[Page 714]

246. Memorandum From Secretary of the Treasury Miller to President Carter 1

SUBJECT

  • Automobile Industry

Following your meeting of May 14 with the domestic auto producers and the UAW leadership,2 you asked for an interagency review of the industry and its problems. This memorandum reports on the results of that review; describes a package of recommended actions to help the industry, its workers, and affected communities; and seeks your decision on one issue—short-term import relief.

I. The Outlook for the Industry

The current situation faced by the industry can be divided into two parts: (1) the dramatic change in energy prices has shifted consumer preferences sharply toward smaller, more fuel-efficient cars, a shift for which the domestic industry was ill-prepared; and (2) business conditions have deteriorated sharply since mid-March, compounding the industry’s unemployment and profitability problems.

The Present Situation

Production and Sales—In 1978, sales of domestically-produced automobiles peaked at 9.3 million units. By the final quarter of 1979, sales had fallen to a seasonally-adjusted annual rate of 7.5 million units, reflecting the plunge in demand for larger and less fuel-efficient cars.

Spurred by rebates and a generally strong economy, sales reached 7.9 million units during the first quarter of 1980. Initial production plans for the second quarter were for 7.3 million units. However, as the economy weakened, these plans were continuously revised downward, so that actual second quarter domestic production will be close to a rate of about 5.5 million units. Truck sales are off even more sharply than auto sales. Both Ford and Chrysler have permanently closed plants.

Employment—By the third week in June, indefinite layoffs had grown to 239,000. The Ford and Chrysler permanent plant closings mentioned above account for about 33,000 of these indefinite layoffs. [Page 715]Layoffs have been heavily concentrated in the industrial midwest, with approximately 70 percent in Michigan, Ohio, Missouri, and Indiana. The layoff figures cited do not include the broader supplier industries, which are estimated to total approximately 450,000, or dealers that have closed or trimmed back employment. Thus, total auto-related layoffs may be approaching 800,000.

Financial—In the first quarter, General Motors reported profits 88 percent below the comparable levels of 1979. Ford’s North American operations lost $473 million, although overseas profits reduced the corporation’s total loss to $164 million. Chrysler reported losses of $448 million. Ford has announced deferrals of its capital investment plans that will reduce intermediate-term investments by $1.8 billion (1979 dollars). GM, on the other hand, is increasing and accelerating its planned investment.

Imports—Reflecting the growth in small-car demand, the import shares of the domestic automobile market rose from 17.7 percent in 1978 to 21.9 percent in 1979 and to 26.4 percent during the first quarter of 1980. The Japanese share of total automobile imports has risen from 68 percent in 1978 to 80 percent at present. During the second quarter sales slump, imports have suffered proportionate sales reductions in the market segments within which they principally compete (compact and subcompact), but the fact that demand in these market segments has remained relatively strong pushed the import share of the total domestic market up to 28.4 percent in May.

Outlook for the Next Few Months

The industry is pinning its hopes for a recovery on the 1981 models; no one expects a major increase in sales prior to their introduction in the fall. Unemployment in the industry may be nearing its peak, but it is normal for plants to be shut down for a month or so to retool; in some cases, these shutdowns will be lengthened by a week or so as the manufacturers hold off introduction of the 1981 models to reduce inventories of 1980 models. In July the auto firms will report their second quarter financial results; reflecting the recent fall-off in sales, these are likely to be as bad or worse than those of the first quarter.

Outlook for the Intermediate Term (Fall of 1980 to Fall of 1983)

During this period, the industry plans largely to complete its current round of downsizing, thereby positioning itself to compete more effectively against imports. GM, for example, plans to enlarge its capacity to produce fuel-efficient, front-wheel drive automobiles from 1.5 million at present to about 5.5 million in 1983. Total domestic front-wheel drive car capacity will reach 7.7 million in that year.

The extent of actual improvement in either industry employment or industry profitability will depend crucially on the public reception [Page 716]these new downsized domestic cars receive and on the overall state of the economy. The industry faces three significant problems during this period:

Employment—The level of total domestic sales may be so reduced by the recession, a subsequent sluggish recovery and continued high import penetration that high and regionally concentrated unemployment will continue for some time, both among auto workers and dealers.

