MOUNTING COSTS

Gisborne Herald, Volume LXXIV, Issue 22339, 26 May 1947, Page 2

MOUNTING COSTS

NEW MOTOR CARS CONDITIONS IN U.S.A. QUOTA REDUCTION CRITIC (P.A.) AUCKLAND. May 26. Because Government officials had refused to overlook an import control technicality 156 buyers who could have owned a 1947 post-war American motor car may be disappointed. This was mentioned by Mr. Dewey W. Smith, executive vice-president of the Studebakcr Export Corporation of the United States, who arrived from Sydney on Saturday to attend a conference of motor dealers at Christchurch. Shipment Nine Days Late A shipment of 156 cars ordered by New Zealand dealers as part of the 1946 quota arrived nine days after the deadline allowed by the import control department, said Mr. Smith. Without considering the shipping problems and other circumstances which made it difficult to export cars from the United States to schedule, the officials deducted the 156 models from the dealers’ quota for 1947. “I think this is very unjust,” Mr. Smith continued. It did not worry his corporation, he said, but it was a terrible blow to the dealers who had- had a lean time during the war when their businesses depended mainly on repairs. Similar technicalities had cropped up in other countries, but they had been waived by more sympathetic officials. Dealers were continuing to protest against the curtailment of the 1947 quota. The matter would be fully aired at the conference in Christchurch. Mr. Smith said he would make personal representations to the Government in Wellington to have the quota restored. Hopes for an early reduction in the price of new motor cars were dashed by Mr. Smith because of the cost of labour and the shortage of materials.

Huge Sums Lost

All manufacturers in the. United States, he said, had lost huge sums of money. In the case of his own corporation, which had not shown an operating profit until the first quarter of this year, the deficit amounted to about £9,000,000. A month ago the corporation agreed to pay its workmen, who total about 12,000, and extra 12 cents an hour. This would add almost £25 to the cost of each car at the present rate of production—a figure that would be about trebled when vehicles were sold in New Zealand.

The automobile business in the United States depended for its financial success entirely on the volume of production, which had been_ hindered since the war by a lack of materials. His corporation’s plant at South Bend, Indiana, was •‘geared” to make 1200 to 1500 units a day, but at present only 800 were coming off the production line.

Steel, copper, and tin were in short supply, but he expected that the firstnamed item would be more plentiful now that the steel workers had signed an agreement not to strike for two years.