The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Wednesday, the U.S. trade deficit narrowed sharply during the 3rd quarter, Bulgaria's Communist Party renounced its monopoly on power, South Africa's jailed black nationalist leader, Nelson Mandela, discussed political change with Pres. F. W. DeKlerk. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, we look at the downturn in U.S. auto sales with analyst Maryann Keller, Ford Motor official Joel Pitcoff and dealer Jimmy Payton. The comes an update from Hong Kong on the Vietnam boat people, a Tom Bearden report on the problems of painkillers. And we close with a Roger Mudd comparison of the House of the House of Commons to the House of Representatives. NEWS SUMMARY

MR. LEHRER: The U.S. trade deficit has gone down some more. The Commerce Department said today the so-called current account stood at $22.6 billion at the end of the 3rd quarter of this year. That is a 29 percent drop from the previous three month period. It is also the smallest imbalance since early 1984. Also the Commerce Dept. said retail sales rose .8 percent in November. The Associated Press said that signaled a much stronger economy than most economists had expected. Robin.

MR. MacNeil: The Soviet government said today it would not drop central controls or permit private property in tackling the nation's economic problems. An economic reform plan was presented to the National Congress by Soviet Premier Nikolai Rishkov. We have a report narrated by Louise Bates of Worldwide Television News.

MS. BATES: The reformers were in for some disappointing news as the congress of people's deputies discussed the country's economic future. Premier Nikolai Rishkov dashed hopes for further economic reforms and instead announced a 5 year plan based on exactly the same centrally planned criteria which has so far failed to rescue the Soviet economy. Radical suggestions of selling off state-owned industries and legalizing private property were dismissed as questionable by the premier. He said the people would reject such ideas. Claiming he was offering a reformed economic plan, Rishkov said more emphasis would now be placed on consumer goods, rather than heavy industry. Food and goods are in desperately short supply. The plan also includes provision for an Eastern Bloc common market to combat the economic power of the European common market. After Rishkov had finished, the deputies got up to speak. The conservatives gave the plan resounding support, while those who favored perestroika called for a more far reaching economic overhaul. The deputies are now accountable to their constituents for the first time in Soviet history, and they're expected to put pressure on Rishkov if the plan doesn't work.

MR. MacNeil: A group of Western nations today put together a $1 billion loan for Poland. It was announced at a meeting in Brussels of the foreign ministers of 24 Western nations including Sec. of State Baker. The U.S. said it was providing 200 million of the $1 billion loan. At the meeting, Poland presented an economic reform plan that would its economy away from socialism and closer to a free market system. The Western ministers also said they would respond positively to aid requests from other nations shedding Communism.

MR. LEHRER: And there was another promise to give up monopoly power today. The Communist Party of Bulgaria made the promise at a meeting of top party leaders. They also decided to expel from the party the country's former leader, Todar Zifkov and his son. Zifkov was replaced last month after 35 years in power. His son was a high level cultural official. Outside the Central Committee building, there was a big rally organized by the Communist Party. About 60,000 people participated. They changed their support for the new reforms. In Czechoslovakia, the new government spent the day drafting laws that would make the country more democratic. The laws would ensure freedom of religion. They would also make it tougher to put political protesters in jail.

MR. MacNeil: In South Africa today, Black Nationalist Leader Nelson Mandela was taken out of prison for a few hours to meet with the country's president, F.W. DeKlerk. We have a report from Capetown by Kevin Dunn of Independent Television News.

MR. DUNN: The meeting between Pres. F.W. DeKlerk and his most famous prisoner was according to the government requested by Mr. Mandela, himself. The reformist president readily agreed. And so Mr. Mandela was driven from Cape Town's presidential office. The government said the talks centered on black leaders' conditions for negotiations. But Mr. Mandela's colleagues emphasized he was not himself negotiating.

AHMED KATHRADA, ANC: I think that it would be just a courtesy call. I'm quite certain there will be no serious discussions. Mr. Mandela has made it very clear that he is a prisoner. A prisoner does not negotiate. The people who do negotiate would be the African National Congress and the government.

MR. DUNN: But political observers said Mr. Mandela was pulling the strings.

MARK SWILLING: He is the key maker. He is trying to put together the pieces in such a way that the climate for negotiation is created into which he will be released. He doesn't want to be released into a vacuum which is what we have at the moment.

MR. DUNN: Mr. Mandela's fellow leaders were released two months ago, but his freedom is one of their key conditions for talks with the government to start. Pres. DeKlerk made clear this month it's no longer a question of if Mr. Mandela will be released, but when.

MR. MacNeil: The government of El Salvador today released Jennifer Casolo, an American woman suspected of hiding arms for leftist rebels. Pres. Alfredo Cristiani said Casolo was freed because there was no proof she stored the weapons. The 28 year old Connecticut woman was turned over to the U.S. ambassador in San Salvador this afternoon. For the past four years she worked for a group that organizes tours in El Salvador for Americans.

MR. LEHRER: There was more fire today over the administration's policy toward China. Yesterday, White House spokesmen said a ban on satellite exports to China might be lifted. That followed the uproar over the weekend China trip by National Security Adviser Brent Scowcroft and Deputy Sec. of State Lawrence Eagleburger. Eagleburger canceled an appearance today before a House subcommittee. That prompted this exchange between Democratic and Republican members.

