In May of 1980 the Japanese Government promised the Carter Administration to encourage the Japanese automobile industry to invest in the U.S. and to purchase U.S. built automobile parts. The Askew/Yasukawa agreement, which was named after the two negotiators, was signed as Japanese market share in the U.S. increased from 12 percent to 21 percent with the Iranian oil crisis of 1979 and the sudden increase in demand for small cars in the U.S. market. At that time virtually all Japanese vehicles sold in America were built in Japan with Japanese made auto parts. This brought demands from the Big Three, U.S. auto parts manufacturers and the United Auto Workers union that the Japanese invest in the American market and employ American workers.

The agreement was more symbolic than substantive since many of the Japanese automakers had already been seeking assembly sites in the U.S. and some plants were already under construction. Nevertheless, the Askew/Yasukawa agreement was an important milestone in the history of U.S-Japan automobile diplomacy and marked the shift of Japanese companies from importers to U.S. producers. Today, these companies are global and fully integrated into the fabric of America.

Consider the following:

• As of the end of last year Japanese vehicle manufacturers have spent a cumulative total of $28 billion building 12 assembly plants and 13 auto parts plants in the U.S. These facilities employ about 56,000 Americans. The JAMA companies have also established 34 R&D and design centers throughout the United States, employing an additional 3,000. Including dealerships and distributors Japanese vehicle manufacturers employ a total of 439,470 Americans (see fact sheet for details).
• Today about 67 percent of Japanese brand vehicles sold in America are produced in North America, mostly in the United States and largely with U.S. produced parts.
• Data recently released by JAMA shows that in 2004 JAMA member companies purchased $45.24 billion of U.S. automobile parts, an increase of 9.2 percent over 2003.
• Japanese companies currently export vehicles produced in U.S. plants to other countries around the world including Japan. In 2004 JAMA members exported almost 167,000 American built vehicles earning an estimated $4 billion in foreign exchange.
• Most of the JAMA member companies have established strategic alliances with U.S. and other foreign vehicle producers. Examples among others include Renault with Nissan; Ford with Mazda; and GM with Toyota, Subaru, Suzuki and Isuzu.

The U.S. market has changed significantly since the signing of the Askew/Yasukawa agreement 25 years ago. In the 1970s there were 5 manufacturers producing in North America (including American Motors and VW). Today, there are 15, three times that number. The market is more competitive in other ways as well. A decade ago there were a total of about 30 new models introduced in the U.S. market each year. Now there are 60 or more new models introduced each year. There is not only a race to introduce new models, but also to introduce new technology such as hybrid and fuel cell vehicles.

All this has brought the consumer more choices, higher quality, safer and more environmentally friendly vehicles at affordable prices — and they are produced in America. The credit for this goes not to a long forgotten agreement signed a quarter of a century ago, but rather to those Americans and Japanese who worked together to create this new dynamic. Nevertheless, the Askew/Yasukawa agreement marks the beginning of an extraordinary period of international investment and cooperation in the U.S. automobile industry which has brought significant benefits to U.S. workers and consumers. For this reason it is worth noting its anniversary.

Your thoughts and views about this commentary are welcome. Please send them to me at wd@jama.org or by fax to 202‑872‑1212.