The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. Leading the news tonight, General Motors said it will close 11 plants employing 29,000 people. Shultz and Shevardnadze ended two days of arms talks without making progress. President Reagan said stories of a deal with Iran had no foundation and were endangering efforts to free American hostages. And the President vetoed the clean water bill. We'll have the details in our news summary coming up. Jim?

JIM LEHRER: After the news summary, we look at why General Motors closed the plants and laid off the workers and at what's called the over-capacity problem of the industrial world. Then Immigration Commissioner Alan Nelson confronts concerns about the new immigration law with the governor of New Mexico and a county official in California. News Summary

MacNEIL: The General Motors Company, reeling from shrinking profits, today announced that it will close 11 plants and lay off 29,000 workers. The sites affected are vehicle, assembly and metal stamping plants in Michigan, Ohio, Missouri and Illinois. The company said it would consolidate work in other factories, with the aim of cutting costs by half a billion dollars a year. GM, America's largest auto maker, reported an operating loss of $339 million for the third quarter. GM President F. James McDonald explained the decision.

F. JAMES McDONALD, General Motors: The closing of 11 of our operations was made after carefully reviewing the steps that GM has to take to increase its competitiveness. And these actions are, we feel, absolutely necessary to maintain our market leadership. We realize that these closing will have an impact on the people who work in the 11 plants, on their communities and their states. And we're committed to working with both our salaried and hourly employees with the union officials and with the government leaders to reduce the impact of these necessary closings.

MacNEIL: The closing will take place over two years. Outside GM plants in Detroit and Norwood, Ohio, this is how some of the workers reacted.

REPORTER: What's your reaction?

GM WORKER: It's very discouraging that, you know, I'm a new hire. I've only been here a year. When I hired on, I thought I'd have a job for 30 years. Now I ain't got nothing, you know.

GM WORKER: My rationale, I don't think it's fair for all of us that's only got a year or two years, and we have no bumping rights or nothing, but everybody else has bumping rights from the other plants to us.

GM WORKER: Well, they've talked about it ever since I've been here, just about. I believe it this time.

GM WORKER: Oh, no, we're not giving up. We'll never give up.

GM WORKER: These people have always been fighters. And usually when their back's up against the wall is when you'll see the best come out of them. And you'll see that. The target date is June of '88. That gives us a year and a half. And I think the changes that we need to make, we'll make.

MacNEIL: Wall Street reacted positively to the efforts to cut costs and make GM more competitive. It's stock rose 1 1/8 to close to 74 3/8 in heavy trading.

Another story got the stock market's attention today, and it came from a New York courthouse. The first prison sentence was handed down stemming from Wall Street's largest insider trading case. Ira Sokolow, a former merger specialist for Shearson Lehman Brothers, got a year and a day in prison for passing nonpublic information to another Wall Street trader. Jim?

LEHRER: George Shultz and Eduard Shevardnadze did not have a good meeting in Vienna. The U.S. Secretary of State and the Soviet foreign minister met for five hours and quit today in disagreement. It was the first high level meeting since the Iceland summit. Shultz told reporters afterward, there had been no movement. Shevardnadze said the conversations left him with a bitter taste, accusing the United States of backing off positions taken at the summit.

EDUARD SHEVARDNADZE, Soviet foreign minister [through translator]: We will not say that the spirit of Reykjavik is dead. I will say that the Soviet Union will protect and defend what has been achieved in Reykjavik.

GEORGE SHULTZ, Secretary of State: I can't say that the meetings have moved arms control matters along in any significant way, and I regret this. I can not report the kind of progress we would like. But we will continue to work for progress in all the areas of our extensive agenda with the Soviet Union.

LEHRER: In another area of U.S.-Soviet relations today, John Walker was sentenced to life in prison, his son Michael to 25 years. Walker is the former navy officer who pleaded guilty to running for 17 years a Soviet spy ring that included his son, a navy enlisted man, and other members of his family. The federal judge in Baltimore who did the sentencing told John Walker he was "revulsed by the fact that a human being could be as unprincipled as you."

MacNEIL: President Reagan today signed the immigration bill, making it a crime to hire illegal immigrants, but offering amnesty to possibly millions of illegals. Those who can prove they've been here since 1982 may be given temporary legal residence and the possibility of later citizenship.

At the signing ceremony, reporters asked the President about reports that the U.S. made a deal with Iran to free American hostages in Lebanon in exchange for military supplies.

REPORTER: Mr. President, do we have a deal going with Iran?

Pres. RONALD REAGAN: No comment. But could I suggest and appeal to all of you in regard to this that this speculation -- the commenting and all -- on a story that came out of the Middle East and that has no foundation, that all of that is making it more difficult for us in our effort to get the other hostages freed.

MacNEIL: Syria's prime minister, Abdel-Rauf al-Kasm, said today he was prepared for what he called honest state to state coordination to help win release of Western hostages in Lebanon. He made the statement in an interview with French radio, but did not elaborate.

In Ankara, Turkey, an indictment today blamed the terrorist group headed by Abu Nidal for the September 6 synagogue attack in which 21 worshippers died. It was the first official statement linking Abu Nidal to the two Arabic speaking gunmen who burst into Istanbul's Neve Shalom synagogue, barred the doors, then hurled grenades and sprayed worshippers with machine gun fire. It was the first day the synagogue had been opened for services since being closed for extensive renovations. Both gunmen also died in the attact. Turkish authorities said they were holding three of five suspects named in today's indictment and said the trio had admitted begin members of the group headed by Abu Nidal.

LEHRER: Back in this country, there were two stories about water today. A new Environmental Protection Agency report warned about lead in water, urging stricter standards that would save lives by reducing the incidence of strokes and heart attacks in adults and brain damage in children. The report said $1 billion in health and disability costs could be saved by a lead cleanup cost of between 100 and $140 million.

