Toyota fears U.S. backlash as GM struggles

"Ultimately, U.S. consumers are consumers first and citizens second. Most people don't really think about where their vehicles are made," said Walter McManus, an auto analyst at the University of Michigan Transportation Research Institute.

"The attitude of 'buy American' — in cars at least — is pretty much gone," he said.

If anything, McManus said, Okuda's comments about raising prices on Toyota cars to help GM could backfire, at least among U.S. autoworkers.

"It may have been said with the best intentions, but it sounds condescending," he said.

Still, Japanese automakers remember well the trade friction from the 1980s and the Clinton administration's threat to curb Japanese auto imports 10 years ago for alleged unfair trade practices. And as a country heavily dependent on exports, Japan wants to do everything possible to avoid trade friction with the United States, its biggest market.

"The executives of Japanese automakers today all endured tough times back then and don't want to see a repeat of that history," said Koichi Sugimoto, auto analyst with Nomura Securities Co. "They can't help having that gut level reaction."

AP file Unionized auto workers reduce a Toyota Corolla to scrap metal in this 1981 rally against buying foreign-made products. Some analysts say it is only a matter of time before Toyota surpasses GM as the world's No. 1 automaker.

Clyde Prestowitz, a former trade negotiator in the Reagan administration, said a massive slowdown in the U.S. economy could chill ties with Japan.

"In a booming U.S. economy, it's fine. But if there's any kind of economic downturn, I wonder what the politics of that are," Prestowitz said.

A significant step toward closer cooperation between U.S. and Japanese auto companies would be a possible joint venture between GM and Toyota to produce environmentally friendly hybrid vehicles or fuel cell vehicles in the United States.

The venture would allow the world's two biggest automakers to share the costs of developing fuel cell cars — which many in the industry believe will eventually replace gasoline-powered vehicles. Fuel cell vehicles emit no pollution because they run on power produced when hydrogen stored as fuel in the car combines with oxygen in the air to make water.

The Nihon Keizai Shimbun, Japan's biggest business daily, reported Thursday that Cho and Wagoner could discuss the project at their meeting Saturday, although the report denied a deal was imminent. GM's spokesman for advanced technology Scott Fosgard denied that any specific talks about a technology pact were planned.

In another move that could be seen as trying to warm ties with the U.S., Toyota said earlier this year that it will build hybrid vehicles at a plant in the United States. According to a report on the Kyodo News wire service Thursday, Toyota picked its plant in Georgetown, Kentucky, as the production site, but Toyota officials would not confirm the report.

Toyota and GM already have a partnership, although it does not involve investment stakes in each other. They run an auto plant in California together and have exchanged research before, including a 1999 pact to work on environmental technology together.

Still, the worries keep looming.

Prime Minister Junichiro Koizumi and U.S. Chamber of Commerce President Thomas Donahue discussed concerns about GM at a meeting Thursday.

Koizumi told reporters he had also met with Okuda, who said he was very worried about the plight of American automakers, and they agreed on the need to work out cooperative relations with U.S. automakers.

"The auto industry is a symbol of the United States, and we wish the best for GM," Koizumi said.

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