The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. It was a good news/bad news day for President Reagan. His economic advisers produced a rosy forecast for '84, the kind of economic winds that would make smooth election sailing for the President. The bad news came from Beirut. The Islamic terrorists who claim all the recent truck bombings said the U.S. and France have 10 days to get out or they will "make the earth shake under their feet." We explore an emerging alternative -- U.N. troops to replace the multinational force. Jim Lehrer is off; Judy Woodruff is in Washington. Judy?

JUDY WOODRUFF: And tonight we take a look at two decisions announced here in Washington, one that clears the way for a deal between General Motors and Toyota. We'll hear from a pleased representative of GM and a less-than-pleased spokesman for Chrysler.We'll also look at children's television and an FCC ruling that will read well at local stations. And we turn to Soviet goals in space. Is Mars next?

WOODRUFF: A Moslem extremist group today gave what it called a last warning to American and French troops to get out of Lebanon within 10 days. The group, calling itself the Islamic Holy War, took credit for yesterday's bombing outside the French headquarters in Beirut which killed 10 people. A man called the news agency, Agence France Presse, in Beirut and identified himself as representing the Islamic Holy War. If American and French forces don't leave Lebanon, he said, "We shall make the earth shake underneath their feet." The pro-Iranian Shiite Moslem group also has said it was behind the bombing of U.S. Marine headquarters last October that left nearly 300 dead.

In Washington Defense Secretary Caspar Weinberger said today that a Pentagon report on the Marine bombing is critical, and blames a number of U.S. officials for not exercising better judgment. Weinberger said that he's reviewing the report and that it may be released to the public as early as tomorrow. But Weinberger also said it is impossible to guarantee the safety of American servicemen in Lebanon where what he called "a war of terrorism" is going on. And in another interview today Weinberger revealed that a major effort has been made to persuade other nations to contribute to the multinational force in Lebanon, but that about 15 countries have declined. The defense secretary said he did not know why, but suggested that in some cases cost was a factor.

Robin? U.N. Troops for Beirut?

MacNEIL: One idea gaining increasing credibility in diplomatic circles is that the multinational force, including the United States Marines, be replaced by U.N. troops. The United Nations already has a peacekeeping force in southern Lebanon near the Isreali-Syrian border. Yesterday, U.N. Secretary-General Perez de Cuellar said a U.N. force would be more effective, and the U.N.'s top political adviser, Brian Urghart, has said the multinational force, by drifting into the reprisal game, has lost its capacity to bring peace to Lebanon. For more on current diplomatic efforts at the United Nations we turn to Michael Berlin, diplomatic correspondent for the New York Post. Mr. Berlin has been reporting on the United Nations since 1967. Mr. Berlin, where exactly is the U.N. force suggestion at the moment?

MICHAEL BERLIN: At the moment it's just a proposal made in very general terms by the secretary-general at his press conference yesterday. He claimed that there was renewed interest in having the U.N. troops, who have been in Lebanon for a number of years and are now in the south, replace the multinational force. There is no tangible evidence that the thing is politically feasible and that remains the basic problem.

MacNEIL: Well, let's explore that a little bit. For instance, do you happen to know from your reporting whether it's been in any way discussed with U.S. representatives yet?

Mr. BERLIN: It's been discussed ever since the multinational force went into Lebanon in September of 1982. The first idea was to put U.N. troops there. At the time it was opposed by Israel, which did not trust U.N. peacekeeping operations, and the United States supported the Israeli position.As a result, multinational forces had to go in to help evacuate the PLO from Beirut. Since a few months after that the -- it was the Soviets and Syrians who, as the tables turned in Lebanon, opposed the replacement of the multinational force by a U.N. force. This was never proposed formally, but their position has been known over these months.

MacNEIL: I see. Do you happen to know whether the United States, in the predicament that the troops are in there now, whether it has been exploring with the U.N. whether this idea would now be feasible?

Mr. BERLIN: It's been explored off and on ever since -- for the last year.

MacNEIL: I see.

Mr. BERLIN: Since about December of 1982. The American position as stated as recently as two days ago by Jeane Kirkpatrick was that the United States would still encourage a stronger U.N. role, a broader U.N. role in Lebanon.

MacNEIL: Now, based on your many years of covering the U.N., do you, just as a hunch as a reporter, do you think this is a realistic idea that's going anywhere or not?

Mr. BERLIN: It's not realistic right now, and the reason is that the Russians have the capacity to block the deployment of U.N. troops because of their veto in the Security Council.

MacNEIL: And this would have to be approved by the Security Council and not the General Assembly, is that it?

Mr. BERLIN: That's right.

MacNEIL: Is that the case?

Mr. BERLIN: Even to move the present U.N. troops from southern Lebanon into Beirut where they would replace the multinational force -- the British, Americans, French and Italians -- they would have to be approved by the Security Council. The Soviet Union, by voting no, could block such a move.

MacNEIL: Considering that this would be, if a U.N. force could replace the multinational force, a very honorable out for the predicament the U.S. finds itself in now, do you know whether other countries think it's a good idea? Have you found that any other representatives at the U.N. think it is a good idea now?

Mr. BERLIN: I'm told that the Israelis are more amenable now than they were over a year ago to such a move. They feel that the U.N. force would be able to keep things cool in the Beirut area.

MacNEIL: What about the British and the French and the Italians, who also have troops there?

Mr. BERLIN: I think they would love it. The problem is that the Russians are asking a very high price. The Russians, talking to reporters in the last few days, have been saying that they rather like the spectacle of the United States taking its lumps in Beirut.

MacNEIL: They're actually saying that, are they?

Mr. BERLIN: That's right. They're saying it openly. I mean, in the corridor conversation that one cannot attribute to a Russian displomat by name, but still -- they're saying that the United States is in an awkward political situation in Lebanon and at home, and they're very pleased to see the United States caught in this bind.