Also, and by coincidence today, President Reagan vetoed an extension of the 1972 Clean Water Act. The President said the $18 billion price tag exceeded acceptable levels.The law financed local water and sewer system construction projects. Senate Democrats said today the bill will be reintroduced in the new Congress.

MacNEIL: The worst helicopter disaster in Britain's history occurred today north of Scotland. At least 19 people are dead, and 26 others are missing and feared dead in the crash of a large Chinook helicopter. The chopper was ferrying workers from a Shell Oil rig northeast of the Shetland Islands to Sumburgh Airport. Peter Gould of the BBC reports.

PETER GOULD [voice-over]: The Chinoon went into the sea on its approach to Sumburgh Airport, having almost completed its 130 mile flight from the Brent oil field. Although first reports said the helicopter had ditched, it appears to have been a sudden crash from a height of about 500 feet. The machine sank quickly, and the wreckage was found over a fairly small area, suggesting it had hit the water at some speed. And it appears there was no time for the crew to put out a Mayday call. As a huge air-sea rescue operation got underway, the two survivors were winched to safety by another helicopter and flown to hospital in Lerwick.

RESCUE PILOT: We looked around to see if anybody else was alive. But this time, bodies were floating up to the surface, but they were very obviously dead. This was probably about ten minutes later, so after ten minutes under the surface, there was very little hope they would be alive.

MacNEIL: The worst previous helicopter crash in Britain occurred in July, 1983, when a British Airways S-61 went down off the southwest coast, killing 20 persons.

In this country, a Pan American jet and a small private plane collided on a fog covered runway in Tampa. Authorities said the light plane, flown by an off-duty Eastern Airlines pilot, hit the Pan Am 727 and skidded beneath it and burst into flames. The pilot of the smaller plane, a Piper Aztec, died in the blaze. He was apparently trying to land as the Miami-bound airliner was taxiing for takeoff. Four persons on the airliner suffered minor injuries.

LEHRER: And that's it for the news summary tonight. Now it's on to analysis of the General Motors shutdowns and layoffs and industry's over-capacity problem. And to the concerns about enforcing the new immigration law. GM: Belt Tightening

MacNEIL: "What is good for General Motors is good for the country," former GM president and Eisenhower's Defense Secretary Charles Wilson once said. While that point is debatable, the news today shows that GM's troubles can spread through much of the country. America's largest corporation, which suffered losses of close to $340 millio du ring the third quarter, said it will soon close 11 plants in four midwestern states.The decision affects 29,000 jobs. For the reasons behind GM's decision and what it means for the auto industry in general, we talk with Maryann Keller, a top analyst with Furman, Selz, Mager, Dietz and birney, a New York brokerage firm.

Ms. Keller, what is GM's problem? Too much capacity?

MARYANN KELLER, auto industry analyst: Well, in the last five years, General Motors has opened several new -- I should say at least four or five new -- assembly plants. And what General Motors is now having to adjust to is the fact that it has too much capacity. It does not need both the old plants and the new plants. And the actions today bring the company's ability to produce cars more in line with its market share. It's closing the old factories. The new factories are, in some cases, just a couple of miles away. It does not need both the old and the new.

MacNEIL: GM Chairman Roger Smith said today that this was their strategy for the '80s -- to replace the old facilities and modern plants, and that they knew that there would be overlap for a time. It sounds as though this wasn't a surprise; they've just been planning this all along.

Ms. KELLER: Well, I guess to a degree you can accept that as the reason. It comes at an interesting point in time. It comes after Genereal Motors announced a very poor third quarter, and the company is obviously under a great deal of pressure to cut costs. Simultaneously, General Motors has had periodic problems in having built too many cars and then having to come to the marketplace with special promotions to get rid of them. So obviously, General Motors was going to have to do something to reduce its production levels. And this is one action that does it.

MacNEIL: Too many cars, period? Or too many cars of a kind that aren't popular in the marketplace?

Ms. KELLER: Well, General Motors has been criticized for having cars that look alike. It seems to have lost the styling and engineering leadership to its competitors -- both its domestic and foreign competitors. And so I think as we look forward on the question of General Motors and excess capacity, the question really is, can General Motors regain its product leadership, so that it can fill up those factories with orders? If it can't, then the announcements today really are only a prelude to what is going to have to be further closings in the future. I mean, what the industry, what the company has to do right now is concentrate on improving the product.

MacNEIL: Well, now, you don't do that overnight. If you're going to have to redesign, to make something more attractive and keep up with the consumer taste, that takes years to get on the road, does it not?

Ms. KELLER: Well, the marketing has to improve. And what is important in what they did today is that they're reducing their costs. They said they're going to cut costs by $500 million. And one way to make your car more attractive is to give a customer back a little bit of those savings.

MacNEIL: But just making -- I see what you mean. So, but it isn't just making fewer cars and therefore -- and more efficiently, so that you can sell them, maybe, a little bit more competitively. It is making a different car that is part of the problem.

Ms. KELLER: It's making a car that is more attractive. It's --

MacNEIL: Are Ford and Chrysler making cars that American buyers want proportionately more than GM?

Ms. KELLER: Well, I'd say Ford, Chrysler and the foreigners, collectively, have all come up with more attractive designs. Chrysler, for example, with the minivan. It was first on the market with that kind of product. It was first on the market with the convertible. The Ford Taurus and Sable has been, I think, captured the imagination of the customer in terms of offering a new design. And so I think that it's hard to see where General Motors has the leadership in product today.

MacNEIL: Well, what are they making that people don't -- aren't buying? I mean, what are they making too much of that is just sitting there?

