OTHER NEWS - June 19, 1992

Study Says Tax Could Help U.S. Auto Makers Compete: U.S. auto makers could continue shrinking the cost gap between their cars and Japan’s with a tax to pay for the Big Three’s health and pension costs, private researchers said in a study Thursday. The Economic Strategy Institute said domestic producers have to shell out nearly $400 per car to cover their health care and pension costs, putting them at a disadvantage with the Japanese. The study concluded that the U.S. makers can compete, but they might need a “small excise tax” to help them survive. The group conducted a yearlong study, partially paid for by Ford Motor Co. and Chrysler Corp., which found that Ford and Chrysler had increased the cost efficiency of their operations and had surpassed previous industry leader Toyota Motor Corp. It said Ford’s direct cost of building a small car is $5,416; Chrysler’s cost is $5,841; Toyota’s is $6,216, and General Motors Corp.’s is $7,205.