REP. SAM GEJDENSON, [D] CT: The Bush administration was willing to send Mr. Eagleburger 6,000 miles to apologize to the Chinese government, but it was not willing to send him two miles from Foggy Bottom to here to explain to the Congress and the American people why this apology was necessary in going to China. If there were a good reason for the trip, the President would have had no trouble letting his people appear before Congress to explain what went on.

REP. JIM LEACH, [R] Iowa: I do not know a soul that believes that the Scowcroft mission headed by a distinguished United States general went to Beijing to apologize to the Chinese leadership. And I think that the majority has overstated a case to such an extent that it undercuts some very reasonable concerns that the majority has.

MR. LEHRER: Pres. Bush will go to Colombia on Feb. 15th for a 4 nation drug summit. The President's intentions were announced at the White House today. The one day meeting will take place on Colombia's North coast. The region is known as a center for cocaine traffic.

MR. MacNeil: Thousands of Vietnamese boat people in the British colony of Hong Kong held demonstrations today to protest the decision to send them forcibly back to Vietnam. The protests were held in several detention centers where the Vietnamese refugees are locked up. More than 50,000 boat people are being held in the British colony. Hong Kong began deporting them two days ago. The refugees claim they will be persecuted if they are sent back. Hong Kong says they must be repatriated to deter more refugees from coming.

MR. LEHRER: The U.S. Navy successfully test launched another Trident 2 missile today. The test firing was from the nuclear submarine Tennessee 50 miles off the Atlantic Coast from Cape Canaveral, Florida. A Navy ship first had to warn anti-nuclear activists to leave the launch area. The Navy sideswiped a boat operated by the anti-nuclear Greenpeace Group that was trying to interfere with the launch nine days ago. This time the Navy enlisted the help of the Coast Guard to keep intruders away. At least five more Trident launchers are expected before the system is officially deployed next March. And that's it for the News Summary tonight. Now it's on to the drop in U.S. auto sales, the boat people of Hong Kong, painkiller problems, and comparing the House of Commons to the House of Representatives. FOCUS - SALES SLUMP

MR. MacNeil: First tonight the auto industry. There was more bad news for auto makers today with the report of big declines in sales for the first 10 days in September. Down 28 percent from last year. This continues a trend that began with the introduction of the new 1990 models in October and heightens speculation that the industry, particularly Detroit's Big Three faces longer term troubles. We'll look at the industries health after this backgrounder from Fred De Sam Lazaro of Public Station KTCA Minneapolis St. Paul.

MR. LAZARO: Overall, it will go down as the most profitable decade ever for domestic auto makers. But the 1980s are ending in some of the same pain with which they began. General Motors has indefinitely idled several factories. Chrysler has closed 2 plants, and Ford, the most profitable of the big three, has also been forced to layoffs and some temporary shut downs. Experts say in some respects the auto companies are being hurt by their own success. Cars today are built better than they were earlier in the decade so their owners feel less compelled to buy new ones as often as they have historically. Another big reason is that cars are more expensive.

PETER BROWN, Automotive News Magazine: People are getting long contracts on leases or on car loans so they can make the monthly payment. We discovered after 3 and 1/2 maybe you want to turn your car in and buy a new car and you go in and discover that you still owe $2800 on your car and it's only worth $1500.

MR. LAZARO: Peter Brown is Editor of the trade magazine Automotive News. He says demand for cars had already began to slacken by early 1989 but Detroit's response until just a few weeks ago he says was to continue production at virtually full tilt.

MR. BROWN: Month after month sales were below 1988 sales and month after month production was above 1988 production. And no body wanted to blink. Once you start cutting back production you are absolutely sure those are cars you are not going to sell. If you make the cars, you will sell them, so you want to keep making them and you will try to hold onto the market share. [TV COMMERCIAL]

MR. LAZARO: Manufacturers resorted to bigger and bigger incentives to lure buyers and to thin swelling inventories of 1989 models. The result dealers say is they lured in to 1989 models may buyers who might have normally waited for the S forcing rebates even on the new cars. [TV COMMERCIAL]

MR. BROWN: Rebates are going to be here for a long period of time again because I think the American buyer has become accustomed to it. And it's a hard thing to change an American buyer once we have gone to the grocery store and saw an item on sales or an automobile with a dealer incentive. If you just say no, there's not going to be any more, your buying public will probably turn completely off and say I will wait another 30 days and they are bound to come up with something. So I think that they are going to be there for a while. As to what extent or what forms that's the manufacturers situation and who knows.

MR. LAZARO: Most analysts say they expect car inventories will soon fall into line with demand as the economy continues fairly strong, they expect that demand will start to pick up sometime in 1990. The bigger concern for industry watchers is the long term outlook for Detroit. As they did at the start of 1980s Japan's car makers pose a threat to the Big Three in the 1990s. Only this time it's a much bigger one. Japan voluntarily limits its exports to the US to 2.3 million cars. Japanese companies produce an additional 1.2 million cars in North American factories. Together they account for almost 1/3 of all cars sold in the U.S. Csaba Cesere Director of testing for the magazine Car and Driver says on average Japanese cars are technologically more advanced and efficient. I an age of increasingly environmental regulation and higher milage requirement Csere says this capable. It is vital.

