Business: Motor Quotas?

In Paris last week gathered motormakers from all parts of Europe. Great secrecy shrouded their conclave, solemn pledges of silence were taken. But the purpose of the meeting was neither unknown nor new. For several years European manufacturers have considered limiting Europe’s imports of U. S. cars but have never been able to agree on the means. Never has there been the necessary government support for the movement until the new, higher U. S. Tariff evoked talk of reprisals throughout Europe, direct reprisals in Italy and France. Last week’s meeting found the European motor men nearer agreed, prepared to ride together on a favorable tide of public sentiment.

The weapon which the motor men were nearly agreed to use was the one which French and German cinemen have found effective: the import quota. Remained only to hit upon a figure which would be high enough not to hurt intra-European trade yet low enough to hamper the U. S.

A little better than half the passenger cars & trucks sold in Europe are either imported from the U. S. or made in U. S. plants abroad. Last year the figures for European car sales are estimated to have been 288,000 units against 553,000 foreign ones. To the U. S. this constitutes the fourth greatest export trade* while to automotive companies it often means the margin between profits and deficits. Of course no European nation would openly discriminate against the U. S. and thus court official U. S. action. But if Germany, for example, limited imports to 1,000 cars per year, by far the greatest sufferer would be the U. S., which last year sold 38,000 cars there against less than 5,000 manufactured by all other non-German nations.

Though approval and enaction of a quota system did not seem immediately probable last week, U. S. motormakers, anxious to offset declining sales at home by expanding sales abroad, were worried by possible spreading of the tariff wall against cars and parts. And business conditions in Europe were another source of anxiety. Bearish items of the week included the dismissal of the entire production staff (600 men) from the Ford plant in Spain.

*First in 1929, unmanufactured cotton: $770,800,000; second, machinery: $612,700,000; third, petroleum: $561,200,200; automobiles and accessories: $539,300,000.