 billion trade deficit with Japan over the last decade, Lutz said.
 The Chrysler president criticized newspaper reports suggesting the industry is not being "injured" by the Japanese in the MPV tariff issue.
 "To me, that's like saying that since you have a house-full of furniture, why should you mind if somebody breaks in and steals one or two chairs," he said.
 Lutz suggested that U.S. taxpayers could pave a lot of roads, educate a lot of students and help reduce the budget debit with the $500 million in lost revenue in this single issue.
 He said the U.S. industry is not just whining; it is competing successfully here and in Europe.
 "Since the beginning of last year, Chrysler has gained more than two points of total market share in the U.S. And in that same period, Japanese vehicles as a whole have lost more than four points of share."
 Chrysler's European sales so far this year are up about 30 percent, while the European market as a whole is down about 20 percent, he told the group.
 Lutz pointed to one market where there is little success -- Japan. Total import vehicle penetration in the Japanese auto market was less than 3 percent last year, just slightly higher than the 2.6-percent import penetration for beer, he told the Milwaukee audience.
 He called for a managed trade policy.
 "Better to manage our own trade, than to continue to let others manage it for us," Lutz said.
 -0- 5/11/93
 /CONTACT: Lee Sechler of Chrysler, 313-252-8802/
 (C)


CO: Chrysler Corporation ST: Michigan, Wisconsin IN: AUT SU: ECO

JG-ML -- DE015 -- 7142 05/11/93 14:30 EDT
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Publication:PR Newswire
Date:May 11, 1993
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