Evening star., 1933-07-28
CAUTION DISPLAYED
BY AUTO INDUSTRY
Output Controlled Rigidy De-
spite Vast Increase
in Demand.
BY DAVID ]. WILKIE.
ASSOCIATED Press Writer.)

DETROIT, July 28.-At the season
OF the year when factory operations
generally should be confined to the
cleaning up of the raw material on hand
in preparation for new model output,
the men who make motor cars find
themselves in something of quandary.
On the basis Of current demand pro-
duction schedules normally would be
stepped up sharply, but the industry is
going through an entirely new exper-
ience in the expansion of buyer interest
in Midsummer. Uncertain. as to how
long this demand will continue, the
volume producers-and they represent
more than 30 per cent of all the out
put Of the industry-are observing no
little caution in their plans for the
immediate future.
Production for July undoubtedly will
exceed 100000 passenger cars and
trucks, but in large measure 1t will be
due to the fact the majority of fac
tories entered July behind in retail
orders.
Higher Prices Expected.
Another factor contributing to the
tendency to proceed with caution is an
apparent conviction in many quarters
that price increases are quite likely
to come after the motor car industry
has completed its recovery act code.
Just what the code will mean for
the various competing producers prob
ably will be known shortly. Meanwhile
commitments for raw materials are be-
ing limited generally to not more than
80 days in advance.
Apparently trying to anticipate some
of the clauses to be incorporated in
the code to be submitted for the motor
car industry. several producers already
have announced the restoration of part
of the wage reduction put into effect
in the last two years. A.
Former employees who have been out
OF work for many weeks, also have been
recalled by some plants. while produc-
tion proceeds on current models with
10 announcement of plans by any pro-
ducer for the annual shutdoWns that
heretofore have marked the Summer
months.
To date only q few producers have
made any reference to new model plans
and these references have been gen
orally to the effect that current demand
made it advisable to delay new model
preparations for the time being. In
previous years the final week of July
has found several producers preparing
to close down for a fortnight or more
to make changes in plant equipment
necessary to the production of new
| types.
Brief Shutdowns Likely.
| Some of the more optimistic of the
sales executives are beginning to be-
| lieve that when the shutdowns Go
| come they will be restricted to the
| length of time absolutely necessary for
re-tooling operations. Heretofore the.e
suspensions have ranged from a fort
night to as much as month in some
cases. but they have been scheduled
usually at the extremely slack pericG
of each individual factory and not il
| frequently they have extended beyont
the time normally needed for the in
staIation of new production machinerE
Not few of the motor car industry
executives are finding q double sourl
of qualification in the carrying ovt
, into Midsummer Of the upward trer
of factory operations. Some of the-
believe the industry Is just beginnir
to profit by the controlled produ
ton" policy that was adopted early
1880 when 1t became evident that
effects of the crash of the precedi
Fall would not be of short duration.
| Controlled production" has b
rigidly adhered to during the last f.
months in the face of an upward NOV
ment in consumer demand that in
other time would have inspired q
position on the part Of manufactur.
Of motor cars to throw the productic
machines into high gear.