Ms. KELLER: I think the criticism of General Motors product, frankly, is that it all looks alike. The silhouette of everything that General Motors builds is kind of the same. And it is that criticism. It's the criticism that's expressed by the Ford-Lincoln Town Car ad, for example -- "find my car" -- that I think has affected some of General Motors' ability to sell and differentiate its cars. The company, I think, is beginning to recognize this. The managers of the respective divisions have now said, "We're getting back to our heritage. We're going to differentiate Buick from Oldsmobile. We're going to bring Chevrolet back to the kind of car that every man could afford." And if they can do that with product design and with pricing and with better marketing, they'll be successful. I think that GM does have one division that is successful now, and that's the Pontiac division. They're doing a very good job of it. But it they're not successful, then the announcement that they made today is going to have to be followed in a year or so with more announcements of the same kind.

MacNEIL: What about the other -- what about Ford and Chrysler? I mean, are they off Scot free from these troubles themselves? Do they have over-capacity too, or are they just right?

Ms. KELLER: Well, for the time being, they are just right. I think we have to remember that General Motors made almost no cuts in its capacity during the last recession. It closed one factory, and that was in South Gate, California. Whereas, Ford and Chrysler shut down a considerable amount of capacity. Chrysler closed three plants. Ford closed three plants. And proportionately for those companies, that was an enormous cut in their ability to build. So they took the hit during the recession. General Motors is taking the hit right now.

MacNEIL: Is that -- was that a bad management decision to delay it? Have they lost proportionately more than the others?

Ms. KELLER: I think General Motors was overly optimistic about its ability to sell cars. I think back in the early 1980s, when General Motors was rich and its competitors were poor and General Motors had billions of dollars to spend, I think it believed that it was going to be able to increase its market share and, therefore, fill up these factories. It has not turned out that way. It's lost market share in the last five years and hasn't filled up the factories.

MacNEIL: Something you said the last time you were here intrigued me, remembering it today. We were talking at the time about the 2.9% financing that General Motors had just introduced to try and get rid of a backlog of cars. And you said that in all the auto companies, they were making a lot of money out of the financing business. I mean, are they more interested in making money that way than in making money making cars, which is so tough and competitive nowadays?

Ms. KELLER: Well, they'd better make money out of making cars. I mean, that's -- that is the business that they are in, and the business of making money off of the car loans has some limitations on it. I think that there's a tremendous -- there's a much greater potential of profit from the manufacturing of automobiles. But the pressure on the industry, in terms of the intensifying competition, the arrival of more Japanese competitors, which is really going to create the excess capacity for the industry in the future. And in the next three years, there will be a million new cars new capacity opened by the Japanese in this country. That's going to really put pressure on the Americans, and they had better be prepared in terms of having the costs to compete and having the product to compete. You can't just look to the can loan. Because eventually, they'll be able to offer car loans at 2.9 or 3.9 as well. If that's what it takes, that's what they'll do.

MacNEIL: Mary Anne Keller, thank you -- Keller, thank you. Business Bloat

MacNEIL: GM is not the only company in this country suffering from overcapacity. It is a problem threatening other industries, like steel and petrochemicals. For more on that story, we have a report by Paul Solman, a lecturer at the Harvard Business School and our special business correspondent. The report was produced by public station WGBH, Boston.

PAUL SOLMAN: Seventy years ago, U.S. Steel was four times the size of any other American corporation. But today, U.S. Steel has become USX, a diversified company with oil, gas, chemical and other subsidiaries. Its steel division, once the company's only line of business, has been losing so much money that USX would apparently be better off getting out of the steel making business entirely. This is an incredible collapse. And the question is, what happened? The standard answer is that the American steel industry is simply a dinosaur -- that we just can't compete with the rest of the world. But if you look around, you'll find that the rest of the world isn't doing so well either.

[voice-over] Take Japan, for example. Its steel mills boast the most modern machinery, the most dedicated workers. But the fact is that the Japanese steel industry is also in a shambles. A large share of the steel Japan uses is now imported from abroad, because it's cheaper. For all their efficiency, the Japanese steel companies can't compete either, and many are having to close their doors.

In Europe, steel has been part of the landscape for generations. But here, in West Germany's Sau region, for example, the situation is as grim as it is on the banks of the Manungahela. Like their counterparts in Pittsburgh and Yokohama, these German workers, once the pride of their industry, are facing a future with no steel industry at all. The only work left at this plant is dismantling it for scrap.

The steel workers of Germany, Japan and America did everything that was asked of them. And you really can't fault their companies either. But today, the companies and their workers are on the ropes. Because a whole host of new producers have entered the steel market. The Koreans, for example, with their huge industrial conglomerates, like Samsung.

[clip from TV ad]

ANNOUNCER: The steel processing capacity of the Samsung Heavy Industries Company will rise to 200,000 tons.

SOLMAN [voice-over]: Plants like this one have made Korea a world power in steel. And the same thing is happening in Taiwan, Brazil, even Mexico.

[on camera] When you look at all this, you begin to see the problem. The developing countries have even more modern steel mills, easy access to iron and coal, and a cheaper labor force. So you've got these new, highly competitive facilities, and you've still got the traditional producers in Japan and elsewhere who refuse to get out of the business. Add them all together, and you've got too many steel mills. And that's the problem.The world now has the ability to produce far more steel than it can use.

[voice-over] As it happens, there are institutions -- the Harvard Business School is one of them -- where people have made a real study of the problem. They call it over-capacity. And some of them think it's a problem that's reaching epidemic proportions.

JOSEPH BOWER, Harvard Business School: It's not just steel. There are too many plants producing too much product that the consumer doesn't want, that the market doesn't need worldwide in one industry after another. It's true in automobiles. There is 40% over-capacity in small cars worldwide. It's focused on the U.S. market. There's too much capacity in television. There's too much capacity in petrochemicals.

SOLMAN [voice-over]: Ah yes, petrochemicals -- chemicals made from petroleum. We generally think of them as plastics, and we take this stuff for granted. But plastics is a huge industry. And as recently as 20 years ago, it was one of the industries of the future. Remember this famous scene from The Graduate?

[clip from The Graduate]

ACTOR: I just want to say one word to you. Just one word.

