Auto Outlook: Does auto parts trade war loom?

By AL SWANSON, UPI Auto Writer  |  Sept. 23, 2012 at 5:30 AM
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CHICAGO, Sept. 23 (UPI) -- China's success in selling cars and auto parts in foreign markets such as South America prompted the U.S. government to file an anti-subsidy complaint with the World Trade Organization.

The Obama administration challenges at least $1 billion in subsidies Chinese provinces gave to domestic car companies and parts makers from 2009 to 2011.

"These are subsidies that directly harm working men and women on the assembly line in Ohio and Michigan and across the Midwest," the president said during a campaign stop in Cincinnati last week. "We are going to stop it. It's not right, it's against the rules and we will not let it stand."

Going after an unfair trade advantage China may have on the United States may be good politics in an election year, but The New York Times says the case will have no immediate impact on U.S. jobs and results over the long term are likely take more than a year to resolve and are likely to be limited.

"And unlike anti-dumping and anti-subsidy cases, which can result in steep tariffs on imports that stay in place for years, the trade organization cases often end with the losing country simply abandoning the offending policy," the Times said in an analysis.

The U.S. trade deficit in auto parts with China grew to $10.5 billion last year, from $3.2 billion five years earlier, The Detroit News reported, as imports of Chinese-made auto parts grew 700 percent over a decade to more than 10 percent of all U.S. imports.

Republican presidential nominee Mitt Romney called the trade complaint "too little, too late for American business and middle-class families." He vowed to take on China's unfair trade practices if he is elected and "ensure a level playing field where our businesses can compete and win."

For his part, Obama said Romney can't stand up to China when his former private equity fund, Bain Capital, was a pioneer in outsourcing jobs to China.

The United Auto Workers was supportive of the filing but Ford and General Motors took a wait-and-see attitude saying they hoped the matter would be resolved quickly.

China, which doesn't sell any cars in the United States yet, fired back in its own complaint with the WTO claiming the United States had unfairly calculated new tariffs on artificially cheap Chinese exports.

Shen Danyang, a spokesman for China's Commerce Ministry, said China opposes protectionism and always meets WTO rules, The Wall Street Journal reported.

"We can clearly see the political objectives of this move," he said.

NHTSA to crash test 54 cars, trucks

Those crash test dummies are going to get a real workout as the government prepares to crash test about 85 percent of all the models now on the market.

That's 33 new 2013 passenger cars, 16 sport utility vehicles, one van and four pickups.

The watchdog National Highway Traffic Safety Administration announced it would crash test 54 models, including the new Ford Fusion Electric, Ford C-MAX hybrid and plug-in hybrid Fusion Energi.

Other vehicles to be rated under the agency's 5-star system include the Dodge Dart, Cadillac ATS, Fiat 500, Toyota Prius C and V, the new Volkswagen Beetle, Mercedes C-Class, Jeep Patriot -- four popular small SUVs, the Ford Escape, Chevrolet Traverse, Hyundai Santa Fe and Mazda CX-5 -- the BMW X5 and four pickups, the Chevrolet Silverado 2500, Ram 1500, Ram 1500 Quad Cab and Toyota Tacoma.

"Safety is a major factor for consumers shopping for a new or used vehicle," U.S. Transportation Secretary Ray LaHood said in a statement.

The safety ratings, which began in 1978, award vehicles from one to five stars depending on their crash-worthiness and the program encourages automakers to develop advanced safety systems such as forward collision warning and lane departure warning. Since last year the ratings have featured side crashes into a pole and use a wider variety of crash test dummies, including a crash dummy the size of a petite female.

"For more than 30 years, NHTSA's 5-star safety ratings program has not only served as a guide for safety-conscious consumers, it has encouraged automakers to strive for ever greater safety improvements with each succeeding model year," said NHTSA Administrator David Strickland in a statement.

Previous crash test results are available on the website,

Ford banking on new Fusion lineup

Calling it a Camry fighter, Ford last week unveiled its all-new, euro-styled 2013 Fusion sedan, which hits showrooms this fall.

The mid-sized Fusion, which will come in all-electric and a gas-electric hybrid versions, as well as traditional gas burners, will do battle with the segment-leading Toyota Camry, Nissan Altima, Honda Accord and Chevrolet Malibu, all of which have been, or are being, redesigned.

It's a good time to be in the market for a mid-size passenger car, the segment that accounts for a quarter of all U.S. vehicle sales. The Fusion is Ford's best-selling car in the United States.

"All this time we've been kind of aiming for this sweet spot," Ford President and Chief Executive Officer Alan Mulally told reporters at a product launch event in New York's Times Square. "The new Fusion just turns your head when you see it."

The U.S. Environmental Protection Agency recently gave the Fusion hybrid a 47 mpg rating in combined city-highway driving, compared to a rating of 43 mpg city/39 mpg highway for the Camry Hybrid LE.

"We are absolutely committed to class-leading fuel efficiency as a reason to buy Ford vehicles, with customers able to choose the fuel-efficient powertrain that best fits their lifestyle," Mulally said in a statement.

Mulally, 67, took a few minutes to scotch rumors of his possible retirement, The Detroit News said.

"My plan is to continue to serve as the CEO of Ford," he said. "I think I am really clarifying (my intentions) now. If I had any plans to do anything differently, I would -- I would share it with everybody."

The News said Ford's board of directors is eyeing Ford Americas President Mark Fields as Mulally's likely successor. Mulally has headed Ford since 2006, guiding the company's dramatic resurgence that allowed it to avoid bankruptcy and government bailouts.

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