Disinvestment—Prior to the onset of the recession, the ability of the industry to complete its downsizing was not in serious question, but the magnitude of the investments (and borrowing) required were large by historical standards. The recession will significantly worsen all the companies’ financial results over the next couple of years. Thus, it is quite possible that some companies will have trouble financing previously announced domestic downsizing plans. The firm of primary concern is Ford, which could elect to reduce its domestic size significantly because of the magnitude of its current and anticipated losses or due to its bleak view of its domestic future. This situation could be exacerbated if, as has been widely reported, the banks are reacting to the Chrysler situation3 and reducing their overall exposure in the automobile industry by cutting back new loans to the weaker manufacturers.

Imports—Imports may hold or even increase their current high share of the market. In order for the industry to weather the intermediate period of transition without relief from import competition, not only must the industry finance its conversion to smaller cars, but the public must also find these cars attractive relative to imports. The success of the new U.S. smaller cars is by no means automatic.

Over the past few years, imports have held about a 38 percent share of the subcompact and compact models, compared to a share of less than 5 percent for standard and larger cars. They have increased [Page 717]their share of the domestic market principally because the segments in which they have been strong have been growing rapidly. If these segments continue to grow in importance, and if import penetration in them is not reduced, then imports might ultimately capture as much of the total domestic market as they now have of the small car market, i.e., 38 percent.

Whether correctly or not, the public presently perceives foreign cars to be fuel-efficient and of higher quality than domestic cars. Changing this perception will not be easy. The fact that GM’s X-car has been so successful does not necessarily indicate that the imports can be beaten back. Much of GM’s gains have come at the expense of Ford and Chrysler. Chrysler’s K-car, if successful, may snare buyers from Ford’s presently weak compact line as much as from Toyota, Nissan, or Honda. Ford is especially vulnerable since its downsizing has lagged significantly behind either GM or Chrysler.

Outlook for the Longer Term (1984 and beyond)

This is the subject of a separate larger study headed by DOT. Briefly, the principal problems for this period are related to:

International Competitiveness—The Japanese (or others) may have a substantial and persistent cost advantage that translates into the potential for an ever growing share for imports.

Job Diminution Due to Productivity Gains—The long-term survival of the US auto industry depends on productivity gains competitive with those with other countries. To the extent that such gains are realized, fewer workers will be required to produce a given number of cars.

Depending upon the rate of productivity improvement assumed, 1985 auto industry employment could range from 816,000 to 1,042,000. The former figure is only slightly above the current level of industry employment. The latter is roughly equivalent to the 1978 level.

GM Dominance—In 1979, General Motors’ share of domestic car sales was 59 percent. In May 1980, its share had increased to 62 percent. If Chrysler survives, and if Ford “shrinks” its North American operations, the structure of the domestic auto industry is likely to be changed radically: the “Big Three” will become the “Big One” plus an “Intermediate 1-1/2,” plus a “Fringe.” As long as imports provide competition, this change does not necessarily pose a problem.

II. Description of the Package

The EPG recommends several proposals that will increase employment, ease the transitional difficulties of the localities and regions, and improve the investment climate. The proposals are limited to those that can be done now and, with one exception, to those that do not require any [Page 718]new funding. This section presents consensus recommendations in the areas of credit, regulation, unemployment, and taxes.

[Omitted here are recommendations on credit, regulation, unemployment, and taxes.]

III. Trade

The Section 201 case before the USITC,4 if it results in a finding of injury, will require that you reexamine your position on short-term import relief. Some of your advisers believe that you should request the USITC to accelerate its investigation in order to demonstrate your recognition of the urgency of the situation and as an initial signal to the Japanese and domestic interests that you may be prepared to modify your position on this issue and consider appropriate relief.