CSABA CSERE: People who have the a good grasp of technology and the ability to deliver technology at a low price are going to have an enormous advantage. When the government enacts new legislation that is going to tighten up emissions regulations and possibly tighten up fuel economy regulations and possibly tighten up fuel economy regulations and possibly tighten up CO2 emissions, because of greenhouse problems. This is going to make it much harder to design and build a car that is large that is roomy, that is quick that is fun to drive and at the same time meets all these laws. And technology is going to be a huge aid in doing this.

MR. LAZARO: That message seems to have gotten through at the Big Three although some analysts think that it reached Detroit much to late. Each company has ear marked billions more than it did in the 1980s for product development.

MR. GREENWALD: We are going to focus more on our car and truck business.

MR. LAZARO: At Chrysler, for example, Gerald Greenwald says the company is selling its aerospace and technology subsidiary. Chrysler is trying to raise research and development money for its car business which Greenwald acknowledges faces brutal competition in the 90s.

GERALD GREENWALD, Chrysler Corp.: If you look back 10 years in our business there was the Big Three and some imports and today in the U.S. market let alone the world market, the U.S. consumer has a choice 700 different models from 40 different companies.

MR. LAZARO: Some analysts believe that number is much too high and that some consolidation in the industry will be inevitable in the 1990s. Even those companies can survive on their own may have to collaborate with competitors. One telling symbol of this new era and of the Japanese role in it comes from Ford. The Ford Escort, single biggest selling automobile of the decade will redesigned for next year, redesigned by the Mazda Motor Company of Japan.

MR. MacNeil: Joining us now are Mary Ann Keller, An Auto Analyst of the New York Brokerage Firm of Furman Sells and author of a new book entitle Rude Awakening, which looks at General Motors in the 1980s. Gerald Pitcoff Research and Analysis Manager of the Ford Motor Company. he joins is from Public Station WTVS in Detroit.and Jimmy Payton, owner of a Ford Dealership in the Dallas Fort Worth Area. Mr. Payton is the former president of the National Automobile Dealers Association. he joins is from Public Station KERA in Dallas. Mr. Payton, how do you explain the current slump?

JIMMY PAYTON, Car Dealer: I think it is a combination of things. Number one we have saturated the market with some of the programs that we have been using for the last two or three years and we call it a mature market where there are fewer new young new buyers coming in and we are just having to live with that. And I think that the economy is also impacting out automobile sales for the last several months.

MR. MacNeil: Mr. Pitcoff, how does Ford explain the current slump?

JOEL PITCOFF, Ford Motor Co.: More than anything else the market today is characterized by a lack of urgency. In the 3rd quarter we had an unusual sales surge because of the anticipation of higher prices on their 1990 models in combination with unprecedented incentive levels. And that undoubtedly as your introductory piece explained pulled some business ahead and it brought incremental buyers in to the market or people who had been out of the market for a while because they were uncertain about whether they wanted to buy or not. So pay back is one of the principal factors.

MR. MacNeil: Pay back means what?

MR. PITCOFF: Essentially an offset for business that has been pulled ahead.

MR. MacNeil: I see.

MR. PITCOFF: So people who would have normally bought in the fourth quarter bought earlier primarily in the 3rd quarter.

MR. MacNeil: Ms. Keller do you think that is the chief explanation for this?

MARYANN KELLER, Auto Analyst: I think that all of the explanations that were offered were valid. I think that certainly pay back is what is causing the sales rate to today be under 6 million. And I would expect in the first quarter of next year it will get a little bit better but then we'll have to deal with a sluggish economy which probably means that the sales rate might only go back up to 6 and 1/2 and 6 and 1/2 is not going to be enough to put all these car plants back to work.

MR. MacNeil: So are you anticipating more layoffs or slower production than there has been in the Big Three?

MS. KELLER: Without any doubt. I mean, their early production forecasts for the first quarter have all of them building fewer cars and so this so stop-start phenomenon that we see where a plant gets shut down for a week or two for inventory adjustment is certainly going to continue. One of the things that is also plaguing the auto companies right now is a reluctance on the part of dealers to take additional cars. GM via a letter to its dealers this week indicated that it had orders for 24,000 chevrolets and that it was going to build 90,000 and there's a big difference here, and so there is a bit of a reluctance on the part of a dealer to take cars that he is not sure are going to sell.

MR. MacNeil: Is that true, Mr. Payton of you?

MR. PAYTON: Yes, it's very true of all dealers I think and I think that it is just bit more than a little reluctance. I think it's recognition of reality that you cannot continue to stock 90 or 120 day supply of cars and remain profitable. You need to stock fewer. Some dealers are trying to stock 45 days or 60 days. In our dealership, we are definitely trying to get out stock level to a 45 days supply.

MR. MacNeil: Because you have to pay for those, don't you?

MR. PAYTON: We have to pay for those and we have to then pay interest on those units if we do what we call floor plan them. If we borrow the money to pay the manufacturer.

MR. MacNeil: So is Ms. Keller right, Mr. Pitcoff, there are going to layoffs more off on production as you go in to the new year?

MR. PITCOFF: I certainly would expect during the first quarter. at least for us, there will be for us at least temporary layoffs, In fact our situation because of the way that we managed our capacity strategy if you will has actually been not as bad as some of our competition.

MR. MacNeil: Do you think, Ms. Keller, that these, the rebates and the $1000 back on the car or the very very low interest rates offered and the longer loans and everything. Do you think that they have sort of burned themselves out?