MacNEIL: Now, I wonder what the rationale of U.N. officials like the secretary-general is as to why a U.N. force would be more useful there than -- and be able to carry out the job better than the multinational force.

Mr. BERLIN: I really -- recently had a long conversation with Brian Urghart, who has been involved in all the U.N. peacekeeping forces since Year One back in 1947. He believes that with a U.N. force, first of all you have Security Council approval, which gives you 15 countries backing the force, including all five big powers. Insurgents who are backed by the Syrians and Russians would find it rather awkward to attack a force with that political backing. So the political backing which the multinational force does not have is the first. Second thing is the capacity to have a unified command under the U.N. flag so that all the actions of the force are taken in coordination, especially in times of emergency this is essential, he feels.

MacNEIL: Is it also that the U.S. and French forces in particular, because of their reprisals against the Druse and other Moslem militias, are perceived as being on one side of this political situation and that the U.N. would be perceived as neutral? Is that --

Mr. BERLIN: That in fact was his third point, that by -- as you say, the reprisal game, as he put it, the United States is perceived as being part of the problem rather than part of the solution, and U.N. troops, he pointed out, are capable of dealing with the de facto leaders of all militias, each unit of militia, each force. They are able to go through checkpoints; they are able to negotiate a halt in fighting that has been started by some accidental explosion which has provoked a counterattack. The multinational force was always perceived as being on the side of the Gemayel government in Lebanon, and as Brian pointed out, that in itself is taking sides in Lebanon these days.

MacNEIL: Mr. Berlin, thank you.

Judy?

WOODRUFF: PLO Chairman Yasir Arafat was back in the news today, making history with his first public contact with a ranking Egyptian official since 1979, when Egypt signed a peace treaty with Israel. Arafat was greeted by President Hosni Mubarak with a warm embrace, a symbol of reconciliation between Arafat's wing of the PLO and Egypt, the only Arab nation that recognizes Israel. At the Kubbeh Palace in Cairo, the leaders met for two hours. Later Arafat called Egypt "the real supporter of the Palestinian people," and Mubarak praised Arafat as a moderate leader of the Palestinians. The Arafat-Mubarak meeting has made just about everybody but the Americans angry. In Tel Aviv, Israeli Prime Minister Shamir expressed astonishment and regret, while the Israeli Foreign Ministry called it a severe blow to peace efforts for the Egyptians to have sat down with Arafat.

At the other end of the spectrum, radical Palestinians joined PLO rebels in attacking the get-together. Abu Saleh, who is leader of the rebels, warned the Arab countries not to deal with Arafat from this day forth and to sign no agreements with him. Saleh said that Arafat is not the legal leader of the PLO. Perhaps more significant, George Habash, who previously tried to stay out of the fight over Arafat's leadership of the PLO, said that Arafat must be sacked from his position as chairman immediately. Habash, who heads the Popular Front for the Liberation of Palestine, said that Arafat's treachery has become obvious.

In Washington, however, the reaction was more positive. It came from State Department spokesman John Hughes.

JOHN HUGHES, spokesman, State Department: The United States views renewed Egyptian-PLO discussions as an encouraging development, given Egypt's adherence to the Camp David accord and its outspoken support for the Reagan initiative. We are hopeful that such talks will serve to persuade Mr. Arafat that peace negotiations within the framework of the President's initiative are the best means of achieving Palestinian goals. Our position on the PLO and Mr. Arafat remains unchanged in terms of recognition of Israel and acceptance of certain U.N. resolutions. Our position has been spelled out and there's no change on that, and as far as our recognition of Mr. Arafat is concerned, he would have to meet those conditions.

WOODRUFF: In Nicaragua tonight there are reports of the death of an American churchman, Bishop Salvador Schlaefer was reportedly leading some 2,500 Moskito Indians from an area of fighting in Nicaragua to safety in Honduras.The Sandinista government says that Bishop Schlaefer was kidnapped and killed by anti-government guerrillas known as Contras. In Washington a senior U.S. official said that he received information confirming Schlaefer's death, but said that there was no evidence that the churchman had been killed by the Contras. Bishop Schlaefer comes from Campbell's Port, Wisconsin. He has lived in Nicaragua for the past 38 years.

Robin?

MacNEIL: The Reagan administration today forecast the shape of the economy in 1984 -- if they're right, the economy that would help determine Mr. Reagan's re-election chances. The predictions were signed by Treasury Secretary Donald Regan, Budget Director David Stockman and Chief Economic Adviser Martin Feldstein, and were prepared in planning next year's budget. Here are their forecasts: economic growth at 4.5%, about the same as currently projected for this quarter. Unemployment at 7.8% next year. It was at 8.4% last month. Inflation is projected to rise to 5% in 1984; it's now running at about 4%.

However solid the economic recovery, the Washington debate continues about how many Americans are hungry. Today, Democratic Senator Edward Kennedy announced his own findings in a public challenge to White House Counselor Edwin Meese. Kennedy spent a week in November looking at evidence of hunger in five cities. Today he issued a report and called for an increased federal effort.

Sen. EDWARD KENNEDY (D) Massachusetts: Throughout the past year of this so-called recovery, many of us in the Congress have been particularly troubled by the widespread reports of persistent malnutrition. White House Counselor Ed Meese does not believe that there is hunger in America. Let him go where I went, to the bread lines in Minneapolis, to the hollows of southeastern Kentucky, and wherever he goes he will find what I found and what every other study has found. The facts about hunger are not anecdotal, but overwhelming. At this Christmas season there is clear, undeniable and authoritative evidence of widespread and increasing hunger in America. After years of slow but steady progress, the momentum has shifted against us and the enemy is advancing. The 16 steps I recommed in this report will cost approximately $2.5 billion a year, or only 1/20th of the $50-billion increase the Defense Department is seeking for military spending in the next year alone. Presumably that increase is supposed to advance the national defense, but surely the defense of this nation includes the health of our families as much as the size of our bombs.