Background

It is clear that your handling of the import issue is of central importance in this review. Domestically, the unions, companies (in varying degrees), and many members of Congress feel that import restraints are necessary to demonstrate your support for the U.S. auto industry and its workers. Internationally, decisions in this area will be watched closely and may significantly affect the willingness of other countries to fulfill the Venice Summit commitment to resist protectionist pressures (particularly in light of the decision to extend color TV relief5 and of foreign anxiety about the steel dumping cases6) and the climate in the international trading system—even though most countries already have significant barriers to auto imports.

The Administration’s current policy, which has been stated repeatedly before congressional committees and in other public fora, is to oppose voluntary Japanese export restraints and legislated import restraints on autos. This policy, approved by you in March,7 was predicated on the adverse consequences of restrictions for our anti-inflation, trade, and energy policy objectives and the limited benefits to domestic [Page 719]firms and workers because most U.S. small cars (compacts and subcompacts) were already selling virtually as fast as they could be produced (also, the lack of explicit legal authority to restrain trade).

Since your decision in March, there have been a number of significant developments which have a bearing on the auto import situation and on public perceptions thereof. These include the following:

(1) As described in the first section of this memorandum, worsening economic conditions and tight credit have severely depressed second-quarter car production and sales (including U.S.-produced small cars), employment, and auto company financial results.

(2) Before March, the domestic producers’ weakness was concentrated in their large car sales, with small cars being produced at or near capacity and sold at record rates. After March, idle capacity in some small car lines and a general lagging of sales of small cars appeared as well, even though U.S. small cars have held their share of the small car market against imports.

(3) The import share of the U.S. market has continued at record high levels (it actually increased slightly—from 26.4 percent in the first quarter of 1980 to 28.4 percent in May). Due to weakened demand, absolute sales of imports declined after March (from an annual rate of 2.8 million units in the first quarter to 2.1 million in May). High import penetration, in conjunction with depressed sales, poor financial results of the auto firms, and major new layoffs have given impetus to demands for trade restrictions.

(4) In May, Treasury decided to reclassify cab chassis, thereby raising the tariff from 4 to 25 percent, effective mid-August. This decision affects $1.4 billion in U.S. imports, mostly from Japan, and should produce some relief for the domestic industry (see separate decision memo by Ambassador Askew).8 While this change was made for legal reasons, if you do not decide to modify it, it will benefit the domestic automotive industry through increases in sales and employment and you can take some credit domestically for leaving it in place (this is of particular interest to Ford).

(5) Since October 1979, the trade adjustment assistance program has certified over 370,000 autoworkers as eligible for assistance (where imports have been found to be a cause of unemployment)—170,000 have been certified since February. The Administration has had to request an additional $1.5 billion largely to meet the needs of these workers—with considerable public attention—and this amount is likely to increase further.

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(6) The UAW, on June 12, filed a complaint with the USITC, under Section 201 of the Trade Act of 1974, for import relief, a significant step for a traditionally “free trade” union which demonstrates how seriously it views the import situation. The USITC is expected to take its legally allotted six months to investigate the complaint, but is expected to vote publicly on injury about November 10. The Congress, the President, or the petitioner (UAW) may request an expedited determination by the USITC. The filing launches a domestic legal process which is fully consistent with our international GATT obligations.

(7) Ford has announced a deferral of its investment plans ($1.8 billion until after 1984), along with substantial cuts in overhead (e.g., white collar staff) for its current operations. These cutbacks are thought by some to be the beginning of a Ford retrenchment in North America and greater concentration in overseas operations. GM has announced an increase in and acceleration of its investments.

(8) The Congress passed a concurrent resolution which, among other things, calls on the Administration to review its import policies in order to assess their possible effect on the domestic industry’s effort to retool for lighter, fuel-efficient cars.

(9) There have been a number of significant developments recently in Japan (which accounts for 80 percent of our auto imports), including:

—The fall of the Ohira Government. The June 22 electoral victory of the Liberal Democratic Party was substantial, but it is considered unlikely that a new Prime Minister and Cabinet will be selected until the latter part of July. During this transition period, there is little that the Japanese Government can do substantively on the auto issue.

—Growing irritation between the Japanese Government and Japanese auto companies. Major factors are the Treasury decision on cab chassis tariffs, which the companies feel should have been opposed more vigorously by the government, and the failure of the auto companies to respond to MITI’s pleas to restrain their auto exports. Such irritations complicate the domestic problems of the government in handling the auto issue.