DUSTIN HOFFMAN: Yes sir.

ACTOR: Are you listening?

Mr. HOFFMAN: Yes, I am.

ACTOR: Plastics.

SOLMAN [voice-over]: Dustin Hoffman may not have taken this business tip seriously, but the American chemical industry certainly did.In fact, almost all of the major American chemical companies built plastic factories. The market grew. The companies built more factories. The market grew some more. And the American petrochemical industry simply didn't have the time to consider what would happen if and when the demand for plastic slowed down.

Mr. BOWER: You could say the same thing about Europe, you could say the same thing about Japan. When growth slowed, when new countries, such as those in the Middle East or Canada or Southeast Asia, began building capacity right at that time, we developed a situation in which huge -- when I say capacity, I mean plants that cost a billion dollars to put together; huge complexes. You don't just close them like a restaurant that didn't, somehow or other, meet its owners' estimates. And they're just sitting there.

SOLMAN [voice-over]: And to the end of this century, there will be more capacity to produce plastics that the world can possibly consume. So the petrochemical industry is in the same predicament as steel. Now, you may think this is simply a problem of the old heavy industries. There has to be room for more capacity in high tech, right?

Mr. BOWER: Let's take high tech. The estimates in mainframe computers, that there's 100% over-capacity in mainframes. In semiconductors, 100%. In something like floppy disks, a new product, there are probably two dozen companies. Four of five can meet the world demand. So it's not just heavy industry. It's everywhere.

SOLMAN: Okay, let's assume Joe Bower's right, and there's over-capacity in virtually every industry. The obvious question then becomes, what should we do about it? Joe Bower's solution is for entire industries to get together and negotiate the shutdown of their least efficient plants -- a couple in West Germany, one or two laggards i( the United States, some even in Japan and so on. If you trim sufficiently. then you'd be left with just enough factories, making just enough product to satisfy world demand -- a perfect economic solution. But that doesn't solve the political problem.

[voice-over] All over the world, workers are using their political muscle to keep factories open, profitable or not. These workers know they can't get even remotely comparable jobs at anything like comparable pay if their factories are closed. But if these workers succeed, they may be keeping alive companies that really can't compete anymore in the world marketplace -- companies that are basically going bankrupt. And so American workers have two choices -- the same two choices that face their counterparts throughout the industrialized world. Workers can agree to take drastically lower wages, or they can convince their governments to protect industries like steel and their jobs at the public's expense. Either way, the factory stays in business, making more product, and that means the world over-capacity problem is bound to continue. Because the only real solution to over-capacity is fewer factories making fewer things. Alien Control

LEHRER: It took five years of hot argument and reluctant compromise, but finally the nation's immigration laws have been changed. President Reagan made it real and official today, signing into law the Immigration Reform and Control Act of 1986. Now what? This was the answer from President Reagan today.

Pres. REAGAN: Our objective is only to establish a reasonable, fair, orderly and secure system of immigration into this country, and not to discriminate in any way against particular nations or people. Future generations of Americans will be thankful for our efforts to humanely regain control of our borders, and thereby preserve the value of one of the most sacred possessions of our people: American citizenship.

LEHRER: But from some state and local officials, the answer was, nothing will happen as the result of the new law -- nothing but more chaos.And from Hispanic leaders, nothing new but discrimination will happen. The official whose job it is to make the new law work is Alan Nelson, the commissioner of the Immigration and Naturalization Service. He's here to give his answers to all the questions, including some from the governor of New Mexico, a county official in California, and those posed in this setup report from Texas by correspondent Tom Bearden.

TOM BEARDEN [voice-over]: For most of the year, the Rio Grande River isn't much of a barrier for people crossing illegally from Juarez, Mexico, to El Paso, Texas. But there's been a lot of rain in the Southwest recently. The river is unusually high for this time of year. That has slowed down the flow of people, but only a little. If they don't want to get wet, they can pay a young entrepreneur a small fee and raft across. The Immigration Reform and Control Act of 1986 was designed to erect a much more formidable barrier to illegal immigration. And Deputy Chief Border Patrol Agent Gus De La Vina says it's none too soon. He says the border is out of control.

G. De La Vina, Border Patrol agent: In 1960, this area along -- El Paso -- apprehended 3,000 illegal aliens. This last year, we apprehended in excess of over 312,000 illegal aliens. And that's what we caught.

BEARDEN [voice-over]: The ranks of the men and women who patrol the border will swell by some 50% under the new act, but they will still be, as De La Vina puts it, a very thin green line.

Mr. Le La Vina: The El Paso sector has 550 officers. We are responsible for 341 miles of international boundary, in addition to 85,000 square miles. That gives us about one officer for every five or six miles, which is literally impossible to patrol. You can't do it.

BEARDEN [voice-over]: The U.S. is a giant, economical magnet for these people -- a place where they can make in one hour what they would earn in a whole day in their country. The Immigration Service has long believed the only way to control the magnet is by imposing sanctions on employers who knowingly hire undocumented workers. After nearly 15 years of controversy, Congress wrote such sanctions into the bill -- up to $10,000 fines and prison terms. It will require employers at all levels to verify the citizenship of the people they hire. That's raised a lot of concern that managers will avoid potential problems by simply refusing to hire anyone with brown skin, discriminating against U.S. citizens of Mexican descent. But critics like El Paso County Judge Pat O'Rourke say many employers will simply ignore the threat, because the Mexican presence is too important to the community, culturally as well as economically.

PAT O'ROURKE, Country judge: They're an integral part of our community. They've helped us raise our children and offset all those kinds of burdens. You're just not going to turn on those folks and say, "Go home now." In terms of employer sanctions and the immigration bill turning illegal immigration back -- turning that tide back -- I just don't think there's a chance.

BEARDEN: That won't work.

Mr. O'ROURKE: I just don't think it will at all.

