Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-20
NEW AUTOMOBILE
POLICIES ADOPTED
"ControlIed Output" Is Now
WatchWord in Plan to
Curb 0versuppIy.
BY LEMUEL F. PARTON.

special Dispatch 10 Inc star.
2 DETROIT, March 1e.-The latest
census reports show $1,s65, 310,50s Of
capital invested in automobile manufac-
turing and a wholesale value of pas
senger cars and trucks of SO, 1852. 7ss, $50.
Against this there are only about $780,
000, COO of bonds outstanding.
On this showing, the credit structure
OF the automobile industry is stronger
than that of any other major industry.
Meat packing, the second largest indus
try, is carrying about $500, 600 In
bonds; steel bonds are nearly $500 ,0O0,-
600; the oil industry is carrying SINH
larry heavy issues. Great credit reserves
have given automobile manufacturing
a momentum and an assurance which Is
carving it hopefully through period
of depression, and they also give 1t
working margin with which to make
basic changes and readjustments.
Controlled Output"
controlled output is the new slogan
for 1880. but many sheaves of lead PEN
ellis are being worn out on the problem
of controlled distribution also. In the
past not only automobile manufactur-
ers but others have met reactions by
evangelical campaigns among dealers
and distributors. The method has oeen
10 get JIlC UOyc bOSCbAACA ~ -
or high pressure sales conference ana
infect them with a man-eating terocity
calculated to let no helpless buyer
+. escape.
Decentralization had the effect OF
sudden distensions in sales channels.
! Any one concerned with nationally
. merchandised products knows tnat
! along about last September there WASH
a sales manager in the United states
who wasn't looking for an eighteenth
story window to Jump out OF.
The new policy of the automopile m
Siustry laws aside the bull whip and Will
no longer depend upon the high-pres-
sure statesmen of the industry to warm
up the dealers. The industry suddenly
faced the fact that prices couldn't oe
lowered and sales volume maintained by
shaving dealers discounts
Dealers' Problems.
Among the $4,000 dealers in the
United States, there has been conslo-
cradle decentralization during the last
few months and an increase IN the
practice of "bootlegging" new cars
that is picking them up from forced
sales or from individuals wanting TO
welsh on a contract at less than the
wholesale price The dealers had to be
Seared into the unified manufacturing
and distributing process, with more
sympathetic understanding OF their re-
Quirements for security in their Dust
ness This is being done, and 1t con-
stitutes one of the most important re-
adjustments in the industry.
Warren z. Grifnth, former president
Of the National Automobile Dealers AS
ISOLATION, in conference with leaders OF
the industry, has formulated the imme-
date requirements for sound dlstrlou-
ton as follows:
The factories to keep production lust
under consumption, with complete
abandonment Of the OLD pracClce OF
overlooking dealers.
81 The return to the closed territory and
4, the abolition of the open territory; deal
erS to have exclusive right to their own
territories, this being directed mainly
at the bootlegging industry. -.
Factories to allow the disposal OF un-
sold cars at the end OF the year at
elimination of the feet buyers dis
count, giving the small dealer better
chance to compete.
Fewer Model Changes.
That virtually outlines :he new dis
/. tributing policy, with the exception OF
fewer model changes There is much
difference of opinion about this. Alfred
Reeves, general manager Of the National
Chamber of Commerce, dissents sharply.
Model changes are necessary and
. will keep on" said Mr.. Reeves. I'm the
past the cars which haven't changed
models have been compelled to quit;
!. that's all there Is to it. No line can
: stay In business without frequent model
changes"
Mr.. Reeves cor1curred in the view that
the industry could not ignore the needs
+. copyright. 1907