—At our urging, the Japanese Government has decided to eliminate most auto parts tariffs in 1981; simplify auto standards and licensing procedures; and send missions to the United States to promote imports by Japan of auto parts from America.9 This should create limited additional sales opportunities for U.S. auto producers, though these gains will not be realized for some time. (NOTE: The U.S. cab [Page 721]chassis tariff increase may make it difficult for the new Japanese Government to implement the elimination of parts duties.)

—Two Japanese auto companies (Honda and Nissan) have announced new investments in the United States, and a third (Toyota) has committed to invest here if a feasibility study now under way concludes that such an investment would be economically viable.

—While Japanese auto exports have fallen in recent months, there is no evidence that the auto companies are artificially restraining their sales to the U.S. market. The companies appear to be worried that any such restraint will cause them to lose market share to one another and create a serious risk they will be sued by their U.S. dealers for antitrust violations.

—At your request, the Japanese Government has been examining the issue of expansion of auto capacity in Japan, directed at the U.S. market. Their initial reaction is that such expansion is not taking place, and they plan to say so publicly. It appears they will be reluctant to explore this issue any further.

(10) Recent economic developments suggest that the domestic benefits of trade restrictions may be somewhat higher and the costs somewhat lower than were estimated in March, largely due to the appearance of some excess U.S. capacity to produce small cars. Despite possible upward revision of the benefits of trade restraints, under any reasonable set of assumptions, the short-term effects on auto employment are not large relative to current unemployment levels. For the next year (i.e., from July 1980 to June 1981), the maximum plausible import restriction is probably 250,000. If this were to generate 250,000 additional sales of domestic cars, auto industry unemployment would be reduced by about 19,000 workers, compared to current indefinite layoffs of about 240,000 workers. Indirect unemployment would be decreased by another 28,000 persons, compared to about 450,000 unemployed in the broader supplier industries. In the following year (July 1981 to June 1982), a trade restraint of perhaps twice the size (or 500,000 units) is conceivable. Still assuming the “upper bound” one-for-one domestic supply response, the employment gains during that year would be roughly double that for 1980–1981. A 100,000 unit per year restriction on Japanese imports could raise the price of the average imported Japanese car by $138, and could cost consumers from $0.2 to $1.1 billion, depending on whether domestic prices also rise. A restriction of 500,000 units could add $689 to the cost of a Japanese import and could cost consumers between $1.1 and $4.7 billion. This works out to a cost of between $25,000 and $100,000 for each job created. This ignores any possible savings in government outlays resulting from higher auto industry employment. (Attachment B to this memo provides [Page 722]estimates of the costs and benefits of import restraints under various assumptions.)10

(11) The Commerce Department, in May, completed and released a survey of auto trade restrictions in other countries that indicates most other markets have substantially higher barriers to imports than the United States.

Decision

Some of your advisers feel that you should request the USITC to accelerate its investigation and announce that you will expedite your decision on import relief should the USITC find injury. Others feel you should permit the investigation to go forward as scheduled.11

The current USITC schedule calls for a public vote on injury about November 10 and submission of its report to you in mid-December. You would then have 60 days to review the report and decide whether to grant import relief (by mid-February). If you were to decide to negotiate orderly marketing agreements, you could take an additional 90 days to conclude and implement such agreements (by mid-May).

If you request the USITC to accelerate its investigation, it is conceivable that its injury determination could be made 4–6 weeks earlier. It is unlikely the USITC could move much faster, given the time required to complete statistical surveys, hold public hearings, and receive post-hearing briefs. (In a recent case on canned mushrooms, the USITC accelerated its investigation by one month at USTR’s request.)12 Assuming the USITC would be willing to respond in a similar fashion on autos, its injury determination could be made in early October (possibly late September).

