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If You Can't Bear 'Em, Enjoin 'Em

The Big Three automakers -- Ford, Chrysler, and General Motors -- have been hit hard during the most recent economic downturn, each posting massive losses. Take mini-vans, for example. After pioneering this market, the recent performance of the Big Three has been anything but sterling. But instead of learning how to improve and market their mini-vans at more affordable prices, the Big Three have, once again, appealed for legislated trade privileges over their competitors.

Recently, the Big Three filed a complaint with the International Trade Commission (ITC), seeking to enjoin Toyota and Mazda from "dumping" mini-vans on the American market -- i.e., selling their mini-vans either for less than they "cost" to produce or less than such vans cost in America. This anti-dumping action, the first of its kind against Japanese automakers, alleges that Toyota and Mazda have been selling their mini-vans for as much as 27 percent below their "fair value."

Of course, this is not the first time the Big Three have cried foul against their superior Japanese counterparts. For some time now, the Big Three have been appealing to the Bush administration to ease up market place pressure (read: to secure favored status vis-a-vis their true competitors overseas). While the White House has so far resisted implementing direct regulatory policies, both the White House and Commerce Secretary Robert A. Masbacher may view this anti-dumping action as a proper vehicle for halting the alleged problem of the import-export imbalance.

Should the ITC find that Toyota and Mazda have been dumping their mini-vans on the American market, the Commerce Department would then slap import duties on the vans to raise their prices before they ever reach the car lot. Result: the American consumer loses once again.

To see why the Big Three are ranting and raving, we need to focus, for a moment, on the big picture. While Chrysler has long learned to cry on the government's shoulders, GM lost 12 percent of its market share to Japanese automakers in the 1980s. And don't forget the fact that Ford posted record losses during the first half of this year, with Chrysler and GM not far behind. Also, consider the fact that Japan is not married to America's wage-inflating and output-deflating labor unions, which means that Japanese autos can be produced at a lower cost.

What about the mini-van market, in particular? To date, the Big Three have invested six billion dollars in developing and marketing their boxes on wheels. But then it happened. Toyota and Mazda introduced their mechanically and aesthetically superior Previa and MPV, respectively, both of which met with the highest praise here at home. Although they are the new kids on the block, the Previa and MVP have recently been rated more highly than their Big Three counterparts.

Having once again been beaten on their home turf, the "Big Three" have done the only thing bullies ever do when they are humiliated: they have run home crying to Big Brother. By so doing, however, they are the ones who really have dumped on the American consumer.


Copyright © by Covenant Community Church of Orange County 1991
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