Automakers: Seek White House Action on Weak Yen; TACH Says: It Ain't The Price It's The Car

CHICAGO Reuters reported that the top executives of the U.S. Big Three auto manufacturers have sent a rare joint letter to the White House, asking President Bush to appeal to the Japanese government to stop weakening the yen to boost the profits of Japanese automakers, industry officials said on Wednesday.

The chief executive officers of General Motors Corp. Ford Motor Co.and DaimlerChrysler AG's Chrysler, which together account for nearly 4 percent of the U.S. economy, said in the letter sent last week that the weak yen is a threat to U.S. economic recovery.

``The letter is expressing their strong concern about the adverse competitive impact on all U.S. manufacturing industries,'' said Stephen Collins, president of the Automotive Trade Policy Council, which represents U.S. automakers. ``It's creating a competitive disadvantage for U.S. companies and hurting the restoration of the recovery in the manufacturing sector.''

U.S. automakers charge that Japan, in an effort to stimulate its weak economy, has purposely weakened the yen in order to make Japan's automakers more profitable from their sales of new cars and trucks in the U.S. market.

As proof, some officials cited Japan's Honda Motor Co. Ltd.

, which on Tuesday reported record third-quarter operating profits of 154.78 billion yen ($1.17 billion), about a quarter of which the Japanese automaker said resulted from the weaker yen.

MEETINGS PLANNED

The Bush administration has not yet responded to the letter, Collins said. But the White House has scheduled meetings with auto industry officials before Bush leaves on a trip to Asia, including a stop in Japan, at the end of next week, he added. Officials at the White House and the Treasury Secretary on Wednesday declined to comment on the letter.

GM said last week that it had met with Treasury Secretary Paul O'Neill, a former GM board member, to fight Japan's efforts to weaken the yen. However, O'Neill said he has no sympathy for U.S. manufacturers who complain about the strength of the dollar.

``The good ones don't live and die on exchange rates,'' he said last week in an interview with Reuters.

GM North America President Gary Cowger and Ford President Nick Scheele both said at the Chicago Auto Show here that the weak yen is one of the major issues confronting the U.S. automotive industry.

They said the weakened yen has given Japanese automakers a 30 percent profit advantage over their American competitors on the products they sell in the United States.

``It's a tough job to offset the 30 percent cost advantage that our Japanese competitors have gained over the past three years from the artificially low yen,'' Cowger said during a speech at the auto show.

However, executives from two Japanese automakers disputed their assertions.

``To say that there's a 30 percent advantage, it does not exist for Subaru,'' said Fred Adcock, executive vice president of Subaru of America. GM has a 20 percent stake in Subaru parent Fuji Heavy Industries Ltd. .

``It's the product, not the yen (that accounts for Toyota's success),'' said Donald Esmond, senior vice president with the Toyota division of Toyota's U.S. unit. ``That's old thinking. We should stop fighting and start competing.''