MARKETING THE AMERICAN AUTO : Stempel Puts Positive Spin on Trade Trip : Cars: However, the GM chairman also cautioned that the Japanese market was still largely closed to U.S. auto sales.
DETROIT — In his first public remarks since returning to Detroit from last week’s presidential trade visit to Japan, General Motors Corp. Chairman Robert C. Stempel on Sunday sought to cast a positive spin on the trip, praising the improved U.S. government-industry relations that it appeared to herald.
But the leader of the world’s largest auto producer cautioned that the Japanese market was still largely closed to U.S. auto sales and that the loose agreement reached in Japan was but a first step in what would need to be a continuing process if the $30-billion auto trade deficit is to be eliminated.
“When we told the Japanese this wasn’t a one-time effort, when we told them there were going to be other meetings, you might describe their reaction as, ‘Oh, nuts!’-- only stronger,†Stempel said in a speech to the annual Automotive News World Congress.
Characteristically more subdued than Chrysler Corp. Chairman Lee A. Iacocca, Stempel nonetheless said he agreed with Iacocca’s speech last Friday, which was perhaps the harshest attack against the Japanese that the outspoken auto executive has rendered yet.
GM has long been a vehement advocate of free trade, putting it on the opposite side of the trade policy fence from the smaller and more vulnerable Chrysler. But Stempel acknowledged Sunday that he has departed from the company’s historic position on free trade in the face of the current recession and the realization that the Japanese are not “playing by the same rules.â€
“Yes, I did take a different view,†Stempel said. “I like free trade, but I like fair trade. It’s a subtle difference, but it’s there. It’s one thing that got the industry together for this trip. We could go with one position.â€
GM’s new trade outlook may be one result of its diminished position in the American market, symbolized by its announcement last month that it would close 21 plants and lay off 74,000 employees. Hammered by the recession, the No. 1 auto maker lost $2.2 billion in the first nine months of 1991 and was expected to lose money in the fourth quarter.
Stempel, who--along with Iacocca and Ford Motor Co. Chairman Harold A. Poling--took flak in Japan for the size of his compensation package, said that executives of the No. 1 auto maker might be asked to take pay cuts if the economy does not recover soon.
“We have never ruled out salary (cuts),†Stempel said. “We will see how much further this recession goes. There’s a host of things that still have to be done if the recession continues to drag us down.â€
The Big Three U.S. auto executives were among 18 U.S. business leaders to accompany President Bush to the trade talks in Japan last week. Japan agreed to increase purchases of U.S.-made cars and double to $19 billion the amount it spends on U.S.-made auto parts by 1994. It also agreed to relax vehicle certification standards that add hundreds of dollars to the price of vehicles imported from the United States.