MacNEIL: Kennedy's proposals include an increase in food stamps and child nutrition programs, reestablishment of the Senate Select Committee on Nutrition, and establishment of an independent national commission on nutrition.

Judy? GM-Toyota Deal

WOODRUFF: In what could be a landmark decision for the automobile industry, the Federal Trade Commission today paved the way for two of the world's biggest automakers to build cars together. The three-to-two decision, once finally approved, will permit General Motors and Toyota to become 50-50 partners in making a new subcompact. It would be the first collaboration between American and Japanese auto manufacturers to build cars in this country.Starting next year the joint venture would produce 200,000 new cars at a GM plant in Fremont, California. The agreement would last 12 years and employ 12,000 workers, three-fourths of them in related supplier and service industries around the country. At a news conference this afternoon the chairman of the Federal Trade Commission, James Miller, explained why the GM-Toyota agreement benefits both the U.S. auto industry and consumers.

JAMES MILLER, chairman, Federal Trade Commission: It means that 200,000 small automobiles would be available to the American public that we do not see foreseeable in otherwise, and this will have the effect of depressing the prices of small cars and even of large cars, and there'll be a greater variety of automobiles available to the American consumers. And, secondly, these cars will be produced at the lowest real cost, and thirdly, General Motors, an American company, will obtain knowledge of Japanese production techniques and we will see an experiment of an American company and the United Auto Workers, who have entered this as well, this joint venture, and see if that, the Japanese system, can be adapted to the American system.

MacNEIL: As we will hear, this agreement has produced a lot of controversy. We start examining its implications with Bill Usery, former labor secretary and director of the Federal Mediation and Conciliation Service. Mr. Usery is now a consultant working for both GM and Toyota. Mr. Usery, what happens right now? When will the first cars be produced?

BILL USERY: Well, Robin, we still hope that we can produce cars in this calendar year. Certainly we hope to be in production by the middle of the following year. Any delay or the delays that we have had obviously pushes the schedules downstream, but we're certainly still hopeful of having cars on the line before this year's end.

MacNEIL: Why is this such a good deal for General Motors?

Mr. USERY: Well, I think it's a good deal for America, including General Motors. General Motors, although our number-one car producer in the United States, is not the number-one subcompact producer. Ford is the number-one subcompact producer. General Motors has, by its own admission, has never been able to really build a good subcompact car that's been sellable in the United States. It gives General Motors and American labor an opportunity to view and to observe Japanese methods of building cars, and all of us know, according to the Department of Transportation, that there is about a $1,500 cost advantage that the Japanese have over Americans building cars. And so we think it's a wonderful opportunity for us to learn, learn new techniques. We think it's also an opportunity in California, where at one time we had five assembly plants -- we now have one -- to reopen this plant in Fremont and hopefully regain a large part of the auto sales in California. As we all know now, auto sales in California, imports have the high percentage of it. So I think it's a wonderful opportunity for everyone concerned.

MacNEIL: What is it going to do the rest of the American auto industry?

Mr. USERY: Well, I think it also will help the American auto industry. Just a little over a year ago we were all suffering in the auto industry. Each of us. And the American people and the world alike was buying Japanese cars and foreign-made cars. It gives an opportunity to view and to observe, as I say, these methods of producing cars, quality cars, at less cost than we would have been able to produce them before, and, I said earlier, provides the American people with 200,000 more cars that we will have in America, that the consumer can purchase. And I think it helps competition overall.

MacNEIL: And what's the advantage to the consumer?

Mr. USERY: The advantage to the consumer is a quality built, efficient car that can be built at a less cost, which is good for competition and good for the American consumer. It also gives the American consumer a wider choice by having an additional car that we do not presently have in the market here in the United States.

MacNEIL: Now, you're also a consultant to the other side of the deal, Toyota. Why does Toyota think this is a good idea?

Mr. USERY: Well, Toyota, for many years, have been a large supplier of automobiles in the United States. We have been importing many Toyotas. It gives Toyota an opportunity firsthand to observe American labor and also gives them an opportunity to begin to produce in America where we want jobs and to try to get jobs into America. It gives them an opportunity to see that American workers can produce cars efficiently and effectively as the people in Japan. I think it offers them a learning process for America and what America is all about in producing cars.

MacNEIL: And it also offers them a way around the voluntary limitations on exporting cars to the United States.

Mr. USERY: Well, I don't see it in that light. Certainly it gives them an opportunity to produce another car here, and of course I think we have to keep in mind that we're building just one module or one type of car over the period of 12 years. It is a limited lifefor one type of automobile, to give everyone an opportunity to learn and to understand each other, both the Japanese -- I think we can learn more about the Japanese and the Japanese can learn more about us, and I think overall it's good for our entire Japanese-American relationship in the auto industry.

MacNEIL: Well, thank you. Judy?

WOODRUFF: Not everyone is as pleased as Mr. Usery at today's decision by the FTC. Chrysler Chairman Lee Iacocca accused the commission of looking the other way and allowing two industrial giants to merge without a public hearing. To explain why Chrysler and the other domestic automakers object so strenuously to today's decision we have Joseph Califano, a Washington attorney who worked as a legal counsel for Chrysler in these proceedings, and who sits on the Chrysler board of directors. Mr. Califano, why is Chrysler, why are you so opposed?