MS. KELLER: Well, what they've done is made people so convinced that they shouldn't buy a car unless they are being offered something like this. That they're sort of foolish to buy a car without it that they wait around. It used to be, and I remember being on the show years ago when they did the first 4.9 percent campaign. The kind of lines that swelled around car dealerships that people took advantage of this first time phenomenon and it pulled people forward. Now people wait until the next program and what you have is a situation where people simply don't buy unless they are being tantalized with something.

MR. MacNeil: Excuse me. Doesn't that contradict what you were saying, what everyone was saying earlier, that they're buying a quarter, three months earlier than they would have? Now you're saying they're waiting longer than they would have.

MS. KELLER: Well, they bought in the summer. They had the chance in the summer and the summertime incentives were actually twofold. Not only were they offering money, but they were also saying to you the 1990 model cars are going to be very expensive. And that pulled people forward. The idea that if you waited you might get a thousand dollars back but the list price was going up by a thousand dollars didn't quite seem like such a bargain.

MR. MacNeil: Is, Mr. Payton, is the incentive now a permanent feature of the automobile market in this country?

MR. PAYTON: I'm sorry, I didn't hear your question.

MR. MacNeil: Are these big incentives, the rebates, the low interest rates, are they now a permanent feature of the automobile market and that the mass car buying public just isn't going to buy cars unless those are offered?

MR. PAYTON: I agree with Ms. Keller that the incentives, the reason they worked better in the summer was because of the expected high prices on the '90 models plus the incentives. For several months now, the effectiveness of the programs has been getting less and less. It's not nearly as effective as it was when it was first started. And I hope that it is not a permanent fixture although I do agree that we have the public somewhat addicted to these things like the housewife is addicted to double and triple stamp days at the grocery store. I think that there definitely has to be pay back period somewhere down the line if we're going to get off this addiction to cash incentives. We've lost a lot of credibility with our consumer, because now he sees brand new models, 1990 models, that are already being, we're already offering cash incentives on, so he begins to wonder was this car priced correctly in the first place.

MR. MacNeil: Was it priced correctly, Mr. Pitcoff, or is that now factored in, into the new prices?

MR. PITCOFF: The increases in prices this year were driven largely by changes in material and labor costs and a large part of it associated with the addition of passive restraints for the new federal safety requirements. We don't consciously put a pack into the price of a vehicle in anticipation that a portion of it is going to be used for future marketing costs. And I would agree with Jimmy we'd love to see the need for incentives abate and eventually go away. Realistically, I don't think any of us would expect that we'll be able to do this cold turkey.

MR. MacNeil: Ms. Keller, why are Japanese cars, particularly the ones made in this country, doing better relatively than the American cars, because while the figures are that some of them have actually gone up over this year, whereas the big three have gone down?

MS. KELLER: As a group, the Japanese, if you combine the sales of imported cars and transplant sales are the only group of automakers to record an increase this year in this country.

MR. MacNeil: Why is that?

MS. KELLER: Well, I think that there are a number of reasons. First, they have a very broad product line and they've had a number of hot cars. There's nothing like a couple of popular models to get the blood stimulated and to get people into the showroom. Another thing that they're beginning to do more in earnest, but they've got product to sell is that they're going after a new group of customers, the fleet customer for whom they've never been able to serve because they've had enough volume, and that now is more is than 20 percent of the market, so there are new players in this game or relatively new players, and second they're beginning to open up dealerships in the Midwest where again they didn't really have a big presence. Now combined it's probably a collection of a lot of littlethings, but altogether, it adds to a much more competitive market overall, with them being a bigger force.

MR. MacNeil: Mr. Payton, how do you explain the popularity of the Japanese cars now since Detroit has gone a long way over the last few years to try and catch up with the Japanese reputation for quality and reliability?

MR. PAYTON: Well, I think the domestic manufacturers certainly have made a lot of strides as far as quality is concerned. I'm not sure that the perception of quality that the average buyer has has caught up with the actual quality, but nevertheless, what Ms. Keller says is very true. They have been able to bring to the marketplace the type of product that the consumer wants, the consumer that can buy, the consumer that has the money to buy, and they have been very successful in that. They have shortened the period that it takes to bring a vehicle to market from something like five years that we have had here in the United States to something like 36 months, some cases even less. But they've been very successful in that and they've had the product out there at the right place and the right time and they've introduced some new car lines that we haven't had before and all of those things have served them very well. In the light pick up market such has not been the case and the domestics are still the leaders there, and there has been no gain by the imports.

MR. MacNeil: Do you agree with that, Mr. Pitcoff, that the Japanese are doing relatively well to the rest of you because they're just introducing more new models faster?

MR. PITCOFF: I would resist the idea that the rest of us ought to be aggregated or that the Japanese should, for that matter. I think each manufacturer should be looked at on its own merits. But if you want to aggregate the Japanese in the period since 1981, their total share of the car and truck market in the United States is up by a little bit less than 2 percentage points. Ford's share over that same period of time has gone up by 5 percentage points, so we don't feel that we are losing ground versus the Japanese.

MR. MacNeil: So you're not worried about the competition the Japanese are giving you in the marketplace?

MR. PITCOFF: Of course, we're worried about the competition. We're worried about competition that comes from anywhere. We recognize that the '90s are going to be a decade of probably the most intense competitive environment in this industry that we've ever seen.