At that point—that is, before USITC’s recommendations for relief are submitted—USTR’s General Counsel believes it would be within [Page 723] USTR’s authority to initiate discussions with the Japanese on a possible Orderly Marketing Agreement if you felt that relief was in the national interest. (USTR would probably have to be authorized to negotiate the full range of U.S.-Japanese auto-related issues, including the cab chassis tariff and the final disposition of the 201 case.) USTR might, in fact, conclude such an agreement before the USITC completes its report to you. You could not, however, implement an agreement until you receive the USITC’s report. It is conceivable that agreement could be reached with Japan by late October and implemented in November under this approach. Should you await the final USITC report before deciding to grant relief, it is unlikely you could reach an agreement prior to mid-November and implement it before next year.

If the Japanese were unwilling to conclude an agreement, you would have to impose across-the-board relief on imports, including imports from Europe and Canada—through tariffs, tariff rate quotas, or quotas—since in initiating discussions with Japan on restraints, you would have effectively made the decision to grant relief.

Your request to the USITC for an accelerated USITC investigation would state that while you are not prejudging the outcome, a number of recent developments in the auto industry (e.g., high import penetration, poor financial results, layoffs, depressed sales, idle small car capacity) have heightened public concern about the current and future condition of the auto industry. You would indicate that you share that concern and feel that, given the importance of this issue to the nation, expedited USITC consideration of this case and expedited consideration of relief should it find injury, is warranted. You would recognize the need to give a fair hearing to all parties and stress the importance of doing so, but also stress that failure to move more rapidly may cause more serious complications.

The advantages of this approach are:

—Demonstrates your recognition of the urgency of the situation and is an initial signal that you may be prepared to modify your position and provide relief.

—Lays the groundwork for you to modify your position on trade restraints, within a legally established framework.

—Only approach under consideration here that offers the possibility of increasing auto employment and production in the near term, even though increases may be small.

—In moving up your decision, you will assure domestic unions and firms that they will have an early decision. It demonstrates your concern and will be regarded as a significant step.

—Send signal to Japanese auto companies not to aggressively push exports and expand capacity.

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—May reduce Congressional momentum to legislate restrictions.

—Gives you the possibility, but not the certainty, of announcing relief by November and putting it into effect before the end of 1980—as opposed to as late as May 1981 under the regular process.

—Failure to give this sort of signal of concern almost guarantees increased domestic criticism of your efforts to deal with auto industry’s problems, given the limited non-trade actions available to you.

—Responds to the concern expressed by the UAW and others that, except for Germany, the U.S. market remains the only major market totally open to imports.

The disadvantages of this approach are:

—Likely that this request will be seen as a signal of intent to reverse your previous position on trade restraints and as prejudicing the USITC procedure.

—The USITC Chairman has indicated privately that the Commissioners would find it extremely difficult to speed up the process in such a complex and sensitive case and give all parties a fair hearing.

—Conditions may not have changed sufficiently since March to justify this action. Though even modest employment benefits are important, they are gains at the expense of higher auto prices and inflation.

—Likely to cause concern internationally that you are moving in a protectionist direction after having reaffirmed at the Venice Summit a commitment to an open world trading system.

—Could cause increased apprehension in Europe that their auto exporters will get caught in an eventual across-the-board import relief action, when Japan is “the cause of the problem.”

—Creates the possibility you will have to make a decision on import relief before the election. In the event the USITC does not find injury, you will be in an awkward spot domestically.

—Over the short term (i.e., the next model year), substantial restrictions on imports, coupled with a domestic recovery and a continued shift in consumer preferences toward smaller cars, could cause the domestic industry to bump up against small car capacity restraints, increasing the likelihood that domestic small car prices will rise substantially.

Please indicate your decision below on requesting an expedited USITC investigation:13

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Approve (recommended by Treasury, DPS, USTR, DOT, DOL, Commerce)

Disapprove (recommended by CEA, Alfred Kahn, State, OMB, Henry Owen (see separate memo))14

IV. Likely Perception of the Proposal

Overall, this package will be well received by auto interests, although there will be some criticism that it does too little. In this regard, the trade issue is critical. Our perception of how the various parties affected by the proposals will receive them is as follows:

A. Industry—In general, they will be supportive and perceive the Government as being concerned and reacting promptly. In several areas, they will be disappointed that more was not done. They wanted more in the regulatory area, and legislative tax proposals. All were concerned with the problems of credit which prevailed at the time of the May 14th meeting, but these concerns have since eased. For at least two companies, Ford and Chrysler, the treatment of the trade issue will be particularly critical to their perception of the overall package. There will, however, be something there for each of the companies.