JOSEPH CALIFANO: Well, number one, we believe the agreement is clearly illegal, as 90% of the antitrust lawyers in this country seem to agree, because it permits the combination of the two strongest automobile companies in the world and the number-one and number-three automobile companies in this country. To get a sense of how big that deal is, just imagine if you permitted Chrysler and Honda and Ford and Datsun and Volvo and Fiat and virtually every other automobile maker in the United States to combine and produce a car. This is a bigger deal than that, and putting all of them together.

WOODRUFF: Well, now how specifically is that going to hurt Chrysler?

Mr. CALIFANO: Well, it's going to hurt Chrysler, it's going to hurt the American people and it's going to hurt the American workers. One, this will -- this takes the price leaders and gives them the power to manipulate the price of subcompacts, which gives them the power to drive other companies out of the market in the short run and manipulate the price of their other cars to their own benefit. Two, the decision today by these three commissioners is basically a pink slip for 12,000 American autoworkers, and over the life of this agreement, with the ripple effect it will have on suppliers and others, we believe that it's going to cost the United States 300,000 jobs.

WOODRUFF: Well, now how --

Mr. CALIFANO: Toyota is going to make 60% of this car in Japan, according to the opinion of Commissioner Pertschuk; by the admission of one of the other commissioners, it's 50%.

WOODRUFF: Well, now, as you know, the other side is saying that they are going to be producing, creating, 12,000 new jobs in this country. Where do you get the 300,000?

Mr. CALIFANO: The 300,000 jobs are over the life of this, but 12,000 jobs, just take this deal this year. Twelve thousand jobs in the United States, that's 40% of the jobs. The other jobs are in Japan. Toyota could do exactly what Honda has done; it could come to the United States and build a car itself. It could do what Datsun has done; it could invest $600 million in the United States and build a car and employ American workers.

WOODRUFF: Well, what about --

Mr. CALIFANO: Also, there's a sense the FTC, in its proposed consent order today, does two things. It says we're worried a little bit about how much they'll talk to each other, these two giants, so we want them to report and keep memoranda and talk only about this car, not talk about anything else. Well, that's nonsense. I mean, that's like taking, you know, a virile young man and a beautiful young woman and putting them in bed together and saying, "You can kiss each other, you can caress, you can fondle a little bit, but you can't go all the way." It's nonsense. We have created an enormous problem in violation of our antitrust laws.

WOODRUFF: It's curious in a way that Chrysler is opposing this joint venture because it is Chrysler, after all, that's been the biggest importer of Japanese cars through its agreement with Mitsubishi.

Mr. CALIFANO: Chrysler is a little guy. We're a little kid on the street. We are importing a car for Mitsubishi. We are not one of the two strongest automobile manufacturers in the world. Together, Toyota and General Motors control 51% of the U.S. automobile market. They add another 250,000 cars to that as far as GM is concerned and there isn't even a lid on that because there's a loophole large enough for John Riggins to walk through, not run through, in this agreement. It permits any number of cars just like this to be made to be sold to Toyota dealers in this country.

WOODRUFF: All right, thank you. Robin?

MacNEIL: Now a detached view from David Healy, who has been tracking the auto industry for the past 12 years. Mr. Healy is a vice president and auto industry analyst with the Wall Street firm of Drexel Burnham and Lambert. Mr. Healy, what do you think the impact of this venture will be on U.S. automakers?

DAVID HEALY: Well, first of all, Robin, it's going to make life more complicated, as Mr. Califano said, for Chrysler and for Ford. The overall background, the reason that General Motors is doing this joint venture, is the fact that no one right now can make money producing an economy car in the United States.

MacNEIL: Not just General Motors, but no one else, you mean?

Mr. HEALY: General Motors is losing money on their Chevette; Chrysler is losing money on their Omni and Horizon; Ford is losing money on its Escort. They didn't plan it that way, but that's the way it has worked out because costs are too high and competition is too severe on the bottom end of the market. So General Motors has a particular problem that their Chevette model, their economy car, is now eight years old; it's obsolete. It's been on the market for a long time. It's come time to replace it with a new car. General Motors would probably have to spend $2 billion on developing a new car in the United States, and that would be a loss for them. They would lose money on that car. So General Motors has adopted a Japanese strategy of filling the gap at the bottom end of the line to bring in Japanese cars or to establish this joint venture with Toyota. I think over time, when the time comes for Chrysler to replace the Ommi Horizon and for Ford to replace its Escort, they will also be forced to do the same thing. So what we're seeing, really, is not an anticompetitive kind of agreement. What is really happening is that there is going to be increased competition in the bottom of the market for cars when the GM and Toyota joint venture comes onstream.

MacNEIL: Are you saying what Mr. Califano's complaining about tonight his company's going to be doing a couple of years down the line?

Mr. HEALY: Sure. Ford, of course, danced around with Toyota themselves negotiating about a possible joint venture for a couple of years until it finally fell through on a bunch of unrelated problems, and Chrysler of course, as was pointed out, is bringing in themselves 140,000 cars and trucks from Japan. They're one of the major importers from Japan. And this is why all of the companies are either doing it or looking at it. There is just no financial return right now in building cars, small cars, in the U.S.

MacNEIL: In the politics of restraining the flow of Japanese cars to compete with American-made cars here, with all the alternatives that are available to the administration, where does this decision fit -- the decision, proposed decision of the FTC to permit this venture?

Mr. HEALY: Actually, Robin, there's something in it for both General Motors and Toyota. GM gets a new small car without a major investment, a car on which they can probably make a little money, and Toyota gets into the American market by becoming a manufacturer with a relatively small investment. They are adopting an idle plant in California; they are probably going to use designs and tools that they've already spent money developing on in Japan. And so, let's face it. Toyota is building cars in the United States in this joint venture for political reasons. If it were just dollars and cents economics, it would make a lot more sense for them to continue exporting cars from Japan.

MacNEIL: Well, explain to me the political reasons. Spell that out for me.

