Quotas Imposed

In the big-windowed OPM boardroom one day last week, 18 automakers sat and held their breath. Ex-automaker Bill Knudsen had just told them they had to cut their production by an average 26 1/2% for the first four months of the 1942 car year, 50% for the full year (to 2,150,000 units).

But they had expected that. At length one of them asked the important question: "Do these quotas mean that the industry is to be guaranteed materials to produce sufficient automobiles to fill them?"

Up rose boyish, jut-jawed James S. Adams, OPM's automotive production head, at home executive vice president of Colgate-Palmolive-Peet, but no soft-soaper. "No," said he slowly, "you cannot get priority ratings for materials going into passenger cars." The quotas, he continued, were only a maximum. Let the industry make that many cars if it could.

Thus, in a few words, Jim Adams made mincemeat of his own elaborately worked-out quota system. Privately some OPM-ites had already said there was not enough copper for essential defense and civilian needs (TIME, Aug. 18); officially, OPM had recognized an 11,000,000-ton steel shortage for this year; the aluminum shortage was already a vaudeville joke. As far as OPM's meager statistics showed, the quotas were not only a maximum but a reverie. It was possible, to be sure, that automakers had much bigger inventories of scarce materials than they admitted. (They had enough to turn out 45,600 units last fortnight, more than twice the output in the corresponding 1940 week.) There was also a faint hope that OPM's new plans for getting real figures on short metals inventories might reveal large excess supplies (in the hands of farsighted manufacturers)* that could be reallocated.

For some of the motormakers, there was a silver lining to OPM's order: truck production was to be increased by about 200,000 units (to 1,189,000 for the model year that began Aug. 1). Manufacturers of heavy and medium trucks were to get A-3 priorities on materials (with a careful check to see that materials went into trucks, not passenger cars). But this same priority rating has not saved railroad-car builders from having to curtail production for lack of steel.

In any case, the motormakers knew where they stood. They were no longer in the middle of the OPM-OPACS feud over whether a 20% or 50% cut was called for; time had proved OPACS right, and Henderson and Knudsen spoke alike at last week's meeting. Jim Adams' passenger car quotas were precise to the smallest manufacturer. For the four months ending Nov. 30, they were:

% below 1940's 4 mos. 1941 same 4 months

General Motors 361,815 29.2 Chrysler 188,849 31.4 Ford 151,845 16.9 Majors 702,509 27.6 Studebaker 35,289 23.5 Hudson 25,874 38.2 Nash 21,972 4.9* Packard 23,056 10.3 Willys-Overland 7,768 7.1 Crosley 333 80.0* Independents 114,292 20.2 All companies 816,801 26.6

Discrepancies in these cuts were chiefly due to the fact that they were predicated on a three-year average, to iron out individual production abnormalities in 1940. (Crosley and Nash, for example, produced below average last fall.) Apart from these discrepancies, Ford got a slight competitive edge over G.M. and Chrysler (compared to their production on '41s), and the majors were purposely made to take a deeper cut than the independents. But at week's end there were no audible cries of "unfair" from any individual manufacturer.

Beginning Sept. 15, new monthly quotas will be set three months in advance for the rest of the year. Each month the cut will be deeper, to bring the year's production down 50% (about to the level of 1934). Some motormakers also planned to taper off their use of scarce materials. Thus this winter's cars may have less brightwork than this fall's, and next spring's none at all.

According to various estimates, the auto cut will almost immediately throw 90,000 to 200,000 men out of work. To meet this, Sidney Hillman, after long powwows, formed a joint labor-management industry committee to carry out a three-point OPM program. It sought: 1) "orderly transfer" (including training where necessary) of workers to new automotive defense plants; 2) transfer of workers to other defense industries in and about Michigan; 3) meshing more defense business into the automobile production line.

To make the transfer process as orderly as possible, OPM and OPACS planned to fit individual monthly quotas to the success which each plant has in transferring its workers to defense jobs. The quicker an automaker converts, i.e., the smaller his future quotas. But only by converting to defense can Detroit be sure of doing any manufacturing at all.

* Not to mention the Army and Navy. Rumor of the week in Washington: one Army arsenal was so stocked up with copper that its warehouse floor sagged a foot and a half.

* Increase.

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