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U.S. Manufacturers Seek More Use of American Parts

March 2, 1988

LAS VEGAS, Nev. (AP) _ Manufacturers of American auto parts are huddling with executives of 11 Japanese car companies in an effort to whittle away at a $6 billion trade deficit between the two countries in the auto parts industry.

Executives of the New Jersey-based Motor and Equipment Manufacturers Association say the current meetings are unprecedented, and offer an opportunity to cut the massive trade deficit between the two countries.

The meetings are being held Wednesday and Thursday between members of the U.S. group and purchasing agents of companies belonging to the Japanese Automobile Manufacturers Association.

The meetings are aimed at putting more American-made replacement parts under the hoods of Japanese cars, according to William A. Raftery, president of the auto parts organization.

″We believe the Japanese recognize the seriousness of the situation and are prepared to do something about it,″ Raftery said between meetings Wednesday.

Japanese auto parts companies are shipping $5 billion a year in parts to the United States, Raftery said. Some of the parts go to U.S. car companies, others are destined for Japanese cars that are sold in the United States, or to Japanese companies producing cars in the United States.

″The Japanese are buying more U.S. auto parts now that they are setting up factories here, but they are not purchasing nearly enough U.S. parts,″ Raftery said. ″The problem is that the Japanese have been encouraging Japanese suppliers to follow them to the U.S. and open plants here. That doesn’t provide new jobs, and it takes away U.S. jobs.

″When a foreign manufacturer opens a plant in the United States, whether the company is Japanese, German or whatever, they hire far fewer people than a similar American company,″ Raftery said.

When a foreign company builds a plant in the United States, they import more of their parts and tend to be in the assembly business rather than the manufacturing business, he said.

If the Japanese are going to sell their cars in the United States and take advantage of the new car market in America, ″they should give the U.S. manufacturer the opportunity to provide parts for some of those vehicles, as long as we’re price competitive,″ he said.

Only a very small percentage of Japanese cars use American-made parts while ″U.S. companies are using Japanese parts, Korean parts and Taiwanese parts,″ he said.

The Japanese are buying ″a few hundred million dollars″ in auto parts from U.S. companies while exporting billions of dollars in their own auto parts to America, he said.

He said the Japanese association is cooperating fully ″and has been extremely helpful in bringing these negotiations about.″

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