Gloomy Gus to the Contrary

The first cut in steel for autos, television sets, stoves, etc. was made last week by the National Production Authority. Said NPAdministrator Manly Fleischmann: starting April 1, producers of durable consumer goods will have to get along with 20% less steel than they used in the first half of 1950; after July 1 the cut will be 30%.

Despite the cut, Fleischmann said that durable goods would continue to roll off U.S. production lines "in most instances at levels never attained before 1949 and 1950." Even the pace-setting auto industry will not be as hard hit as many a Gloomy Gus had predicted.

In the first two months of 1951, automakers turned out 986,000 cars, v. 876,000 in 1950 (when the Chrysler strike cut production). Thus the steel cut--and the reductions in copper, aluminum, zinc and other metals--would still permit the industry to turn out plenty of cars. Automen and Government officials alike thought that the auto industry this year could make almost as many cars as it did in 1949, when 5,119,466 cars reached the market. Even the gloomiest of prophets placed output in 1951 at no fewer than 4,300,000 cars, more than 1948^ output.

But some of the trimmings will be eliminated--and prices higher. Automen think that they will be permitted to thaw their frozen prices about 5% when Price Stabilizer Mike DiSalle brings out his new "profit margin" formula.

Last week the Office of Price Stabilization put ceilings on all used cars, by freezing them at "guidebook" (i.e., dealers' standard price) levels. Under the OPS order, if the guidebook price is higher than the new-car price, the new-car list price applies. The order is also intended to stop the practice of some dealers' driving new cars a few miles in order to call them "used," then selling them for more than the ceiling price. The only car now selling for more than list price in Detroit lots is Cadillac.

This file is automatically generated by a robot program, so reader's discretion is required.