Mr. HEALY: Well, Toyota is limited on the number of cars they can ship here, with the so-called voluntary agreements. Toyota would like to have that quota maintained or perhaps even increased. So if they appear to be good citizens by getting into a joint venture to build cars in the United States, employ American labor, then they can hope that their quota from exports from Japan, where they make the real money, will be either maintained or increased. So essentially they are getting into the American automobile business for political reasons.

MacNEIL: Toyota thinks if Toyota's good for General Motors, it's good for the United States? Is that it?

Mr. HEALY: to slightly recoin a rephrase.

MacNEIL: Thank you. Judy?

WOODRUFF: Mr. Usery, let me get back to a point that Mr. Califano made, and that is that instead of creating a lot of jobs this is going to cost a couple of hundred-thousand jobs over the next few years.

Mr. USERY: Well, of course, obviously I would disagree with Mr. Califano.As you have stated it, we know that it'll create 12,000 jobs and probably additional jobs beyond that. There is no fact that it will cost any jobs for American people, and as it was just stated, we have 100,000 cars being brought in by Chrysler every year from Japan and 150,000 engines from Japan, so it's an ongoing relationship we have in international competition and international trade. And obviously there's no one any more concerned about keeping jobs in America and bringing jobs to America than I am and working for jobs.

WOODRUFF: But how do you keep a giant merger, again, as Mr. Califano described it, from being anti-competitive, from making the system even more monopolistic?

Mr. USERY: But this is not a merger. This is a joint venture by two companies by build one automobile for the life of 12 years at 200,000 cars a year, and that is what the consent went to today. That's all they can do is build those 200,000 cars or thereabouts. And utilizing this factor and providing the jobs to the people who are laid off in that plant is certainly giving Americans jobs.

WOODRUFF: All right, Mr. Califano?

Mr. CALIFANO: Well, I would like to comment. One, it is not -- 12 years in the automobile business is three generations of cars. That's enough to wipe out several automobile companies and create even greater concentration in our markets. Number two, I would underline one thing here. This has all been done in secrecy. This has been done in star chamber, if you will. We have only seen a portion of the memorandum of understanding between the two companies. We have not seen the pricing formula. That's been kept secret even though the general counsel of the Federal Trade Commission told us in a meeting last week that there was nothing confidential about the memorandum of understanding. There are yards high of documents which the FTC has reviewed; Chrysler now, and the other automobile companies, has been permitted to look at documents about that thick. The reason -- it seems to me that one of the reasons the FTC is keeping all this material secret, one of the reasons GM is keeping all this material secret, one of the reasons Toyota is keeping it secret and has refused to let the FTC look at lots of its documents or even make copies of them is because the deal can't stand the light of day and be considered legal. It's an illegal --

WOODRUFF: Well, getting back --

Mr. CALIFANO: -- combination.

Mr. USERY: I disagree with Mr. Califano.

WOODRUFF: All right, Mr. Usery.

Mr. USERY: I don't believe -- and he and I both have had the honor and privilege to serve in the U.S. government. I believe the Federal Trade Commission, over eight months, with 15 economists and 10 lawyers working full time, and almost unanimously, with what I understand, accept overwhelmingly, recommended that this project go forward, and I don't think it's been in secrecy. I really do not believe that at all. I think it's been very open. They've taken depositions from Chrysler, from Ford, from General Motors, from all the auto companies, all interested people. I think it's been a very open way. In fact, I don't believe any agency has gone any further to try to investigate than the FTC has in this matter.

WOODRUFF: Mr. Califano, let me ask you about a point Mr. Healy made, and that is that after all, in a few years Chrysler itself is going to be engaging in this very sort of joint venture.

Mr. CALIFANO: Let me say something. In time, years from now, smaller automobile companies may form joint ventures. That of course is true. That's why it's going to cost, if we go this route -- the Japanese strategy -- I mean, that GM is giving 300,000 jobs to the Japanese people that should be American jobs. Now, that's a decision GM made. We think it's an unfortunate decision, and when I say 300,000 jobs, I'm saying I think that's going to happen because other companies will be forced to do things like this.

WOODRUFF: Mr. Healy, do you agree with Mr. Califano's figures?

Mr. HEALY: No. I think they're pretty imaginary. What you're really looking at is that GM has the alternative of, at some point, discontinuing the Chevette, which is their existing small car. What comes up as a replacement for the Chevette I think is a choice of half a loaf or no loaf at all. With the joint-venture car in California certainly about half of it will be built up of Japanese parts, but the alternative to denying the joint venture would be a total Japanese or import strategy. General Motors has already canceled their plans to build and develop a new small car on their own in the United States, the plan that was canceled a couple of years

Mr. CALIFANO: If I may comment, Mr. Healy, I think there is another alternative, and that is for Toyota to do what Honda has done and what Nissan has done, and build a car in this country with American workers. And, incidentally -- [crosstalk]

WOODRUFF: Is that an alternative, Mr. Usery?

Mr. USERY: I think that just this past week an announcement was made by General Motors and the UAW that they were working together to develop new ideas and labor relations procedures that they could build a subcompact car in America. I think General Motors plans are to build one.Certainly if we can learn and understand the techniques and can build a better car by learning from the Japanese, that's what we should be doing in America.

Mr. HEALY: I think you also ought to --

Mr. USERY: Let me just, on that, if I may -- and I note that Mr. Healy did agree with my last comment. I'd also note one other thing. The chairman of the board of General Motors only two days ago said that he had all the know-how, he had all the ability to make this small car. Now, he's got a -- he's getting it both ways. He's having his cake and eating it, and walking away from the table full.

WOODRUFF: All right, Mr. Healy, I want to get back to you for a comment and also ask you, does this mean that the United States simply isn't capable of building its own inexpensive subcompact?

