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Detroit vs. Tokyo



lFCBcdlCBif~n ll«CB~CB1fWCB ill) cBi h111k CG) fr § ©\1l1 IF if @,iffiCC n ~CC (G) May 15, 1981 Detroit vs. Tokyo Back in the 1950's, a Bank of Japan governor said, "There is no reason to bel ieve that we in Japan may stay competitive with imported cars. Stop manufacturing passenger cars in Japan!/I Japanese automakers decided to ig- nore his advice. Millions of people associated with the u.S. auto industry (but not u.s. consumers) are now sorry that they did. In 1980, Japan became the world's largest automotive producer-turning out roughly 11 million cars, trucks and buses. In contrast, the u.s. last year produced about 8 million units (including 6 Y2 million autos) -the smallest number of the past 20 years, and a striking comedown for a country which accounted for three-fourths of total world production in the aftermath of World War II. Japan's performance in 1980 was led by exports, which represented more than half of Japanese production, and which soared more than 30 percent in a year when worldwide auto demand dropped about 10 percent. Imported cars (three-fourths Japanese) took over more than one-fourth of the U.S. market (see chart) -and roughly half of the style- setting California market. As a final blow, Japanese and other imports accounted for one seventh of all the cars sold in Michigan, the heartland of the u.S. auto industry. Domestic sales and production data, conse- quently, made very disturbing reading in 1980. U.S. auto producers lost an unprece- dented $4 bi II ion last year, and at year-end one-fourth of the automotive workforce was jobless. Cries of alarm soon resounded through the halls of Congress, because this key industry and its suppliers account for roughly one-sixth of the nation's workforce. Detroit's products and services represent 8V2 percent of GNP and 25 percent of retail sales. The industry uses 21 percent of the nation's steel, 60 percent of its synthetic rubber, 25 percent of its glass, 20 percent of its machine

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