JAPAN: ‘Protectionist backlash’ concerns over US-JP relations surface ahead of Wagoner-Cho meeting

By just-auto.com editorial team | 12 May 2005

Reports in Japan suggest that the contrasting fortunes of GM and Toyota are giving rise to worries that we could see a return to the trade frictions and 'Japan bashing' of the 1980s.

The massively asymmetrical financial performances of GM and Toyota are said to have left Japanese government and auto industry officials worried that Toyota is doing too well and that its success could set off a protectionist backlash in America, its biggest overseas market.

Japan, which depends on exports for growth, is vulnerable to protectionist moves in the United States, which has threatened to curb Japanese auto imports in the past for alleged unfair trade practices.

According to an Associated Press report, Prime Minister Junichiro Koizumi said Thursday after a meeting with US Chamber of Commerce President Thomas Donahue, that they discussed their concerns about General Motors.

"The auto industry is a symbol of the United States, and we wish the best for GM," Koizumi told reporters, adding that US and Japanese automakers must coexist and prosper together.

Toyota Chairman Hiroshi Okuda caused a stir recently by saying he was considering raising prices on Toyota cars in the United States as well as sharing technological research to help troubled American automakers in an apparent effort to stave off anti-Japanese sentiments, AP said.

Koizumi said he had also met with Okuda, who was very worried about the plight of American automakers, and they agreed on the need to work out cooperative relations.

Toyota confirmed that GM Chief Executive Rick Wagoner and Toyota President Fujio Cho are meeting when Wagoner visits the 2005 World Expo in Aichi, where Toyota is based, this weekend.

The Nihon Keizai Shimbun, Japan's biggest business daily, reported Thursday that Cho and Wagoner may be discussing Saturday a possible joint venture to produce fuel cell vehicles in the United States although the report denied a deal was imminent.

"The decline of the once invincible American auto industry in the face of Japanese competition could set off a nationalistic backlash among American consumers," Japanese daily Asahi Shimbun said in an editorial this week. "There is every reason for Japanese automakers to work hard to avoid unnecessary conflict."

Sectors: Vehicle manufacturers

Companies: Toyota, GM

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There is currently 1 comment on this article

quote:
"The auto industry is a symbol of the United States, and we wish the best for GM," Koizumi told reporters,

If automotive industry is sick, the country is sick. Only the change of [most] high-ranking management at US automakers could change the situation. Americans are not stupid, and backlash against superior products is not, in my view, in the cards. When in 1980s the Japanese reduced the number of cars exported to US, they were selling them for more money! Consumer got hurt, but it did not relieve any pressure on automakers. It looks to me only the take-overs could resolve the situation. GM and Ford will have to scrap the pension obligations, the money was squandered, and is not anymore there. Just look what airlines are doing. Automakers are in very similar situation. Just look at hedge funds, when they start to crumble, watch out… In two words; don’t blame the workers, blame the top management. I would also blame the management layer just below for not trying to change things when it was still time… I’m afraid, it may be too late now…

Mark Kmicikiewicz said at 9:03 pm, May 12, 2005

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