BEARDEN: Nobody really knows how many illegal aliens there are in the United States. The estimates range from 2 to 12 million, and some think the 12 million figure is conservative. The immigration reform bill will give many of them a chance to become legal residents of this country. But in many communities, like this one in El Paso, there is considerable fear and suspicion about how that process would take place.

[voice-over] The legislation would grant residency to illegal aliens like this woman, provided they can prove they have resided in the U.S. since 1982. But such proof may be hard to come by. Most undocumented workers are paid in cash, and few hold onto records like rent receipts and utility bills. There are predictions that the major beneficiaries of this bill will be those who specialize in forging such documents. And some Hispanic leaders believe the amnesty provisions are merely a ploy to flush out aliens -- that up to half of those who apply will be deported.

MAN [singing]: I ain't got no home. I ain't got no home.

BEARDEN: A group of Hispanic men singing the blues on a sidewalk on a Saturday morning. It may illustrate what many people here believe -- that the rest of the country doesn't understand the realities of living along the border; that a political boundary is not a cultural or economic boundary. Pat Sutton, chairperson of an umbrella organization called El Concilio, says there is one society here; not two.

PATRICIA ROYBAL SUTTON, El Paso "Concilio": I don't think they understand that the economy of a community such as El Paso is totally interdependent with the economy and the goings on of the city -- the sister city of Juarez. We are one community, and whatever happens to us on the American side affects the family situation.

BEARDEN [voice-over]: Community leaders like lawyer Jose Rodriguez question the motives behind the legislation.

JOSE RODRIGUEZ, Hispanic activist: I think it is an attempt to limit the growing numbers of the Hispanic popularion in the United States that is, as we all know, becoming politically more powerful. And I think the specific provisions in the bill are outright racist.

BEARDEN [voice-over]: Rodriguez and others say the new policy will fail just as certainly as the old, unless the U.S. helps Mexico deal with its economic crisis to remove the incentive to come to the U.S. Judge O'Rourke agrees and says no increase in the force of Border Patrol agents can halt the flow if the reasons for illegal immigration are ignored.

Mr. O'ROURKE: This is a 2,000 mile border. We've got 12 million people in the state of Texas alone. There are nearly 70-plus million people in Mexico. Fifty percent increase in that staff is not close to what it would take. China tried it 2,000 years ago, and they were very unsuccessful with the China Wall. We were unsuccessful with the Tortilla Curtain. I think we'll be equally as unsuccessful with this event.

LEHRER: Now to the man in charge of turning this new law event into a success: Alan Nelson, commissioner of the U.S. Immigration and Naturalization Service.

Mr. Commissioner, Judge O'Rourke says it's all doomed to failure.

ALAN NELSON, INS commissioner: Jim, good being here. You know, all of us Americans like to think we can do things and accomplish things. I don't think we like to admit we can't do things. I think in the immigration area what we have now clearly isn't working. I think Congress, after six years, recognizes that. The President has supported these changes. These are good, balanced changes. And with these new approaches -- employer sanctions, a good legalization program, checking entitlements for illegal aliens, beefing up the border patrol -- these all together can do the job to limit illegal immigration. You know, it's important -- this bill is to encourage and continue the heritage of legal immigration that we so cherish in this country.

LEHRER: Well, let's go through some of the points that were made in that tape. First of all, beefing up the border patrol 50% is not going to do any good. You heard -- I don't have to tell you the 2,000 mile border, etc., etc. An officer -- one every six miles. It will never work.

Mr. NELSON: Well, not true. It will work. Now, it's not alone. I think that's the important issue that Judge O'Rourke really isn't addressing -- that it's not just the Border Patrol. We need increases there. We apprehended this past fiscal year almost 1.8 million people. A great increase. That means we're stopping more. And that's working. Now we'll add more to that.But the important thing is the balance of the Border Patrol -- stopping people at the border that are coming in illegally -- and also at the marketplace. As indicated in the tape, people are coming in for jobs, and that's whta we need to address. Employer sanctions do that.

LEHRER: What about the point that was made in the tape that some employers will just ignore it, that societies are so intertwined, they'll just forget that.

Mr. NELSON: Well, some employers will, but as you indicated, there are substantial civil fines and even criminal penalties. So an employer could be hit pretty hard if they try to ignore the law. But I might emphasize, I think the important part of this bill isn't to try to find employers; it's to convince American employers, labor unions and the citizens generally that what we need to do is to have a legal immigration system. We can bring in foreign workers if necessary, but we want to work with employers associations, labor unions, community groups and others to be sure that we hire American citizens and legal aliens, including a lot of unemployment Hispanic Americans and black Americans who are now unemployed and can get jobs. So this can actually help our economy dealing with those that are legally here.

LEHRER: What is your enforcement strategy? Are you going to go in tough at the beginning, find some examples, string them up, so to speak, or what?

Mr. NELSON: No, I think the thrust of the law, Jim -- and it's provided in the law -- is there is a six month period for notice to employers, a second 12 month period for a warning system. It's sort of like the traffic citations. No fines, but just a warning. So we want to work, during this beginning six months particularly, with employers and labor unions and others to really stress the positive -- hire legal workers, do not hire illegals. And that's the truth of it. And so we look forward to that. Now, of course, after this initial period, we will go after the more blatant violators and certainly make it clear that we will enforce the law fairly and efficiently.

LEHRER: What about the problem of forged documents that -- the point was made that it will be very difficult for many of these people to prove that they are, in fact, legal.

Mr. NELSON: Forged documents, again, will be a problem. But I think we need to look it in a broader perspective. Again, there are additional penalties in this law for people producing or using forged documents. So that's an important thing. But I think again, the good faith of the Americans -- American employer and ther person applying for the job -- is what will make this work.

LEHRER: But you must have an enforcement strategy to stop forged documents, right? There've been a myriad of stories even before today about that industry is already cranking up. Are you cranking up a counter-strategy to stop it?