GM, by virtue of its strong financial and market position, will benefit from all actions the government takes. It has made tax and regulation its two top priorities.

—Ford’s overwhelming concern is the trade issue (including cab chassis). Regulation and the problems of the dealers were also issues they raised, but much lower priority. Ford will view our response on these areas as positive.

—Chrysler, AMC, and VW will benefit from the regulatory changes and the improved availability of dealer credit.

B. Unions and Employees—Import restraint is the most important item in their set of priorities. They will support the dealer credit element and adjustment aid for communities, as well as the formation of the auto committee. Historically, the unions have been critical or negative on tax breaks for industry.

C. State, Local, and Congressional—They will see the overall program as positive but weak without the import restrictions.

V. Contribution from Industry and Labor

All members of the EPG feel that it is important to ensure that our program is perceived as a cooperative effort to which all parties contribute and not simply as a series of concessions by the government to the automobile industry. During past weeks we have discussed with [Page 726]the industry areas in which we feel you may ask for their cooperation. (We have withheld discussing the package with the UAW until you have made your trade decision.) Most industry representatives have reacted favorably to our suggestions. The areas we have discussed are:

A. Wage-Price Restraint. If you are willing to consider new steps to deal with Japanese imports, there will be concern with the possible inflationary impacts of any restraints. We have indicated to each of the companies that under the circumstances you are likely to seek new commitments from them to restrain prices. All have agreed to recommit themselves to our existing price guidelines. These guidelines do not, however, significantly restrain price increases, both for technical reasons, and because industry profits are low. While a restatement from the industry of their commitment to the wage-price guidelines may be symbolically useful, it may not be perceived publicly as a significant action.

B. Participation in the Auto Industry Committee. The usefulness of the auto industry committee will only be as great as the commitment by all parties to participate openly and supportively. General Motors, Chrysler and VW all have indicated their willingness to do so. Ford and AMC have reservations, primarily regarding the loss of flexibility they fear from prenotification and open discussion of economic decisions to close plants. We believe that all parties would be willing to sit down to discuss how a group would be structured and to begin to set its agenda.

C. Fuel Economy. There is considerable public concern that, despite our regulations and industry investments, the U.S. auto industry will still remain far behind the Japanese in the fuel economy of its fleet. We have indicated to the companies that it is important for them to indicate publicly to you their commitment to push ahead as fast as possible in downsizing their fleets, and their confidence that their cars would soon be competitive from a fuel economy standpoint in world markets. All companies agreed to make firm statements on this subject.

D. Productivity and Product Quality. If our manufacturers are to remain competitive in world markets, it is important for them to improve the efficiency of their operations and the quality of their products. This will require a concerted effort by management and labor to introduce improved production techniques. Many of these changes may require sacrifices on the part of labor and extraordinary investment and risks by management. Chrysler and the UAW have already agreed to work together on this issue, and discussions between Ford and the UAW are under way. We are optimistic that their representatives will have positive statements to make concerning their future cooperation on the [Page 727]issue. In any case you should raise this issue in the meeting with the industry.15

