GM CFO Criticizes Japa
GM CFO Criticizes Japa
Oct. 21, 2003
TOKYO (AP) _ A top executive at U.S. automaker General Motors Corp. criticized Japan's interventions in currency markets, saying they give Japanese auto exporters an edge in the United States.
GM's chief financial officer John Devine said Tuesday that by keeping the yen weak, Tokyo is effectively subsidizing Japanese exporters by creating ``windfall profits'' for them.
``We believe the weak yen has given Japanese automakers an unfair advantage as they compete in the U.S. market,'' he said.
Tokyo has repeatedly intervened to weaken the yen. It pumped more than 13 trillion yen ($118 billion) into the currency market this year to push up the dollar.
Devine said the dollar would be at 100 yen or lower if exchange rates were left up to market forces. The dollar has plunged to about 110 yen recently from as high as 120 yen earlier this year, but Japan has intervened to stem the dollar's fall.
A strong yen hurts Japan's giant exporters like Toyota Motor Corp. and Honda Motor Co. by eroding their overseas profits when converted into yen.
Devine's remarks underscore frustrations among U.S. auto manufacturers as they face intensifying competition in their home market from Japanese rivals. General Motors' discount programs to woo buyers amid sluggish demand have also hurt its profits.
``We're going to compete regardless of the value of the yen,'' Devine said. ``We're not going to back off. We will be aggressive in the marketplace.''
On Monday, GM chief executive Rick Wagoner praised the alliances the Detroit automaker has with Japanese automakers as helping boost profits, although he acknowledged GM car sales in Japan weren't going as well as he had hoped.
GM has benefited from diesel engines from Isuzu Motors, a new Saab model from Fuji Heavy Industries, which makes Subaru cars, and a dealership chain in Japan to sell Chevrolets from Suzuki Motor Corp., Wagoner said.
Imports make up a fraction of the Japanese auto market, and DaimlerChrysler's Mercedes and Volkswagen are the most popular nameplates here.
Japan has been relying on exports to spur growth at a time when the economy is showing signs of recovery after slipping in and out of recession over the past decade.