Mr. NELSON: Well, we'll have many strategies. And again, the major one being the positive one I stress, because that's the important thrust.

But we have many strategies, because it has to be a very balanced approach to deal with all of these areas. But we think it can work. It will take a lot of effort, and it won't be easy, but we think the American ingenuity and determination to be fair and efficient in the enforcement will carry the day.

LEHRER: Speaking of fairness, what about the idea that the amnesty program, what it's really going to do is flush out a lot of the illegals. You all will just arrest them and deport them.

Mr. NELSON: No, I think the amnesty part, Jim, is a very important balance to the whole program. While we're going to enforce the law to keep illegals out, we're saying that those who've been here since 1982, roughly five years, who have had continuous residence, who do not have criminal records, who are not public charges, can qualify to become permanent residents, and later citizens. Bring them out of the shadows, where they're living a tough life and being hurt. Now they can come out. And we think that's a very generous act by the American people.

LEHRER: But let me be specific. Let's say a person comes to your office and says, "I've been here since 1981, and here's my proof." The INS looks at it and says, for whatever reason -- legitimate reasons -- I'm sorry, this doesn't prove it. We're going to deport you." I mean, is that the process? In other words, if somebody willingly comes to your office and then for some reason can't prove that they have been here since 1982, are they subject to arrest and deportation?

Mr. NELSON: Well, they are, but I think there are a lot of steps before that. The important thing is that the person can come forward or not, as they choose. There also will be a lot of contacts, preliminary contacts, with church and voluntary groups, so they don't even need to come to us preliminarily. When they do come, of course, they do have the burden of showing they're here -- they've been here the requisite time -- but we're going to be fair and reasonable. And again, good judgement, common sense. We think this can work and will, and we encourage people who have been here the requisite time, the five years, to come forward, come out of the shadows, and become good Americans.

LEHRER: So you go into this whole thing very confident, do you not, Mr. Commissioner? This thing can work?

Mr. NELSON: I do, Jim. Though certainly not without recognition that there are difficult areas ahead. But the provisions are fair, they're balanced.It's the kind of immigration policy this country had needed for a long time. Presidents Ford, Carter and Reagan have all supported it. It's passed the Congress by a very high majority, including a lot of Hispanic members. The Hispanic citizens in this country, by well over 50%, support these provisions. So we think they can work, and with the determination of the Immigration Service and other agencies and the American people, that they will work.

LEHRER: Thank you, sir. Robin?

MacNEIL: The new law was passed in Washington, but, as Tom Bearden pointed out, its effects will be felt most keenly at the state and local level. So we turn not to two politicians who will have to live with and help implement it: Governor Toney Anaya of New Mexico, who joins us from public station KNME in Albuquerque, and Brian Bilbray, incoming chairman of the county board of supervisors in San Diego. He joins us from public station KPBS.

Governor Anaya, how do you feel the law will work?

Gov. TONEY ANAYA (D) New Mexico: I don't think it will. The only good provision is the amnesty provision, and you've already discussed some of the problems that are going to be encountered even with that. The main problem is going to be with the so-called employers sanction. It's not only going to be onerous to the Hispanics -- and I'll come back to that in a second -- it's going to be very onerous to the business community. I think we're going to see over the next several months, over the next year or two, as the provisions get implemented, I think you're going to see a hue and cry from the business community from the hotel owners and motel owners and restaurant owners, construction industry and on down the line, because of the records that they have to keep. They're kind of caught in a double pinch. On the one hand, if they don't enforce the law themselves, they're going to be subject to penalties from the Immigration Service. If they do try to enforce the law, they're liable to put themselves in a position where they're going to be facing having to defend themselves against anti-discrimination lawsuits from the individuals themselves that they don't hire. So I think that in itself is going to create such a terrible burden on the business community that we're going to see some clamor immediately for changes on those provisions.

MacNEIL: What about the -- if it's such a burden, in your view, is that going to encourage the business community, as was suggested in the tape piece earlier, just to ignore it?

Gov. ANAYA: Well, that's where they get caught in a pinch. If they ignore it and the Immigration Service catches up with them, they're subject to some heavy penalties. If they don't ignore it or they overstep their bounds, they're liable to find some lawsuits from individuals that they don't hire. The Hispanics are the ones that are going to be both the beneficiaries, because of the amnesty provision, but yet, the legal immigrants, the individuals who not only immigrated here legally but who were born in the United States, are going to be the ones that bear the brunt. They're theones that look foreign, sound foreign. They're the ones that are going to walk up for a job and may well get denied a job simply because of their looks or their speech. I think we're going to see a horrendous impact on states like New Mexico, where we have approximately 35 to 40% of our population being Hispanic, all the states along the border in the Southwest. But not just limited there. I was recently in a number of other states in this country. Massachusetts, for example, as a tremendous Hispanic community. Hispanics all over this country and other minorities are going to bear the brunt. They're going to have a tough time finding jobs.

MacNEIL: All right. Back now to San Diego. Mr. Bilbray, from the county level, what are your concerns? Do you think the law's going to work? Do you not think so? What are your concerns?

BRIAN BILBRAY, San Diego county supervisor: Well, our number one concern is the fact that we're very, very worried about the $1 billion a year set aside by the federal government to reimburse local governments for the cost of implementing this program. When we have newly legalized residents that are coming for the county and civil services, we want to make sure that the federal government addresses their responsibility in this immigration reform.

MacNEIL: Are you expecting a large influx of people onto your welfare rolls and the rolls of other services?

Mr. BILBRAY: Well, I wouldn't say welfare. We've just got to remember, the Hispanic community has a very low welfare rating, based on their economic social situation.

MacNEIL: What kind of services are you talking about?

