Evening star., 1924-09-27
WATCHPRODUCT|ON
IN AUTO INDUSTRY
Makers Report Improvement
in Business, But See Need
of Great Caution.
BY J. G.. ROYLE.
Special Dispatch to The Star.

Special DiSnatch 10 ne star
DETROIT, September 27-The au
tomobile business is picking up. Sat
isfactory evidence of that is visible
in many quarters of this great manu-
featuring section. 1t is equally ap-
parent that automobile manufactur-
erS are not going to make as much
money as they did in the banner year
Of 1928
In fact. even those companies which
have shown a satisfactory profit in
the early part of the year or for the
nine months to date are not sure Of
holding on to those profits. There are
enough cross currents still running
to swing even the stronger concerns
toward danger. Another sharp slump
in demand during the next three
months might not only obliterate the
profits of the last quarter of the year,
but wipe out many of the gains of
the first three quarters.
Costs and Profits Balance.
Each quantity manufacturer has a
point of production where costs and
profits exactly balance. If the unm-
Der Of cars made each day falls below
that point there not only are no
profits, but overhead must inevitably
make terrific inroadS on surplus.
profits exactly balance. II the num-
facturer, with fluctuations of ma
terial markets, and from day to day.
During the last bad slump, however.
experts figured out that the Ford
company could make $500 cars a day
and break even, whereas they would
be making a handsome profit at pro-
duction of 5000. That may not repre-
sent the Ford ratio today. but the
point in production where profit
ceases and heavy loss begins exists
for Ford as well as for other COM
panies.
slump Would Wipe Out Profits.
If, therefore, a slump should come
in the next three months, attended by
heavy drop in production, much of
the gain piled up by the quantity pro-
ducers would be wiped away. Never
helesS, there is decided optimism
apparent here with regard to Fall
and early Winter business. Ford pro-
duction this month will reach abb 1t
153. 900 cars, it is estimated. The COM
today, and will do SO on succeeding e
saturdays, although it has been on a
five-day-a-week schedule since Sum-
mer. The improvement in outturn at
the Ford plant found an Immediate
reflection in the activities of makers
OF parts. These have also begun to
add to their pay rolls. The Buick
works are running strongly, COM
pensating to a considerable degree
, , for less business for some other
General Motors subsidiaries. The
Paige factory shows signs of in
creased activity and so do many other
plants here.
One sure sign of this trend is the
| number of automobiles parked about
the plants. for 81 to SO per cent of
the workmen employed in many of
l e.
In them.
Keeping Production Down.
Two concerns have not jumped up
their production schedules and they
are among those companies in the
strongest positions. The Dodge
| Brothers have maintained steady
pace all year. So have the Hudson
and Essex plants, and each has done
remarkable amount of business.
Experts here point to the Dodge rec
ord to substantiate their declaration
that the habit of piling up a reserve
stock Of ears for the spring trade has
gone forever. The Dodge Brothers
did not do this last winter, preferring
to take a chance of making custom
ers wait rather than load themselves
and their dealers down with heavy
stocks of manufactured cars.
Years. Business Smaller.
Other manufacturers did SO and
suffered severely in consequence. The
quality producers, who make cars
comparatively few in number and
high in price, in general have had a
good season SO far. but the figures on
the right side of the ledger at the
years close probably will be well un-
der those of 1928. Margins of profits
have been smaller, and in some cases
medium-p priced cars make inroads in
sales volume.
Truck manufacturers have little to
complain of. except the number OF
customer notes they have on hand
Sales have been we'll maintained.