MR. MacNeil: One of the things I've read, Ms. Keller, and I'll ask the others in a minute, is that the Japanese have simply been putting a lot more money, research and development money, into new engine designs, new materials in the engine, the multi-valve engine which increases the efficiency --

MS. KELLER: Power.

MR. MacNeil: -- and the power of the car. Is that, I mean, is the consumer aware of that yet? Is that a major factor, or is that just a little thing at the sort of top end of the line?

MS. KELLER: For some consumers. Remember, consumers buy a total package, and certainly for some people, this is meaningful. When it comes to engines specifically, many of the engines that are in American cars are 15 or 20 years old. We're dealing with a very major competitive problem. Now the industry has plans to address it, Ford has a major modular engine program. But again these are programs that come out in the next year or two and right now we're dealing frankly with obsolete power trains.

MR. MacNeil: Does the consumer know that, Mr. Payton, that, what Ms. Keller just said, that cars, engines in Americancars are of designs 15 to 20 years old?

MR. PAYTON: I don't think that's a significant factor with the average customer that comes in to the showroom floor. They're concerned about economy and gas mileage and they're concerned about quality, and they're concerned about safety, but as far as being concerned about a two cylinder engine, they perhaps would express some interest in it, but the enthusiastic which doesn't comprise very much of the marketplace today, maybe 5 percent, they're the ones that would ask about those engines that are coming on stream. The average person that's looking for transportation to work, for the family, to have for his pleasure, these folks are looking at styling, they're looking at performance, as far as ease of getting into the car, riding in the car, operating the car, those kinds of things, along with how much am I going to have to pay per month for this automobile, and how much is it going to cost me to operate this automobile.

MR. MacNeil: Mr. Pitcoff, the Wall Street Journal in a report said the other day that your industry is facing problems largely peculiar to itself, not problems reflecting the U.S. economy. What do you say about that?

MR. PITCOFF: I would say that the economy is definitely slowing. And we see signs of that in a number of areas, retail sales, the housing industry as well as the automobile industry. In fact, our economists believe that the growth rate for GNP in the first half of 1990 will be down to about 1 percent. And in reaction to that, we expect interest rates to come down, and then we'll have a re- acceleration of growth in GNP to about a 2 percent rate in the second half of the year.

MR. MacNeil: Can the auto industry look for a lift from the economy or are there longer-term, is there a longer-term trend indicated by this right now?

MS. KELLER: Well, I think the auto demand can look for a lift from the economy. The question is who is going to supply that demand, and that's the really interesting question for the 1990s.

MR. MacNeil: What is your answer to that question?

MS. KELLER: Unfortunately I see the Japanese taking a bigger and bigger share. This year they will build in this country more cars than Chrysler. Within two years, they will be producing more cars than the Ford Motor Company in the United States. Now they're going to try to sell those cars to somebody and my guess is they're probably going to be reasonably successful selling them to Americans. They'll export some to the Europeans and some back home to Japan, but most of them will stay here. And when they do, inevitably you can't sell two cars to one person at the same time. Somebody's going to not sell a car.

MR. MacNeil: So where does that lead you in your prediction?

MS. KELLER: It leads me to the I think inescapable conclusion that the big three in the aggregate are going to become much smaller. I would hesitate to guess who among them is going to suffer disproportionately, but it seems to me inevitable that when the Japanese double their production from where they are currently, that's an additional million cars, when the car market expands to accommodate that, somebody else is not going to be building cars?

MR. MacNeil: Does Detroit see it that way, Mr. Pitcoff?

MR. PITCOFF: I would point out that doubling capacity doesn't necessarily result in the doubling of production. We see plenty of evidence that capacity is under utilized in some domestic plants, as well as in some of the transplants, as they're called, and I would not assume either that all of the Japanese capacity will be utilized, or all of it will be incremental to the vehicles that are presently being imported into this country. In fact during the past year, we've seen a considerable amount of trade-off between the increased production here in America and decreases in the importation of fully assembled vehicles.

MR. MacNeil: Okay, Mr. Pitcoff, Mr. Payton in Dallas, thank you, and Ms. Keller in New York, thank you.

MR. LEHRER: Still to come on the Newshour tonight, an update on the boat people of Hong Kong, pain killer problems and comparing the Houses of Common and Representatives. UPDATE - ADRIFT

MR. LEHRER: Next an update on the thousands of Vietnamese refugees facing forced deportation from Hong Kong back to Vietnam. On Monday, the first group was sent back by authorities in the British colony, but after international criticism and an uproar in Parliament, the British government suspended any more refugee shipments. Lindsay Taylor of Britain's Independent Television News reports from Hong Kong.

MR. TAYLOR: The politicians have had their say. Today it was the turn of the boat people. On this island where some three and a half thousand Vietnamese are being held they rallied together as in other camps to demonstrate their anger at the new mandatory repatriation policy, a desperate attempt to try and make heard the one voice so far left out of the recent debate. The police patrol boats were out as usual, but the concern seemed to be not so much with stopping illegal immigrants but preventing reporters from reaching the island camps and their shut away inhabitants.

CAMP GUARD TALKING TO NEWSMEN: You have entered the restricted area. Please go away. Otherwise you will be arrested.