  1. Source: Carter Library, Records of the Office of the Staff Secretary, Presidential File, Box 194, 7/3/80. Confidential. Watson and McDonald forwarded the memorandum to Carter under cover of a July 1 memorandum, which Carter initialed. (Ibid.)
  2. See footnote 3, Document 245.
  3. By the late 1970s, Chrysler Corporation, the third largest U.S. automotive producer, faced a financial crisis. In December 1978, Chrysler representatives broached the possibility of Federal assistance with White House officials. In July 1979, Chrysler publicly announced that it had requested $1 billion in Federal government assistance; the announcement came after the company had suffered a quarterly loss of $207.1 million, its largest ever. Following months of negotiations, on December 21, 1979, Congress approved $1.5 billion in loan guarantees for Chrysler, contingent upon the company’s fulfillment of certain conditions. This represented “the largest Federal rescue plan ever for an American company.” (Reginald Stuart, “Chrysler is Seeking a Billion in U.S. Aid After Record Loss,” The New York Times, August 1, 1979, p. A1; Judith Miller, “Congress Approves a Compromise Plan on Aid to Chrysler,” The New York Times, December 21, 1979, p. A1 (quotation is from this article); Judith Miller, “U.S. Board Approves $1.5 Billion Backing for Chrysler Loans,” The New York Times, May 11, 1980, p. 1) On January 7, 1980, Carter signed the Chrysler Corporation Loan Guarantee Act of 1979 into law; for his remarks at the signing, see Public Papers of the Presidents of the United States: Jimmy Carter, 1980–81, Book I, pp. 27–32.
  4. The UAW filed an automotive import relief petition with the USITC on June 12. (Clyde H. Farnsworth, “Auto Workers Union Asks U.S. To Curb Foreign Car Imports,” The New York Times, June 13, 1980, p. D9) On August 4, the Ford Motor Company also filed an automotive import relief petition with the USITC. (Peter Behr, “Ford Asks ITC to Put Sharp Import Limits on Japan Cars,” The Washington Post, August 5, 1980, p. D7)
  5. See Document 244.
  6. See Document 238.
  7. Askew sought Carter’s decision on whether the United States should “[d]iscourage the Japanese from restraining exports of automobiles” in a March 14 memorandum. A handwritten note at the top of Askew’s memorandum reads: “Original to Camp David.” (Carter Library, White House Central Files, Subject File, Box TA–30, TA 4–16, 1/20/77–1/20/81) No copy of Askew’s memorandum bearing Carter’s decision was found.
  8. See Document 245.
  9. See Document 242.
  10. Attachment B, attached but not printed, is an undated paper entitled “Costs of Trade Restrictions.”
  11. In a June 30 memorandum to Carter, Mondale supported the acceleration of the USITC investigation. In a July 1 memorandum to Carter, Eizenstat and DPS member Ralph Schlosstein summarized the positions of several U.S. officials on accelerating the investigation: Eizenstat, President’s Deputy Assistant for Intergovernmental Affairs Gene Eidenberg, McDonald, and Butler favored acceleration, while Schultze opposed it. Owen advised Carter to “proceed with efforts to obtain a favorable Japanese statement regarding plans for future Japanese capacity, and decide later whether to accelerate the ITC investigation only if Japan is not forthcoming.” McDonald offered his views in a July 1 memorandum to Carter entitled “Automobile Imports.” All three memoranda are in the Carter Library, Records of the Office of the Staff Secretary, Presidential File, Box 194, 7/3/80.
  12. Askew sought Carter’s decision on whether to provide relief for U.S. canned mushroom producers in an October 10 memorandum. Carter decided in favor of providing tariff relief. (Carter Library, Staff Office Files, Council of Economic Advisers, Charles L. Schultze Subject Files, Box 51, Memos from President [1])
  13. Carter did not indicate his decision.
  14. The memorandum was not found.
  15. Carter met with automotive industry representatives on July 8 at the Detroit Metropolitan Airport in Detroit, Michigan, from 7:09 until 7:42 a.m. (Carter Library, Presidential Materials, President’s Daily Diary) No memorandum of conversation of the meeting was found. After the meeting, Carter announced his administration’s automotive industry revitalization program. He also announced that he would ask for an acceleration of the USITC investigation. For the text of Carter’s remarks announcing his decisions, as well as a July 9 letter to USITC Chairman Bill Alberger in which Carter requested the acceleration of the USITC investigation, see Public Papers of the Presidents of the United States: Jimmy Carter, 1980–81, Book II, pp. 1329–1331. On November 10, the USITC voted against the automotive import relief petitions filed by the UAW and Ford Motor Company. (Clyde H. Farnsworth, “U.S. Rejects Limits on Japanese Autos,” The New York Times, November 11, 1980, p. A1)