Mr. BILBRAY: Well, we're talking about the medical services.Baseline medical services are very big here in San Diego County. We have to address those type of problems. But we're talking about, overall, the percentage of Hispanics that we have in our part of the world that may have crossed the border over the last ten years that will be asking for those baseline services. And we're just concerned that no one does know. That's the real concern.

MacNEIL: You mean people who are afraid to ask for them now, because it would reveal their -- that their status is illegal at the moment, but will feel justified in asking for them when they become legal residents. Those are the people you mean.

Mr. BILBRAY: Yeah, that obviously will have an effect. And in reality, I donht think anyone knows just what the impact is. And that safety net of federal funding for those programs are critical. Because if there isn't enough money, it will not only affect the services provided to the newly legalized citizens, but -- I mean, residents -- but it will affect our legal residents or citizens who need that safety net under them too. So you know, we're sort of getting caught in a catch 22. We don't want to cry wolf, but we want the federal government to be aware of the magnitude of this issue and just how bad it could get if it isn't addressed and it isn't maintained. And I think our biggest concern is, the federal government has to recognize that they can't sit back and think that they have settled this issue. We're looking at a dynamic situation here that is going to change every day. And the federal government has to have a system to where they can modify and amend to address those changes. We really need a federal program that is sensitive enough to this program to handle it properly.

MacNEIL: Let me ask both of you, starting with Governor Anaya, on the stopping illegal immigration, you heard the opinions expressed earlier. Governor, what do you think the effectiveness of this new law is going to be in slowing down or stopping illegal immigration?

Gov. ANAYA: I don't think it's going to slow down visibly at all. I think that the main problems, as have been alluded to, are the problems in the sending countries -- the countries that send us the illegal immigrants. And they're basically twofold. One is economic, and until those economic conditions get changed there, either unilaterally or bilaterally with the help of the United States, you're not going to see any visible change in the numbers of illegal immigrants.The other problem is the civil unrest, a lot of which this country is fomenting, and particularly in Central America. Until we address our foreign policy and the economic policies of those respective countries, no law, and certainly not this one, is going to do anything to really impact on the illegal immigration problem.

MacNEIL: Mr. Bilbray, what's your opinion of that? You're right on the border there.

Mr. BILBRAY: Yeah. Well, growing up on the border, I've had the chance to actually communicate at length with immigrants coming up. And I have to say that the political situation isn't anywhere close to having the magnitude on immigration as the economic. And I think that we need to address not only the magnet -- the jobs and the attraction we have in this country -- but we have to really look at the negative element that we have in Latin America. And I think that's going to take not only United States being aware and being serious about addressing the issue. I think that this is a two sided issue -- that our brothers to the south have to address their economic problem seriously. There is a degree of problem here with the fact that we're being used as a safety valve. And the victims of all this are the people who are just trying to feed their families and get a better way of life. And I think it's time that both sides of the border take a comprehensive approach at this and start looking at this as the true problem it is and the magnitude we have. It's going to take a long time to really cure this. It's not going to be just one law or one plot of money that really nails it down.

MacNEIL: Well, thank you, Jim?

LEHRER: Yes, let's go back to INS Commissioner Alan Nelson. What do you think of what Mr. Bilbray just said? Is he right?

Mr. NELSON: I think his comments were excellent. There's no question that there are many aspects. And the economic aspects with Mexico are important. I think we have very good relations with Mexico. We want to continue that. There is a lot of economic interdependence on the border, and that's all very important. But, as indicated, there are push factors, like from Mexico and other countries, and there are pull factors. This bill largely deals with the pull factor, so we don't allow illegals to come in because our employers want to hire them. We must deal with all aspects of this issue. There's no single solution, but the immigration bill is a major step forward.

LEHRER: All right, let's talk about the pull facts, the poll aspects, as you discussed. You heard what the governor said -- that the business community's going to find this onerous. How do you respond to that?

Mr. NELSON: Well, not really. When you look at business in America that withhold taxes and have Social Security payments to make, personnel records, health costs, the form we're talking about is a one page form for the employer to fill out, look at several documents, and for the employee to fill out, stating that they're legally here. Very simple procedure.

LEHRER: What kind of documents does an alien have to show or a citizen have to show to prove he or she is not, in fact, an alien?

Mr. NELSON: I think that's a good point. Everybody -- every new employee -- has to show the documentation. So it's not limited to anyone -- to everybody. Now, there are a list of documents in the bill: passports, driver licenses, Social Security numbers, alien registration cards and so forth. So there are procedures to look at these.

LEHRER: I mean, it's two of them, three of them? Isit --

Mr. NELSON: Two of them.

LEHRER: Two of them.

Mr. NELSON: Right.

LEHRER: I see. And you don't think that -- you think the business community can live with that, and that's not going to be a problem.

Mr. NELSON: Correct. It's a very simple procedure. And again, we're looking for the good faith, honest judgement of the American employers.

LEHRER: Governor Anaya?

Gov. ANAYA: I think there's a couple of points that I would pick up on here. The irony of this particular legislation is that, on the one hand, it says we're going to stop illegal aliens from coming across for jobs. On the other hand, there's a provision -- a very liberal provision -- that says we're going to permit growers to replenish their agricultural needs -- their labor needs. And that's really the --

LEHRER: I meant to the specific point that the commissioner had just said about the -- you had said that business will find this onerous. He says no, that's not so, that it's a very simple form, and it will not be a problem.

Gov. ANAYA: I think there's two problems with that. One, every American, when they have to start proving that they, in fact, are legal Americans, I think they're going to themselves be in an uproar. Can you imagine anyone who has not had to prove that they're an American suddenly have to step forward and, with whatever documentation, demonstrate that they, in fact, are legal Americans. I think you're going to hear a hue and cry from them. But I would disagree in terms of the burden that it's going to cause employers. Plus the fact that the individuals who want to evade the laws -- the employees who are seeking employment -- they just simply have to go down to the corner and pick up a false ID. It will probably cost them a couple of bucks, and they're on the payroll.

