AUTOS: 1942 Prices, But …

No one yet knows where OPA will set the ceiling price for Detroit’s new cars. But last week, OPA said flatly what prices are above the ceiling. It turned down a request of the Ford Motor Co., the first to apply for a 10-to-15% increase in 1942 car prices. The OPA suggested that Ford modify its increase, but did not say how much. This put Ford’s round-faced sales manager, John Raymond Davis, on the hottest competitive spot in the industry.

With Ford spilling out 480 cars and 770 trucks a day, Jack Davis had planned to announce his prices this week, begin taking orders. Already he has Ford’s dealers stocked with cars. As the only way out, Jack Davis announced: Ford will sell its cars at 1942 prices. But it will expect buyers to pay any increase later which OPA allows.

The Squeeze. What with OPA’s price policy and the United Auto Workers-C.I.O. wage demands, the auto industry didn’t know which way to turn. With a grim smile at Ford’s dilemma, President George Christopher of Packard said, “It is damned nice to be the first guy to produce cars, but it isn’t so nice to be the first guy to establish the price.”

Packard’s problems are just as serious. Packard’s basic wage scale, said Christopher, has increased 12% since 1942; overall production costs are up 17%. So, said he, if OPA holds firm on prices, and labor insists on a 30% wage boost, the auto industry faces shutdown or bankruptcy.

He added: “We will lose less money sitting still than operating the plants with a 30% additional labor increase unless OPA allows an increase in prices.”

Chrysler Corp. President Kaufman Thuma Keller was just as glum. Said Keller: Chrysler costs are up 20% since 1942, and reconversion from war production is costing $75 million for machinery and plants. Unless U.A.W.’s wage increase is passed on to the public, Keller predicted that Chrysler, too, would soon go broke. General Motors’ white-thatched C. E. Wilson had the same tale of woe.

The Result? In the midst of all this gloom, the U.A.W.’s smart, redheaded Walter P. Reuther stepped up with a typically procrustean solution. Could G.M., said he, with a meaning look at the entire industry, prove that it could not grant the U.A.W. increase and still sell its cars at 1942 prices with a “fair” profit? If it could, then the U.A.W. would modify its demands.

The catch in this was: how much was “fair?” By posing the question, Reuther had foxily outmaneuvered the automakers by drawing consumers into the wage fight. Automakers have little time left to prove their case to everyone’s satisfaction. Like Ford, they cannot wait too long, now that production has started. Like Ford, they may all have to sell at 1942prices—and collect any boost later. That might not prove popular with customers.