Mr. HEALY: The economics in the auto business right now don't permit a U.S. company to make money developing and producing an economy car in the United States. That is because the costs are too high -- the $45,000-a-year cost of an autoworker and the capital cost involved are simply too high. And I think we ought to keep this joint venture in perspective. We are talking here about 200,000 cars. The -- and we're not talking about monopoly --

Mr. CALIFANO: Excuse me, we are talking about 250,000 cars.

WOODRUFF: Do you mind letting him finish?

Mr. CALIFANO: -- according to the agreement that was released today.

Mr. HEALY: Whether it's 200- or 250,000, you're not talking about the demise of automobile companies, you're talking about a car that will account for perhaps two or three percent of the automobiles that are produced in the United States, and it will involve a relatively minor amount of additional competition for the -- for Ford and Chrysler who are making most of their monty, all of their money, as a matter of fact -- in different areas of the business.

WOODRUFF: All right, thank you, Mr. Healy. And I'm sorry we don't have more time, Mr. Usery and Mr. Califano. Thanks to all of you. Robin?

MacNEIL: Besides cars, cameras and TV sets, the Japanese are also becoming hotly competitive in computers, and they are paying more and more attention to the development of manpower to operate them. In some Japanese schools, computer training now begins in kindergarten. Brian Hanrahan of the BBC tells the story.

BRIAN HANRAHAN, BBC [voice-over]: In a sprawling city like Tokyo, even the four-year-olds commute to school. The kindergartens which take three-, four- and five-year-olds are the places where the pressure to get ahead really starts. So a place in a good school is greatly prized and worth traveling for. A few of the kindergartens have even introduced computers to pupils who are hardly out of their cots. Even before they can read and write properly they're learning how to operate a keyboard. Not that they have any difficulty. Their teacher says they've all got TV games at home, so they regard all the buttons as the most natural thing in the world. The computer sets problems and plays a triumphant little ditty if they get the right answer. Despite the childish trimmings, they're suddenly into a very adult world of intense concentration, and if they get it wrong there's a more downbeat tune. The computers are intended to speed up their learning. By the time they leave kindergarten they'il know the 72 letters of the Japanese alphabet as well as basic addition and subtraction. And they'll be ready to sit their first exam at the age of six.

MacNEIL: That was not advanced computerese they were speaking; it's Japanese for "good morning."

We'll be back in a moment.

[Video postcard -- Encinitas, California]

MacNEIL: For the sixth straight day a large part of the nation was coping with ice, snow and lethally cold air. The combined effects were blamed for a total of 72 deaths. On the first official day of winter, the Northeast was awash in freezing rain and snow.Ice and new snow continued to disrupt air and road traffic in Texas. The Texas storm traveled northeast, dumping heavy snow in the Midwest. In 33 cities the temperatures tied or broke low records for this date, the coldest place being Butte, Montana, where it was 43 below zero. Even Florida had a taste of winter; the air was cold enough to make fog. According to the Associated Press, the weather produced two memorable quotes. A service station worker in Denver said, "Everyone and his car is broke," and a Baltimore policeman said, "We got more accidents than we have police."

Judy?

WOODRUFF: After six years of litigation, the Tennessee Valley Authority and the Gulf Oil Corporation have reached an out-of-court settlement. The TVA had sued, charging Gulf with conspiring with other companies to raise the price of uranium sold to the TVA's nuclear power plants. The price rose from $7 a pound in 1972 to $41 a pound in 1977. Among other things, the settlement requires Gulf to pay the TVA $13 million in legal fees and to take back more than a million pounds of uranium which the TVA had been obligated to buy. And it requires Gulf to establish a $30-million fund which would develop resources in the seven TVA states with Gulf and the TVA sharing the profits.

A controversial ruling on children's TV programs today. The Federal Communications Commission ruled that commercial television stations cannot be required to air a certain amount of children's programming every day.As FCC decisions go, this one was certain to generate opposition, and Kwame Holman has discovered it already has. Kwame? FCC & Kids' TV

KWAME HOLMAN: Judy, the argument has been over regulation. Will television stations ignore the needs of children unless the government forces them not to? The FCC has debated that question for four years now, and today the conservative majority of the commission's members, who were appointed by President Reagan, came down on the side of less regulation.

Old guidelines that required educational shows, shows for particular age groups and prohibited the bunching of children's programs on Saturday morning time slots have been scrapped in favor of a general requirement that broadcasters serve the needs of children. The lone voice of dissent of the looser requirements was Commissioner Henry Rivera.

HENRY M. RIVERA, Federal Communications Commission: Mr. Chairman, this reminds me of the fairy tale about the emperor's clothes and, fittingly, if you'll remember the fairy tale, it was a child who said the emperor has no clothes.The commission has no policy statement, Mr. Chairman. This is a sad day for children in this country.

HOLMAN [voice-over]: Commissioner Rivera says the new policy is no policy at all because it would allow broadcasters to substitute so-called family programming for TV shows aimed specifically at children.

Comm. RIVERA: New, this document, as I understand it, would say that there is really no such thing that they could meet this obligation by airing family-oriented programming which was not designed-- need not be designed to meet the special needs of children. Is that right?

WILLIAM JOHNSON, FCC staff: I think we would look initially to see what they've done with respect to the defined category of children's programming, and then if they were serving the needs of that audience through programming which was useful to children, but which also attracted a larger audience, that would satisfy the obligation.

HOLMAN [voice-over]: Commission Chairman Mark Fowler, speaking for the commission majority, agreed with the staff recommendation that family-oriented programming

MARK S. FOWLER, chairman, Federal Communications Commission: New, I reject the idea that it has to be initially designed to meet the needs of children in order to be able to meet the needs of children. I guess that's the policy.