LEHRER: And you just don't see that as a problem, Mr. Nelson.

Mr. NELSON: Well, I donht say that's not a problem, Jim. But I think it can be controlled. Again, we have to look at --

LEHRER: Now, who's going to control it?

Mr. NELSON: Well, we have to, first of all, most Americans and most American employers want to comply with the law. They also have a patriotic duty. Let's hire American citizens and legal aliens, simple as that. Generally, the employer knows pretty well who's legal and who isn't, and I think that's the key to it.

LEHRER: All right, what about Supervisor Bilbray's point about no one really knows yet the impact this is going to have on his local government and everybody else's local government. And he wants you all, the federal government, to remain very flexible. Is he going to get his wish?

Mr. NELSON: Well, I think this bill does exactly that. We're putting in some $400 million extra into immigration enforcement. Another major provision that goes right to the county and states' concerns is what we call the save provision, which means that any alien applying for welfare unemployment will have their status checked, so that they don't draw benefits that they're not entitled to. This will save states and counties millions of dollars.

LEHRER: What about his -- does that make you feel any better, Mr. Bilbray?

Mr. BILBRAY: Not necessarily, because you've got to understand, we have different laws in different states. And there are guaranteed rights in the state of California that aren't directly tied to the federal situation. So we are --

LEHRER: Give me an example. What do you mean?

Mr. BILBRAY: Well, we have baseline services. I mean, somebody comes in who's a homeless individual who needs services. We will give them a check until such time as they can apply. And by law, we are supposed to be providing these funds and try to get them into a program. These are all costs that may not be reimbursed and that we're concerned about.

LEHRER: Is the federal government prepared to, if this -- for instance, Tom Bearden said in his report, and I think you said on this program before yourself, Mr. Commissioner, that nobody really knows how many illegal aliens there are. From 2 million to 12 million. That is a really big gap. What if, suddenly, amnesty -- millions and millions and millions of people come, and they flood local governments along the border. Is the federal government prepared to help these folks?

Mr. NELSON: Yes. And again, Jim, I think the answer is with a comprehensive bill, which this is, that deals with many, many aspects of it, including the aspects of the welfare and others. Overall, this bill should save millions of dollars for the American taxpayers that are now being paid because of the negative impacts of illegal aliens in this country.

LEHRER: You mean -- how does it save?

Mr. NELSON: Well, in many ways. As I say, the welfare costs, the unemployment cost, just the job displacement factor. Again, there are many Hispanic Americans, black Americans, others that are not employed, because illegal aliens are taking those jobs. So this can greatly help in many areas. Taxes are not being paid, in many instances.

LEHRER: Governor, has that been your experience in New Mexico -- that the way things work now is more expensive than it will work under this law for state or local government.

Gov. ANAYA: I would pretty much have to disagree with the commissioner's comments. Every study that has been made -- and I'm not advocating illegal immigration -- but every study that has been made, including those by President Reagan's own council of economic advisers, have concluded that the illegal immigrants who are in this country contribute far more to the economy than what they take out. They hardly ever apply for Social Security, and less than 1% apply for food stamps and on down the list. With this bill, they're going to come out of the shadows, as the commissioner has indicated. And I agree with him. They're going to come out of the shadows. They're going to start applying for these kinds of benefits. The bill has a cap -- $1 billion a year for four years. That's all it provides. And off the top will come some of the federal benefits, food stamps, Medicaid, Social Security, those kinds of benefits. And if there's anything left, then it will go to the states. But at this point, nobody knows what we're looking at. So there may well be nothing left for the states and local communities by the time we get to that point.

LEHRER: Is that possible, commissioner?

Mr. NELSON: Well, I think the key thing, as the governor said, he is not for illegal immigration. Nobody is. We have to do something about the problem. This bill is a big step forward. No one has come up with a better solution. The Congress, the President, worked on this six years. And I think it's the best step forward that we can have, and it will work.

LEHRER: President Reagan said today that this will help the United States regain control of its borders. What do you think the status will be a year from now or two or three years from now, if you're in fact correct, Mr. Commissioner?

Mr. NELSON: I think, as we all indicate, this is not a simple problem. A lot depends not only on our own situation, but the economy of Mexico and others. There's no easy answer. But again, these are the steps in the right direction. And it will take some time. We really do believe that there are no other better solutions. These are good ones, and we think they can work -- again, with the support of the American people.

LEHRER: Mr. Bilbray, you see it the same way?

Mr. BILBRAY: Well, let me say that some people may feel that it's a step in the wrong direction. But I've got to say that, being the right or the wrong direction, it is a step. And for those of us who live along the border, it's impressive to see the federal government finally take a step. Elected officials have been scared to death of this issue nationally, and probably rightfully so, because it was very volatile. But I think now that the first step's been taken, the secret's going to be directing the energies towards productive alternatives. And we need to keep the issue alive, and we've got to keep it moving. I think that the real success of the next few steps is going to really be based on how effective and sensitive federal bureaucracy can be to the human element out there.And in fact, if there was a suggestion I'd make to the President about initiating this program, it would be having a commission of Hispanics, of local citizens, of local elected officials and state officials, to sort of monitor this program and make recommendations directly to the executive branch of just how this program could be implemented more effectively.

LEHRER: Is that a good idea?

Mr. NELSON: It is a good idea. The bill has provisions for such commissions.

LEHRER: All right. Well, Mr. Commissioner, Governor Anaya, Mr. Bilbray in San Diego, thank you all three very much.

MacNEIL: Recapping the top stories on this Thursday, General Motors said it will close 11 plants employing 29,000 people. Secretary of State George Shultz and Soviet Foreign Minister Eduard Shevardnadze ended two days of arms talks without making progress. President Reagan said stories of a deal with Iran had no foundation and were endangering efforts to free American hostages. And the President vetoed the clean water bill. Good night, Jim.

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