MR. TAYLOR: Regular craft were allowed to land, but the authorities argued that media attention is liable to create unrest at a time when tensions are running particularly high. We did come across one island camp on which we were able to land without being turned away. As it turned out, this was the camp from where 3 dozen of the 51 repatriated two nights ago had been selected. These men, women and children here were determined they would not be next to be put on the plane back to Vietnam. We were refused permission to go inside, but nevertheless the boat people still made their protests.

VIETNAMESE REFUGEE: We feel afraid. We're terrified of forced repatriation.

MR. TAYLOR: What do you think will happen to you if you go back to Vietnam?

VIETNAMESE REFUGEE: We're afraid of persecution in Vietnam.

MR. TAYLOR: Are you prepared to offer resistance if you are asked to go back to Vietnam?

VIETNAMESE REFUGEE: We'll never go back to Vietnam. If the police come, we'll fight against them.

MR. TAYLOR: Back on the mainland, Sek-Kong Detention Center where the authorities at the sharp end of any unrest enter the camp for a regular inspection, extra officers being deployed. Here the atmosphere is more relaxed, the facilities are relatively good, nevertheless, the evidence of the underlying tension is there. It seemed at first that once again the authorities did not want the outside world to see in, but keen to allay suspicion and demonstrate there was nothing to hide, the officer in charge invited us in. There was no access to the four accommodation areas, but we witnessed the cooperation with the aid agencies, an effort to improve the quality of life for the thousands here. Loads of clothes from Oxpan, this the second such delivery this year, all of them systematically and fairly distributed to people who have only the few possessions the boats could carry.The 7000 or so of boat people being held here have still to be screened to assess whether they're genuine refugees or so called economic migrants. That process could take up to a year or more so there's no immediate prospect of mandatory repatriation here. Nevertheless, rumors and fears still circulate the camp.

REFUGEE: [Speaking through Translator] When we heard about the repatriation we felt very upset. There was a large discussion. We were worried if were returned to Vietnam about the threat of execution or imprisonment.

REFUGEE: [Speaking through Translator] If the people here are forced to be repatriated -- to go back to Vietnam -- we hope that the United States will come to rescue us.

MR. TAYLOR: Why does he think the United States will help?

REFUGEE: [Speaking through Translator] Because people listen in to the radio and on it they've heard President Bush say that he's opposed to forced repatriation.

MR. TAYLOR: Those we spoke to said they'd confine their protests to non-violent demonstrations. But this camp like others has had its share of disturbances. Just a fortnight ago, four Vietnamese and a police officer were injured in fighting, but such clashes the authorities say are not caused by the repatriation issue but severe friction between rival gangs.

CHIEF INSPECTOR DAVID MACKESY, Deputy Commandant, Shek-Kong Camp: These are homemade spears made from water pipe conduits. We've been picking up these for the last month or so now. At the moment everything seems quite calm. We've had no real indication there's going to be any reaction to what happened the other night. Everything appears normal, the children are out. And as far as I can see in here, the atmosphere seems quite pleasant.

MR. TAYLOR: It must worry you though that when you go in each day you bring out weapons like that.

CHIEF INSPECTOR MACKESY: Yes, it does. Fortunately there's been no attempt to use them on the police yet. It's purely -- of course, we have to take them anyway. One day they probably will turn them on us.

MR. TAYLOR: Tonight with reports that mandatory repatriation is to resume next week, it's clear that the high level in surveyance and security will have to remain in force for months to come.

MR. LEHRER: The Bush administration did say yesterday that forced repatriation is unacceptable. Some 50,000 Vietnamese refugees have entered the United States this year, most directly from Vietnam. FOCUS - PROBLEMS WITH PAINKILLERS

MR. MacNeil: Next tonight we look at a medical problem which has been linked to over-the-counter painkillers. The Food & Drug Administration has been asked to add a warning to some over-the- counter painkillers alleged to cause kidney problems. This is the latest episode in an ongoing battle for the consumer pain pill market. Last year alone Americans spent $1.7 billion on these over- the-counter drugs and these sales are expected to grow. Correspondent Tom Bearden has a report about the health issues raised by these non-prescription painkillers.

MR. BEARDEN: In 1983, Katherine Joyner's kidneys failed. Her doctors told her it may have been the result of taking too many over the counter analgesics, commonly available non-prescription pain relievers.

KATHERINE JOYNER: I was just so ill I just couldn't maneuver. I couldn't do anything, I couldn't do my housework, and I was trying to go to work on the job, and sometimes I'd be so bad up there, they'd even send me home. That's how bad I had gotten.

MR. BEARDEN: For 20 years, Joyner worked as a legal secretary in Durnham, North Carolina. She got tension headaches on the job. To control the pain, Joyner followed doctor's orders and took four painkillers a day for a period of three years.

MS. JOYNER: I just never thought about aspirin or an analgesic hurting you in any way, and the doctors had told me to take it and that's what I was doing. I was following their orders.

MR. BEARDEN: The drug she took is called Goody Powder, a combination of aspirin, acetaminophen and caffeine that is popular in the South. Those same ingredients are found in many analgesic preparations people take for fever, headaches, and minor pain. Joyner now spends her days with her invalid husband. She was forced to place him in a nursing home when she became too sick to care for him at home. Katherine Joyner's case is not unique. In some parts of Europe and Australia, as much as 20 percent of serious kidney disease is called by analgesics. In the United States, that percentage drops to 4 percent or about 5,000 people. But some doctors think that number isn't accurate because of inadequate reporting. Dale Sandler is an epidemiologist at the National Institutes of Health. She studied more than 500 people who have serious kidney disease looking for a connection with analgesic abuse.

