HOUSE UNIT VOTES TO AID SOVIET AUTOMOBILE PLANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70B00338R000300070036-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 19, 2016
• Document Release Date: September 12, 2005
• Sequence Number: 36
• Publication Date: March 1, 1967
• Content Type: NSPR

SovietAutornob lie Plant
By J. Y. Smith
Washington Poet Staff Writer
A House subcommittee en-
dorsed a plan yesterday in
which the United States would
supply at least $50 million
Lworth of machine tools for an
automobile plant to be built
in the Soviet Union.
The plan is part of the
largest East-West trade deal
ever undertaken and involves
initial Soviet. investments of
$1.2 billion.
Under it, the Fiat motor
company of Italy will build an
automobile plant which. by it-
aelf could triple Russian pas-
senger car production to more
than 700,000 units a year by
1975. Total output from all So-
viet plants by 1975 could reach
1.1 million vehicles.
The plant Itself is expected
to cost. $800 million. Of this
sum, about $350 million will
be spent to buy machinery In
the West.
The Flat company currently
plans to spend about $50 mil-
lion on direct purchases of
machine tools in the United Soviet Union to devote greater
States. An undetermined sum' resources to the production of
is to be spent on purchases consumer goods at the ex-
from U.S. licensees and sub-
sidiaries in Europe. According
to some' estimates, this could
amount to another $50 million.
The plan was endorsed by
the Subcommittee on Interna-
tional Trade of the House
Banking and Currency Com-
mittee under the chairman-
ship of Re Thomas L. Ashley
( - hin) The su cTi ommiftee
studied the deal under the
terms of a House resolution
passed last year.
The subcommittee was care-
ful to point out in its report
that establishment of the plant
-and the use of U.S. equip-
ment in it-would not increase
the Soviet Union's defense
potential. It quoted the follow-
ing statement by Secretary of
State Dean Rusk last fall:
"It is the judgment of the
Defense Department, shared
by Gen. (Earle G.) Wheeler of
the Joint Chiefs of Staff, that
a loan that would induce. the
pense of applying those re-
sources to military purposes
is in our national interest."
The reference to a loan con-
cerns t h e mechanism by
which the direct purchases in
the 'United' States would be
paid for.
Under current proposals,
the Export-Import Bank would
supply credits to IMI, an
Italian financial institution.
Fiat would use the credits to
buy the equipment. Thus
there would be no direct sales
to the Soviet Union.
President Johnson endorsed
this plan in his speech last Oct.
7 In which he enunciated his
policy of "building bridges" to
the East.
Despite the contemplated in-
crease in Soviet automobile
production, the Fiat deal and
other plans to expand produc-
tion will fall far short of put
ting a car within reach of the
average Russian.
Approved For Release 2005/11/21: CIA-RDP70BOO338ROO0300070036-9
A roved For lea e 2 5/11/21: CIA-RDP7OBOO338ROOO3OOO7OO36-9
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