Comm. RIVERA: Okay. I'm just trying to find out how a broadcaster complies with the duty as you just articulated it.

Chrm. FOWLER: He has great flexibility and we want to leave that flexibility, as the framers of the act intended it to be, in the hands of the licensee. After all, that licensee is best able to react to the needs of the audience it serves, including children, and to try to micro-manage that, I think, would be a great mistake.

HOLMAN [voice-over]: Fowler says further regulation of the industry might violate broadcasters' First Amendment rights by calling for quotas of children's shows.

Chrm. FOWLER: Absent having mandatory standards or, as you say, flexible processing guidelines or quotas or whatever you want to call it, what we've done is say the broadcaster has a positive, affirmative duty. He may not shirk it; he may not disown it; he may not attempt to explain it away at renewal time. He must demonstrate at renewal time that he has, in his programming, treated specialized needs of the child audience.

Comm. RIVERA: The vestigial duty retained by the FCC is hollow to the core. The majority justifies this policy shift on the ground that between commercial, non-commercial and cable television, children's needs are being adequately served. But the most authoritative study of children's programming on commercial television in this proceeding shows that broadcasters have not lived up to their obligations under the children's television policy statement. There is no reason to think that their performance will improve absent FCC requirements.

HOLMAN [voice-over]: After the meeting an advocate for children's television told reporters that the commission's fear of violating broadcasters' First Amendment rights through program quotas is not valid.

PEGGY CHARREN, Action for Children's Television: I feel that if you were going to worry about the First Amendment with a quota, the place to worry about it is news and public affairs, and we have had in place at this commission for years a guideline, a processing guideline, that says you have to do 5% of your programming, local programming, and 5% news and public affairs. This guideline has caused no problem. It is still in place, although that is a kind of guideline that deregulation should mean you can do away with. The marketplace now works for news; it didn't when that guideline was put in place. What we're suggesting is do exactly the same thing for children. In fact you could do it in the same language.

HOLMAN: The National Association of Broadcasters supported today's four-to-one commission decision. They said the U.S. is entering an age of TV abundance, and federally-mandated programming isn't necessary. But the battle over standardsfor children's television is not over. Ms. Charren promises a two-pronged challenge to the commission decision -- a court battle and a bid for new congressional action.

Robin?

MacNEIL: Today NASA did one of those amazing space tricks we've become rather blase about.They have a small spacecraft known as the international sun-earth explorer headed for a rendezvous with a comet 44 million miles away on September 11th, 1985. To give the needed boost, NASA scientists today sent it to within only 72 miles of the moon's surface, the closest fly-by ever attempted. The moon's strong gravitational force was used as a slingshot to send the craft on its way to conduct scientific experiments with the comet, Giacobbi Zimmer. Meanwhile, the Reagan administration has been considering a space project, a new one, as ambitious as the Apollo moon landings -- putting a permanent manned space station in orbit. But as Charlayne Hunter-Gault tell us, the competition is already well ahead. Charlayne? Soviets on Mars?

CHARLAYNE HUNTER-GAULT: The Soviet Union is going full speed ahead with plans that could create Soviet colonies on planets as far away as the moon and Mars. The Soviets are about to take the first step toward reaching this goal by building a permanent space station. This information comes by way of a new study released today by the Congressional Office of Technology Assessment. It says that the Soviets take quite seriously the possibility that large numbers of their citizens will one day live in space. For more than 12 years Soviet cosmonauts have been experimenting with living in space for extended periods of up to five months aboard a series of Salyut space stations. Today's report says that the Soviet cosmonauts have logged more than three times the hours in space of their American counterparts. President Reagan is expected to announce within weeks his decision on whether to fund a $7-to $9-billion space station that would be launched into orbit by 1991.

For more details on all of this we have the person who in 1963 received the first U.S. patent for a manned space station design. He is Saunders Kramer, who has also been keeping a close eye on the Soviet space program for more than 25 years and contributed to today's report. Mr. Kramer, how new and how surprising is the information contained in this report?

SAUNDERS KRAMER: I don't really find nothing new in the report in general. There is a paper submitted through the auspices of the Soviet Embassy by a Dr. Galeyev Balyon, who is the vice chairman of the Intercosmos Council in the Soviet Union, which describes the Salyut space station in greater detail than I have been privileged to see before this. But the rest of the report is really a detailed collection of lots of information that has been available to the general public if they took the time to peruse magazines, The New York Times, other parts of the press, Aviation Week, and translations of Soviet data.

HUNTER-GAULT: Well, what's important about it?

Mr. KRAMER: The report is to be made available to the general public and of course to people in the space community, and it points out in one place the goals and ambitions of the Soviet Union, which have been in place for quite some time.

HUNTER-GAULT: Are they that different from those of the United States?

Mr. KRAMER: I think they are.If there is any one word to describe the Soviet Union's efforts in space, it's perseverance. Throughout all of their efforts and despite various failures at various times, even including the loss of some of their cosmonauts in space, they have not deviated from a goal that they have stated a long time ago of a permanent presence in space.

HUNTER-GAULT: Well, how soon are they likely to have one?

Mr. KRAMER: Well, I have a number of sources, and in fact articles have appeared in the open press, which say that there's a very large booster, even larger than our Saturn 5 booster, sitting on a pad at Turittom[?] right now. It's my suspicion that that particular booster contains at least the first elements of a very large space station.

HUNTER-GAULT: So are we talking about months or years or decades or centuries?

Mr. KRAMER: I would say that kind of a program ought to be initiated in something less than a year unless that booster fails. Now, the Soviets have tried in the past to launch a very large booster and have had three attempts, three failures -- no successes. It all hinges on the success of this booster.

HUNTER-GAULT: What about the idea of sending whole colonies of people into space? Is that something that's likely to happen any time soon?

