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Japan urged to open ‘cash for clunkers’ to Detroit Big 3

January 16, 2010 http://detnews.com/article/20100116/AUTO01/1160317

Japan urged to open ‘cash for clunkers’ to Detroit Big 3

DAVID SHEPARDSON
The Detroit News

Congress is pushing the Japanese government to open its "cash for clunkers" program to Detroit’s Big Three automakers.

A group of 40 House Democrats wrote a letter Friday to Ichiro Fujisaki, Japan’s ambassador to the United States, calling for the country to allow U.S. manufacturers to participate. Congress is planning two hearings on the issue in coming weeks.

The Democrats criticized Japan’s "unfortunate historical pattern of the Japanese government keeping its domestic auto industry closed to foreign competition." Lawmakers who signed the letter included Rep. Gary Peters, D-Bloomfield Township, and Rep. Mark Schauer, D-Battle Creek.

Japan’s program expires March 31, but may be extended.

The Japanese government has rejected criticism that its $3.7 billion program unfairly excludes Detroit automakers.

Satoshi Miura, a consular official in the Japanese Embassy in Washington who handles auto issues, said this month the government believes "our program is fair and is nondiscriminatory."

Miura noted that U.S. manufacturers could participate if they followed the same import rules as many others companies. But they opt to use rules that don’t require the same emissions testing because they sell so few cars in Japan.

Japan is providing a tax cut of up to $2,830 to consumers who scrap a car at least 13 years old and purchase a new vehicle that meets 2010 fuel efficiency requirements. A $1,130 incentive is available to new vehicle purchasers who do not scrap a vehicle.

The Japanese auto market has long been one of the most closed in the world for U.S. automakers and other imports, which account for less than 5 percent of sales there.

The House Ways and Means subcommittee on trade will hold a hearing Wednesday on barriers to U.S. auto imports in Japan and South Korea. A House Energy and Commerce subcommittee chaired by Rep. Bart Stupak, D-Menominee, plans a Jan. 26 hearing on Japan’s program.

Separately, Rep. John Dingell, D-Dearborn, wrote President Barack Obama Thursday urging him to pressure the Japanese government to open its program to U.S. and other foreign automakers, and to file a protest with the World Trade Organization.

Dingell cited a report from Ann Arbor’s Center for Automotive Research that said limiting the U.S. clunkers program to North American-made vehicles would have created 15,900 U.S. auto jobs.

Nearly half of the $3 billion invested in the U.S. program went toward buying Japanese vehicles. Japanese brands grabbed 319,300 of a total 677,000 vehicle sales. Consumers were offered up to $4,500 to trade in gas-guzzlers for more fuel-sipping models.

The American program "provided unfettered access to the U.S. market for foreign automakers, many of which benefited handsomely," Dingell wrote. "U.S. automakers are effectively prohibited from participating" in Japan’s program.

Rep. Betty Sutton, D-Ohio, and Sen. Debbie Stabenow, D-Lansing, have filed resolutions in Congress urging Japan to open the program, and the U.S. Trade Representative has raised the issue informally with Japan.

Rep. Sander Levin, D-Royal Oak, said South Korea’s clunkers program also stands "in sharp contrast" to its U.S. counterpart, and that Japanese and South Korean automakers "benefited enormously" from the U.S. initiative. "Especially in this economic crisis, such barriers cannot and should not be tolerated," he said.

In an interview Friday, John Krafcik, CEO of Hyundai Motor Co.’s American sales operations, disputed suggestions that South Korea’s program isn’t open.

He noted that General Motors Co. owns a majority of Korean automaker Daewoo. "GM is benefiting in a very direct way," Krafcik said, "so I really don’t understand all the fuss."

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