DALE SANDLER: I found that people who were heavy users of analgesic medications were at increased risk of developing kidney disease.

MR. BEARDEN: The study found a link between kidney disease and acetaminophen, a pain reliever used in many products. It's the main ingredient in Tylenol, Pamprin, Anacin, and other products. Drug manufacturers strongly assert their over the counter products are safe. They stress that the Sandler study focused only on people who misused painkillers.

DR. WILLIAM SOLLER, Non-Prescription Drug Spokesman: There's no evidence that OTC analgesics when used according to label directions cause kidney disease.

MR. BEARDEN: But does it cause kidney disease, if it's not used according to the directions, if it's over used?

DR. SOLLER: I think that's a matter of question and one that would be resolved as every scientific process is resolved when the data are shared and the methods validated and the results replicated. To date, that hasn't been done.

MR. BEARDEN: But Sandler's study was not the first to cast suspicion on analgesics. In 1984, the National Institutes of Health issued a statement which said combinations of analgesics taken in large doses over a long period of time cause specific forms of kidney disease. The report recommended serious consideration be given to the withdrawal of such mixed analgesic drugs from over the counter use in the United States. [DOCTOR WITH PATIENT]

MR. BEARDEN: Dr. William Henrich, a renal specialist at the Veterans Administration Hospital in Dallas, goes further. He says anyone who abuses painkillers is taking a chance with their kidneys.

DR. HENRICH: You're rolling the dice and the odds increase against you the more you take for the longer period of time you take them. If you're taking eight analgesic tablets a day and you do this for three or four years, probably your chances were one in five, one in four, one in six, in that range of changes if you took that many analgesics for that length of time.

MR. BEARDEN: If the damage is discovered early enough, the disease can be stabilized, but Henrich says the symptoms are subtle and may not be apparent until significant damage has already occurred.

DR. WILLIAM HENRICH, Kidney Specialist: One problem with this disease is that it's a silent disease. I mean, you wouldn't know that you had this disease until you had extensive kidney damage. For example, if you were such a person and you have consumed this amount of analgesic, you might feel well and present yourself well and think that you're fine.

MR. BEARDEN: Henrich wants stronger warning labels to tell people about the risks of analgesic abuse. But the Food & Drug Administration doesn't think the danger of kidney damage is great enough to require a special warning. The FDA says any drug can cause serious side effects only if taken in very large doses.

JOHN HARTER, FDA: Drugs have benefits, but they all have risks. When you take more than what's recommended in OTC labeling, you're taking a risk.

MR. BEARDEN: Harter says studies show consumers do read labels and do not abuse over the counter drugs. But Sandler found otherwise.

DALE SANDLER: People report taking medications to help them get through the day, to prevent headaches, perk them up, a whole variety of reasons that are not wholly supported by the medical need to be taking the drugs. [ANACIN COMMERCIAL]

MR. BEARDEN: OTC painkillers are a multi-billion dollar industry. Re-writing warning labels poses a political as well as a practical problem for the FDA. The question seems to be how specific the labels should be. Drug companies don't want to frighten away consumers with dire warnings of adverse side effects, but the FDA's main concern is informing the most people.

JOHN HARTER, FDA: Some people are very well educated. Other people have not even graduated from high school. Some are not using English as their first language. And these are all problems with how do you tell people very precisely about hypertension and kidney disease.

MR. BEARDEN: The Food & Drug Administration says people get confused if a long list of side effects is included with the labeling. They decided on a more general warning which advises people to consult their physician if they develop unusual symptoms. But many physicians may not be aware of the link between kidney disease and painkillers.

MS. JOYNER: I would go in to different doctors and each one of them seemed to be telling me that my problem was just a nerve problem, that I wasn't really sick, you know.

MS. SANDLER: What needs to be there is some physician education. People who have chronic headaches don't call a kidney doctor. [NUPRIN COMMERCIAL]

MR. BEARDEN: The controversy over the alleged connection between kidney disease and analgesic abuse has grown since another drug came off the prescription list, ibuprofen. Ibuprofen is the active ingredient in Advil, Nuprin, Motrin and others. When ibuprofen was approved for over the counter sales in 1985, the Kidney Foundation asked that labels include warnings for people vulnerable to kidney failure. But the FDA and the drug companies didn't think those warnings were necessary.

DR. SOLLER: It's possible that an individual could use more than one or two or three Advil or ibuprofen tablets than is recommended, but that individual is not being responsible when it comes to self- medication.

MR. BEARDEN: Former Seattle Seahawk Kenny Easley is now suing Advil and his doctors because he says the drug destroyed his kidneys. Easley led the NFL in pass interceptions in 1985. The next season he took an ankle injury. To suppress the pain, he took 20 Advil a day, he says on his doctor's orders. Five months later he was diagnosed with kidney disease. Easley now needs dialysis treatment three times a week to stay alive. He says he wants privacy and has declined to talk to the press. Dr. Henrich thinks there may be more cases like Easley's in thefuture.

DR. HENRICH: My main concern about ibuprofen is that we will see three or four years from now more and more people come to end stage kidney disease because they used ibuprofen chronically.