Mr. KRAMER: No, it is not. That is in the realm of fantasy, and should be viewed as such by anybody at all.

HUNTER-GAULT: Well, in terms of getting this space station, though, actually into space, you do -- that is within the realm of the near possible --

Mr. KRAMER: Oh, quite probable. "Possible" is the sort of expression that one uses to say "maybe," and I don't think the word maybe is appropriate in this particular case. It's positively, rather, a matter of the success with this large booster and when. And I do expect within the next year to see the first elements of that station show themselves in orbit.

HUNTER-GAULT: Well, with this kind of perseverance, which I get by implication you were saying before the United States doesn't have -- you can correct me if I'm wrong, but does that mean that their space program is superior to ours technologically or any other way?

Mr. KRAMER: We have two different sets of goals. People who try to make comparisons between both of our programs are really on the wrong track. The Soviet Union can be noted in this particular case for its perseverance. Its options are very, very sharply defined. They have spoken of, but certainly not given dates for a large station, for landing on the moon and establishing a base there --

HUNTER-GAULT: Why would they want to do that?

Mr. KRAMER: Scientific research, the prestige. Soviets look at the image of their country with great importance. They have an enormous ego. And it's certainly at least as big as the ego of that of the United States.

HUNTER-GAULT: Well, is there any military application or --

Mr. KRAMER: Not on the moon. I could hardly think so.

HUNTER-GAULT: Well, why do you think the United States is still debating such a project rather than going ahead and committing?

Mr. KRAMER: Our Congress allots money essentially during the time that a particular group of congressmen are in their elected office. And they are very reluctant to make contributions to a long-range space program.

HUNTER-GAULT: But how can the Soviets do it? I mean, the $9-to $10-billion estimates for these space stations, I mean, considering the condition of the Soviet economy, how can they make commitments of that kind of resource if we can't?

Mr. KRAMER: The Soviet leaders, I think, look at their image as a good deal more important in the eyes of the planet than making all these consumer goods available to the general public. And it's tradeoff which in their particular political system their leaders can make with little or no interference, and they have made that. And I might add that, incidentally, $9 to $10 billion is just barely a beginning, for them or for us.

HUNTER-GAULT: Well, do you think that in this particular regard the United States can catch up, and is it desirable that it do so?

Mr. KRAMER: It isn't -- again, it isn't a matter of catching up. Our program has been done in fits and starts, but we have done some marvelous things. I call to your attention the landing on the moon; the landing on Mars of the Viking program, which was enormously successful, even if it did leave some questions unanswered; the Voyager spacecraft and now the shuttle. However, the shuttle has to have somewhere to go, and we certainly need a POE in orbit. POE, port of embarkation -- a place to bring spacecraft, to assemble them, to check them out and to send them on their merry way, to the Moon, to other earth orbits, to geosynchronous orbit and someday, surely, to Mars.

HUNTER-GAULT: So in other words, you're saying that our program needs a much greater direction?

Mr. KRAMER: It certainly does.

HUNTER-GAULT: All right --

Mr. KRAMER: It needs a long-range direction.

HUNTER-GAULT: Thank you, Mr. Kramer. Robin?

MacNEIL: Here's our nightly recap of the top stories.

In a late development, Jordan ends its five-year-old boycott of trade with Egypt, and Egyptian President Hosni Mubarak gives Yasir Arafat a warm welcome in Cairo.

Islamic terrorists warn American troops to get out of Lebanon in 10 days or "the earth will shake under their feet."

President Reagan's economists project a rosy economic picture for 1984.

The federal government gives General Motors and Toyota a green light for a controversial joint production venture.

Judy?

WOODRUFF: And, finally tonight, a really unusual event: the Pentagon held a fashion show today. Last week a Congressman criticized the Army's new camouflage uniforms as being too heavy for the tropics based on experience in Grenada. But the Army has already bought 6 1/2 million of them, so they called a special news briefing today to defend their purchases. Brigadier General Jimmy Ross called it a good uniform and he explained why.

Gen. JIMMY ROSS, U.S. Army: It is designed for the temperate area. All along, from the very beginning. This is designed for the northern United States and the European environment. If the soldier went this morning he would wear this uniform. You notice that this has been washed and tumble dried, not pressed. No starch there to inhibit any of the breathability of the uniform itself. In the hip area, in the crotch, I know from wearing the uniform for over a year it's awful tight. It does make you feel trim, but I'll tell you, it's tight. And so we've added more room in the crotch area, and for soldiers who work that's very important.

This second uniform, this is going to be our uniform for the future. Notice that we've gone to a smaller collar; that's for appearance. We're trying to make the soldier look sharper, and I'll tell you, in the last two years we've had this in the field we've come up with a lot of things that we want to correct on it, so we're trying to correct those. So a smaller collar; we moved the button up where it's a little bit higher so a neater appearance there. Put the slants -- and notice that the bellow now is on the outside. There has been a concern that we all look baggy. Now, soldiers who work in the field and they're on exercises; they feel very comfortable. But when they're in garrison, this little tab, which will cinch up about an inch and a half on each side will give you a more military look than the old style.

You notice that we built in these, a seat patch, to eliminate the tears and rips in the back end. Now, it may sound funny, but in Vietnam we shipped tons and tons of uniforms. I often wondered if we shouldn't have been shipping ammunition or medical supplies or something else. This is far more durable uniform. Our textile engineers tell us this uniform should last at least two years.

WOODRUFF: Responding to criticism about uniforms from troops, General Ross said the new designs would give a more military look. According to an Army survey, many soldiers thought their battle dress was sloppy looking.

Good night, Robin.

Mac NEIL: Good night, Judy. That's the NewsHour tonight. We will be back with another tomorrow night. I'm Robert MacNeil. Good night.