Facing some intense competition for its long-held spot as the world's top automaker to Japan's Toyota, General Motors' (GM) top executive reiterated late on Friday the yen is still undervalued on world's currency markets.
"I think, in the next five or 10 years, the bias is for the dollar to weaken and all the basic economics suggest that it should," GM chairman and chief executive Richard Wagoner told reporters during an impromptu press conference after the financial markets had closed in the US.
US automakers have cranked up a major campaign focusing on the what they describe as the undervalued yen, Wagoner said.
From GM's perspective the yen at 114 is a lot better than the yen at 120, he said.
"That's good," Wagoner said, adding the yen's true value was somewhere in the range of 90 to 100 to the dollar.
"It would be a huge change in the competitiveness. I think my colleagues in Europe would agree as well," he said.
"It would dramatically level the competitive field if we saw the yen at 90 to 100 range," Wagoner said.
"I think a couple of things could happen. If the yen strengthens, I think the dollar and the euro might be more stable. I think it would make the Europeans feel a lot better if we saw some adjustments from the Asian currencies particularly the yen."
Wagoner also said it could halt the flow of manufacturing and auto jobs out of the US.
"I think the US has become somewhat more competitive and as we look at the strategy of global architecture and integrating our capacity, it does offer some opportunities if we get our costs in line," he said.
Wagoner also said he was pleased the Federal Reserve Board had elected to cut rates since auto sales have been sluggish for the last several months.
"We're continuing to run below trend demand here at the retail level in the United States, but I'm not sure where we are today so I can give you a convincing case when that's going to come back," Wagoner said.
However, Wagoner declined to say whether the recent disarray in the financial markets would have a negative impact on GM's ability to transfer its huge liabilities for employee healthcare to a new independent trust, clearing them off GM's own balance sheet.
The fallout from the credit crunch has hurt GM's own mortgage financing business, which is now operated with Cerberus, the New York-based private equity firm.
"We do have a very strong liquidity position," he said. "It's not the best time to go out a raise money," he said.
"The liquidity has come in the last couple of days. The discount rate is done. It had gotten to the point where it was disruptive and [the Fed] reacted to that," he said.
"People won't buy even prime credit jumbo loans," he said. "It was hard to find people to buy high rated paper. I don't think that's unique to GM. That market has significantly closed down."
"That's highly unusual and not constructive to the economy when prime credit is not available for housing, which drives the whole economy. It feels like it's temporary situation," he said.
"Obviously people are retrenching and my sense is when these adjustments happen, people tend to overshoot on the downside," Wagoner said.