As Predicted

Kaiser-Frazer Corp. stockholders had one consolation: nothing had been kept from them. When K-F President Edgar F. Kaiser reported a $5.8 million loss for the first quarter, he had predicted further trouble. Last week, K-F reported a second-quarter loss of $2,300,000 (v. $3,900,000 net in the same 1948 period).

The trouble, said K-F, had been high-cost inventories, high overhead, price cuts, and a strike at Bendix Aviation Corp. which had stopped K-F production for two weeks. But K-F's real trouble was that the auto shortage was about over, and its share of the market had slipped from 5% in 1948'$ first half to 2% in 1949's.

K-F feared it would lose money the third quarter too, so it was pulling in its horns. Last week, besides scheduling a ten-day shutdown to let sales catch up with production, K-F sold two iron and steel plants at Phoenixville, Pa. Buyer: the Barium Steel Corp. Price: more than $2,000,000.

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