Evening star., 1933-04-03
AUTO EXECUTIVES
AID CITY FINANCING
Various Firms Have Helped
in Advancement of Michigan
municipalities.
BY EDWARD w. MORRISON.

Special Dispatch to The Star.
DETROIT, April 3.-The entrance
Of the General Motors Corporation
into the Detroit banking field, as q
partner with the Government, has
served to bring into relief the way in
which the big automobile companies
have found their affairs intimately
woven into the economic fabric Of
the communities in which they are
located
Although Detroit in the past has
generally been considered city
created much by the genius Of Henry
Ford, events of the past three years
have emphasized that other companies
as well have a huge stake in the Mich
igan industrial district. Ford, General
Motors, Chrysler, Hudson and a dozen
others stand out as the fibers that
form the Michigan business pattern.
When the new national bank was
formed, it happened that General
Motors took half the stock; the Gov
.ernment took the other half. Alfred
P. Sloan, president Of General Motors,
was frank to admit that his corpora
ton had no desire to get into the
dispose of its stock in the Detroit in
stitution. Nevertheless, he said, Gen
eral Motors desired to satisfy the i'm
mediate need for banking facilities in
Detroit; it was animated by purely
public-spirited motives.
Aid Municipal Programs.
Ford, Chrysler and General Motors
all were invited to subscribe the capital
to the new $25, ,000, 600 bank, but IN the
end the entire subscription was taken
by General Motors SO that there might
not be any conflicting elements aftex
the bank began operations.
But General Motors has not been
alone in recognizing its civic obltga-
tions. Administrative officials in Mich
igan cities are accustomed to calling on
automobile executives for help In mu-
nicipal advancement programs. Men
such as Mr.. Sloan, Walter p. Chrysler
and the Graham brothers, who spend
part Of their time in New York, are
jealous of their interests in Detroit.
Automobile companies have not left
the entire welfare burden to the city
of Detroit in the last two years, stagger-
ing as the load placed upon Detroit has
been. The Chrysler Corporation has
boaSted that not a one of its employees
ever reached the Detroit welfare rolls
Chrysler has attempted, in the mean
time, to knit all its plants closely to-
gether SO that employees idle in one
plant can be shifted to another where
their services can be used.
Ford has devised means OF carrying
some Of the relief responsibilities that
otherwise might fall on the shoulders
OF Dearborn. Chevrolet. to cite another
example, has been able to adjust its
working program SO that there have
been few periods Of long enforced Idle
ness for employees. The Fisher Body
Corporation has given the city Of De-
troit the use of at least one OF It's plants
for housing homeless men. A long list
Of accomplishments could be cited to
the credit of smaller corporations.
The automobile industry has operated
under distinct handicaps as the pur-
chasing power Of the Nation has de-
clined. Last January, according to
figures Of the Federal Reserve Board
business as a whole was So per cent OF
normal. while the automobile industry
was only 35 per cent Of normal.
Automobile factories are In position
Of course, to take advantage Of every
upturn in business that occurs. Cash
and commodity reserves have been built
up. Factory stocks Of new cars are 4,
one Of the lowest points in history
Cars in the hands Of dealers, including
both new and used cars, are equally
small.
Prospects Are Numerous.
The position of dealers with respect
to used cars has undergone . revision
In recent months. Faced with the
necessity of making their used car de-
partments pay, dealers have become
more discreet in their allowances
against new cars. At the same time
they are looking upon the used Cal
buyer as distinct class whose busineS,
is to be cultivated as much as the new
car buyer.
LAS old cars break down, say,
Thomas J. Hay, president and genera
manager Of the National Used Cal
Market Report, Inc, "or get too ex.
pensive to run In comparison with new
models. owners naturally become excel.
lent propects for new or good sec.
ond-hand car. There Is plenty of DO.
tentia1 business, there are millions o.
prospects among these present owners
Those driving the earlier models
particularly prior to 1927, can probably
most easily be sold on the idea of re.
investing in used cars of later style anC
mechanical improvements. At least 81
per cent and probably more of the re.
placement market business from nov
on will be done in the sale of usec
cars"
(Copyrirht 1Q331