Evening star., 1942-05-03
Auto Plant Too|inq
For Big War Drive
About Finished
Arms Output Likely
To Equal l94l Car
Activity by Midyeor
Special Dispatch TO The Star.

Special Dispatch 70 The Star.
NEW YORK, May 2-Great
progress has been made by the
automobile industry in converting its
plants to the manufacture of war
goods since the ban on production
of passenger cars and light trucks
for civilian use became effective
February l. Standard & Poor's Corp
points out in a survey of the auto
mobile industry.
According to the managing direc-
tor of the Automotive Council for
War Production, the industry has
now reached a point where the job
of tooling up is substantially COM
pleted. 1t was further stated that
production of each war item which
the industry has been called upon
to manufacture is either now under
way or about to begin and that the
goals set for the industry will be
attained
In February alone the industry
turned out 100000 worth Of
military equipment. or q per cent
of the entire 1941 war goods produc-
ton Of the industry. Although this
war far below the 100000 900 peak
month of automobile production last
year. it represents substantial prog
ress and points definitely to much
higher production rate in coming
months.
BY mid-1942 the value of output
should approximate that of the cor
responding 1941 automobile pro-
duction. In subsequent months the
record peacetime dollar volume will
be exceeded. assuming that sufficient
supplies of raw materials and labor
are available, and that transporta-
ton facilities will be adequate.
Armament Backlog Huge.
Since the outbreak of war with
Japan huge new orders for virtually
every type of military equipment
have been awarded to the industry.
While the Government is no
longer making public individual
contracts. it is believed that total
business now on hand Is at least
close to 100000, 900. Most of
this is for planes and parts. tanks,
and military cars and trucks These
are the products for which there is
greatest need, and for the produc-
ton of which the industry can
supply the necessary technical
knowledge and some manufacturing
equipment. AS the plants Of those
organizations which found it diff
cult to shift to war work are con-
verted, production Of miscellaneous
military goods will rise sharply.
While passenger car builders have
been forced to completely revamp
production procedures and facilities,
truck manufacturers have been af-
fected to a much lesser extent. Light
truck production ceased at the end
of January. but production Of me-
dunn trucks (9,000- -16, 900 pounds,
gross weight) has been allowed to
continue until April 80. to complete
February quotas. Moreover. output
of trucks weighing more than 49,
600 pounds will continue until March
quotas are filled, but not later than
May 81.
Even with the ban on light truck
production, which normally accounts
for about As per cent of total truck
output, the manufacturers affected
have had little difnculty in keeping
their facilities employed. Military
truck requirements alone have
supplied manufacturers with a sub
stantial backlog Of orders and these
have offset a good part OF the loss
or normal output.
The bulk of the trucks required
by the armed forces are those with
a carrying capacity of III tons. OF
more and a good percentage are In
the 5-ton or larger category. With
the added necessity of supplying war
industries with adequate trans
portation facilities, a large volume
of business Is assured. Hence. opera
tions in this division promise to be
close to capacity.
Earnings Generally Lower.
Considerable variation will be
shown in the sales experience OF
individual manufacturers In the cur
rent year, depending on the type
of war work involved and the speed
with which the change-over from
normal operations to war work is
completed.
Generally speaking. those pro-
ducers whose output involved the
least departure from normal oper-
ating procedure can be expected to
make the best sales showing. Such
concerns include makers of scout
cars, various military trucks, per.
sonnel carriers and half -tracs. Man.
ufacturers of such lines as tanks
and aircraft. which require the con-
struction Of special plants and in
stallation of new equipment, will be
handicapped for time, but ulti-
mately they will report substantial
sales volumes.
Sales of the large manufacturers,
who have been compelled to make
extensive shifts in operations, will
be of sharply in the first half of
1912, but they should show consider
able improvement In the last half.
1t is uncertain, however, that this
improvement will be sufficient to
offset the poor showing in the first
half, so that sales for the full year
will probably be at least moderately
under the exceptionally good 1941
totals.
Profit margins on war business,
generally, will not be as good as
those obtained from normal opera
tions, particularly in the case of the
largest manufacturers, although the
latter will be aided, as output ex-
pands materially, by the economies
flowing from mass production. Any
drastic profits limitation on war con-
tracts, obviously, would also hit the
largest producers hardest, since
margins of some of the smaller
manufacturers have been narrow
even under normal conditions.