MR. BEARDEN: The FDA now finds itself in the middle of another ibuprofen controversy. This one involves caffeine. Some ibuprofen manufacturers now want to add caffeine to their products. But animal studies show it can be toxic to kidneys when it's added to analgesics. Caffeine is already used in combinations of other analgesics like the one Katherine Joyner took. John Harter says he personally has grave doubts about the wisdom of that practice.

JOHN HARTER: I think that caffeine is probably a bad thing to mix with these things, but we have not institutionalized that yet.

MR. BEARDEN: The FDA is now studying the possible health risks of caffeine in over the counter analgesics. A decision is expected later this fall. FINALLY - HOUSE IN COMMON

MR. LEHRER: Finally tonight, Roger Mudd takes advantage of the coming of Britain's House of Commons to America via C-Span Cable Television to make some comparison's. [BRITISH HOUSE OF COMMONS SEGMENT]

MR. MUDD: C-Span is so worried that its viewers will not understand the customs and procedures of the House of Commons that it's put out a viewer's guide complete with seating arrangement, glossary, history, and daily timetable. The fact is the British House of Commons and the American House of Representatives are so similar that it takes only the slightest adjustment to have it all make sense. Here then is the MacNeil-Lehrer every man's guide to Anglo-American legislative harmony. First there is no dress code in Commons. Males seem to lean toward grays and blues, females toward brighter colors. But that's true in the American House as well. In fact, some members in London and Washington dress a lot a like, whether with red sweaters, red jackets or red ties. Also both Houses have presiding officers who are called "Mr. Speaker". In Washington he wears a coat and tie, in London, a wig and robe. They are both responsible for keeping order. The British Speaker does it by yelling --

BRITISH SPEAKER: Order! Order!

MR. MUDD: The American Speaker does it by tapping his gavel. All politicians of course love praise. In Washington, they do it by applauding. In London, they do it by saying here, here here. Both Houses are forever using legislative gobbledegook.

REP. ROSTENKOWSKI: But that committee has had under consideration the Bill HR3299 and has come to no resolution thereon.

HOUSE OF COMMONS SPOKESMAN: And that all members returned upon double returns to withdraw till their returns are determined.

MR. MUDD: Both Houses are frequently empty and idle. In both London and Washington, the lower House systematically refuses to use the name of the upper House.

SPOKESMAN: The other body composed largely of millionaires has already spoken.

MARGARET THATCHER: There will be a free vote of the House which will together with what happens in the other place will decide the matter.

MR. MUDD: Whether it's the other place or the other body, it is forever sending messages and messengers.

SPOKESMAN: The Speaker, a message from the Senate.

HOUSE OF COMMONS SPOKESMAN: The Queen commands this honorable House.

MR. MUDD: In both cities, all members are either distinguished or honorable.

SPOKESMAN: And I think the distinguished gentleman.

SPOKESMAN: I yield 2 minutes to the distinguished gentlemen.

SPOKESMAN: I thank the distinguished chairman.

HOUSE OF COMMONS SPOKESMAN: I've come to the question that the honorable gentleman asked me.

MARGARET THATCHER: The honorable gentleman is correct and he knows it -- there are -- and he knows it.

MR. MUDD: Each House has its mace, the symbol of authority and supremacy, and both Houses are filled with the rich and varied accents of the country, Liverpool, Chicago, Belfast, Hawaii, Scotland, South Carolina. Now comes the tricky part. In Great Britain, the queen does not take questions, the prime minister takes questions and she takes them on Tuesday and Thursday morning not from the press, but from the opposition in the House of Commons.

MRS. THATCHER: The leader of the opposition and his colleagues have nothing to offer.

MR. MUDD: So you'll see Neil Kinnock, the leader of the Labour Party, grilling Mrs. Thatcher.

NEIL KINNOCK, Leader of the Labour Party: Will the prime minister now make a public apology for this gross incompetence?

MR. MUDD: Now all you have to do is pretend that Neil Kinnock is really Sam Donaldson grilling one of our prime ministers.

MR. DONALDSON: How can you justify this duplicity?

PRES. REAGAN: I don't think it was duplicity.

MR. MUDD: If that part is straight, then the rest is easy. Since our President is sort of like royalty, both he and the queen get to go before their legislatures. Each has a certain way of entering the chamber. Each gets to give a speech that is written by others.

QUEEN OF ENGLAND: My government will continue to attach the highest priority to national and Western security.

PRES. BUSH: We must take actions today that will ensure a better tomorrow.

MR. MUDD: And each has a special way of saying thank you. So it's all really one and the same, isn't it? What if our president uses a teleprompter and their queen uses eyeglasses, and who cares whether it's Neil or Sam doing the cross-examining? The answers are all about the same. Oh, yes, there's one more thing, one more characteristic that unites the politicians from these two countries. It's their ability to rest their eyes in public without a pillow or a blanket. Watch carefully the gentlemen from Surrey, the right honorable Jeffrey Hough. He has two rules. First, he keeps his head on a perpendicular plane. And second, if she catches him, he simply mumbles. RECAP

MR. MacNeil: Again the main stories in the news today, the U.S. trade deficit narrowed sharply during the 3rd quarter, the White House announced that Pres. Bush will attend a four nation drug summit in Colombia on February 15th, Bulgaria's Communist Party renounced its monopoly on power, South Africa's jailed black nationalist leader Nelson Mandela discussed political change with Pres. F.W. DeKlerk. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.