Evening star., 1927-04-20
AUTO MAKERS PLAN.
CUTTING EXPENSES.
Production of Part of Their
/ Raw Material Idea Cleaned
N I'll From Ford Policy.
BY j. G. ROYLE.
aNantai nisnats.h In FTna Sls,


NEW YORK. Aprta so.--The auto
mobile factories of tire United States
will turn out $50 900 cars this month.
This Is q, conservative estimate reach
ed by motor TRANSPORT engineers.
Moreover. these factories are going TO
sell 5s0,000 cars within the next six
weeks. Who makes the cars is, of
course, OF intense interest to the stock
holders OF the companies involved.
But the main thing that affects the
prosperity of the country as a whole
ssfthat the raw material demand. i'm
Guiding steel copper, zinc, textiles,
rubber. lumber and other products,
VIII reach a peak which has not been
equaled more than once or twice in
the history Of the Industry
The buyers OF tFfese cars. which are
now travelling down the runways to-
ward the ultimate Feceiver are going
TO get them at q price that means
more value than has ever before been
offered 10 automobile users. That fact
has produced a new trend of thought
and policy in the automobile industry
which has not yet become apparent to
the public, but Which is thoroughly
recognized within the trade.
Must Ont Costs.
Automobile manufacturers are real.
fling that they haze to cut costs rath-
er than prices. A5 result. at least
one big producer already is cousid.
ering the buyina or building of a
sheet steel mill in the district between
Mahoning Valley and Chicago. Nego-
Nations have not vet approached the
point where officials in the companies
involved can outline their plans. But
the purveyors of electric power in
a TOT t,-V~ L.
20 their ability to furnish current
for thoroughly electrified plant and
have outlined figures as to The rates
which they are prepared to maintain
Throughout period OF years.
Ihe trend has gone even farther.
One OF the largest paint mauufactur,
ers in the world discussed the trend
with the writer today. His company
has furnished &~lshes for millions Of
automobiles.
Il hear that Die of the big COM
panies is about ID buy control of a
paint and varnisn corporation which
can ship advantaseously to Detroit, Z"
ne said, I'VE have to recognize the
trend in that direction If. we hone 10
hold our automobile customers. This
trend Is already evidenced by General
Motors. the stock of which is exten-
sively held by the Du Pont Co.. makers
or paints and varnishes, and by at
least two other large producers Of
naetor cars who havf acquired control
Of paint companies.@
Invade Tire Field.
The move also hae invaded sthe tire
Msid. Rubber men have complained
Tor months that original equipment
orders have been had only at prices
which left so little meat on the bone
that their teeth we're always sore.
The general feeling among the rub
ber men therefore is that it is more
advantageous to rely more largely on
the replacement trade, and if the
manufacturers desire to buy or build
their plants TO let them do so.
All automobile manufacturers have
learned lessons from Ford They see
that II might be profitable TO have a
source Of raw material supply which,
IL it viii not make them Independent
of outside producers. will at least en-
able them to arrange contracts on |
advantageous terms. This trend |
toward sharper cutting of costs is |
fully illustrated by the determination
of the Otis Steel Co.. which is negotia.
ting for the sale or lease of a fleet
OF ships on Lake Erie. which will en-
able them to send automobile parts
and partly finished products to Detroit
and bring back scrap from the auto
mobile factories in their own bottoms.