Firestone v. Mail-Order

From the moment Henry Ford gave him his first big tire order some 30 years ago, Harvey Samuel Firestone has been one of Mr. Ford's few close friends. The friendship explains a great deal about Mr. Firestone. Mr. Ford never lifts his spear without waggling it at bankers. Mr. Firestone's particular windmill is the mailorder tire. Each has a brand of individualism all his own.

Mr. Firestone's brand has never been relished by the heads of his three potent competitors--Goodyear's Litchfield, U. S. Rubber's Davis, Goodrich's Tew. Until last fortnight when Mr. Tew assumed the unpopular role, Mr. Firestone almost always took the lead in slashing prices. But so fast flew the chit-chat about their opinions of Mr. Firestone that when Mr. Firestone wrote his stockholders last fortnight that he was cutting not prices but dividends, he declared: "There has been much said, written and portrayed by cartoons to promote the thought that there is a feeling of animosity between myself and the presidents of the other three large companies. This I wish to refute. I have no personal feeling against any of them and I do not believe they have any . . . against me, for we often meet socially and are on the most friendly terms."

On "one fundamental principle," however, Mr. Firestone admitted there was and never had been "cooperation . . . cordial and constructive." That principle is the making of special brands (third and fourth grade) of tires for chain stores and mail-order houses to market at cut-rate prices. Mr. Firestone also makes third and fourth grade tires but chiefly to enable his dealers to compete. So did Mr. Tew, Mr. Davis and Mr. Litchfield until last fortnight. Then they agreed to drop the cheap lines they market under their own names, tried to coax Mr. Firestone into the scheme. Mr. Firestone would have none of it. It would be an admission of defeat in his long, long joust with the mail-order tire.

Said Mr. Firestone to his stockholders: "This new policy abandons the principle of keeping the independent tire dealer competitive in price with special brand tires sold by mail order houses and other distributors. It is impossible for me to understand why these three large companies persist in backing their special brand distributors without regard for their own profits. . . ."

The mail-order houses are determined to undersell the Big Four. Mr. Firestone is equally determined that they shall do nothing of the kind. He insists that the vendors of cheap tires misrepresent the quality of their wares. Two months ago Mr. Firestone met their lower spring & summer catalog prices. They promptly undercut (TIME, Feb. 13).

As they eliminated their own cheap lines, Mr. Tew, Mr. Davis and Mr. Litchfield simultaneously downed prices on their high grade brands. Not until last week did Mr. Firestone follow suit, and when he did, he cut his cheap tires to mailorder levels. Though the general list-price cut was about 20%, it merely brought quoted prices into line with actual selling prices. Concessions and shading had long ago made the old list-prices a pleasant fiction. Observers last week agreed that Akron's latest upheaval had done little but clear the field for Mr. Firestone and the mail-order tire to meet in single combat.

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