Irrespective of the GM/Toyota deal, our tooling

industry is already in decline. Census figures show that
13,000 fewer people are working in the industry in 1980
than in 1970. It takes years to create tooling capacity.
In terms of manpower, four years of apprenticeship and
ten years of experience are necessary to create a skilled
employee. Our industry requires complicated machinery,
including mills, presses, duplicators, cutting tools and
gigantic machining centers. It requires the use of heavy
cranes, long bays, and complicated support facilities,
including foundries, engineering and design, and tool steels.
In years past, the loss of major customers, such as
Packard, Hudson, Studebaker, and others, has taken its
toll. If the Toyota-General Motors joint venture further
reduces the market for tooling in the U. S., the industry
will be further diminished.

General Motors is probably the largest manufacturer in
the world, producing 55 percent of the automobiles produced in
the United States and controlling 42 percent of the U. S.
automobile market. If this type of a venture is permitted
for General Motors, the other manufacturers will not be far

behind.

Approximately 25 percent of all U.S. tools are built for the

Ford

automotive industry and its suppliers. If Ford, Chrysler, International Harvester, Caterpillar and others follow the General Motors route, as can be anticipated, the effect upon our industry will be devastating. That this is not an idle concern is demonstrated by the fact that shortly after the GM-Toyota announcement, Ford cancelled 33 million tooling hours and announced joint venture plans with Toyo-Kogo. is apparently not protesting the GM-Toyota venture. American Motors, (French owned), already sources its tools primarily from its parent in France. Chrysler is protesting the Toyota venture, but continues to use Japanese engines from Mitsubishi in its automobiles. The Volkswagen Pennsylvania plant is tooled primarily from Germany.

Where does this leave the

American worker in our industry? I'll tell you. It leaves him out in the cold and out of a job!

I want this Committee to note the fact that neither General Motors nor Toyota have made any public commitment in connection with their joint venture as to what portion of the tooling for the California plant will be from United States sources. In addition, General Motors has made no public statement concerning the extent to which the proposed increases in its tooling capacity are intended to replace the tooling and machining obtained from outside sources. Unless General Motors and Toyota are willing to make public commitments that the new

venture will not reduce competition for tooling and machining in the United States, the proposed GM-Toyota joint venture

should be disapproved forthwith!

I also want this Committee to note that the Japanese hog any market they participate in. You can bet that the Japanese will secure every tooling and machining job possible for their workers. Your constituents will once again be asked to take it on the chin.

Proponents of the General Motors-Toyota joint venture have claimed that the joint venture will create 3,000 new jobs in the California assembly plant where the merger car will be assembled. What has not been explained is that this will cost a net loss of 18,350 jobs, most of them in the midwestern states suffering the highest unemployment.

Two factors figure prominently in the determination of projected U. S. job loss. The first is that the actual assembly of an automobile generally accounts for about 15-20% of the total labor and manufacturing costs of an automobile. The remainder is accounted for by the manufacture or purchase of the parts which are being assembled, plus the tooling which is required for the manufacture and assembly of those parts. The second factor is that the automobile manufactured

in a GM-Toyota joint venture will replace either immediately or in the future, an equivalent automobile which is either now produced or which would eventually be produced in this country by General Motors. The joint venture vehicle has been mentioned as a replacement for the Chevette. All of the jobs

associated with the production of the Chevette, its successor, or another vehicle which GM would have otherwise manufactured, will be lost to the Japanese.

An estimated 17,000 jobs are associated with the manufacture of the Chevette. This includes jobs at the Wilmington, Delaware assembly plant, plus a portion of those jobs at the Flint, Michigan engine plant; the Buffalo, New York axle plant; the Warren, Michigan front suspension plant; and the Saginaw, Michigan steering gear plant. Mr. Chairman, all of these jobs will be lost.

In addition, a large number of highly skilled jobs will be lost in the contract tooling and machining industry which is a major supplier to General Motors.

Other supplier industries

will also suffer. The 1982 U. S. Industrial Outlook estimated that there were 114,000 workers in the contract tooling and machining industry in 1981, a figure considered to be vastly understated by the National Tooling and Machining Association. Of those 114,000 jobs, about 25% or 28,500 are related to direct or indirect support of the U. S. automobile industry. General Motors accounts for 55% of the U. S. auto industry, so 15,675 of the jobs in this industry are attributable to sales to General Motors. Assuming that 15% of those jobs are related to the manufacture of the Chevette, then 2,351 jobs in the contract

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tooling industry will be lost as a result of the merger.

Add to that another 2,000 or so jobs attributable to other suppliers of General Motors, which may or may not be a large enough number to take into account jobs created by support industries to the direct suppliers of General Motors, and the total jobs which could be lost is 18,351.

It is important to note that although we have used the Chevette as an example in order to be able to have some finite numbers to work with, similar figures would apply whether the proposed joint venture vehicle replaced another vehicle currently in production or whether it was a new addition to

the product line.

In either case,

most of the sales of the new vehicle

would come at the expense of U.S. sales and U.S. jobs related to other U.S. vehicles priced just above or just below the proposed joint venture vehicle. The reason is that automobile demand, like the demand for any product, is not totally elastic. If the addition of a new vehicle would produce new sales without affecting the sale of other domestic autos, our problems with unemployment in the auto industry would be over. All U.S. auto manufacturers would need do would be to produce a large number of new models, each targeted to a slightly different market segment than current models. Sales of U.S. autos would go up dramatically and unemployment in the auto industry would disappear.

Of course, such an assumption is absurd.

There is only

a potential market for so many cars in the U.S. in a given year, and the addition of new products only means that the pie is divided into smaller pieces. Somebody's production line must suffer as a result. Are we to suffer through all of this in order to create 3,000 new jobs in California?

Mr. Chairman, please SAVE OUR JOBS!

Thank you.