Giant & the Giant Killer

New Dealing Senator Joseph C. O'Mahoney of Wyoming likes to play the role of a giant killer with a special shillelagh cocked for big business. Since General Motors is a giant -the biggest, most profitable corporation in the U.S. -it was the logical target last week for Democrat O'Mahoney's Senate antitrust subcommittee. Ostensible purpose of the hearing: to "appraise the antitrust laws" and ascertain "needed amendments."

O'Mahoney dredged up three charges. He produced competing diesel-locomotive manufacturers to testify that a wartime order from the War Production Board made G.M. virtually the sole producer of long-range diesel locomotives. This, one witness said, gave the Detroit giant a "tremendous headstart" on postwar business, and as a result, G.M. today supplies 76% of all U.S. diesel locomotives. The next day Harold Hamilton, former G.M. vice president supervising its locomotive division, pointed out, however, that the company had actually lost ground during the war, its share of the market dropping from 67% in 1940 to 40% in 1943. Moreover, added G.M., it had ventured where its competitors had feared to tread: it spent $26 million developing diesels before realizing one cent, put up another $5,000,000 to finance sales to railroads. Next, Vice President Thomas Butler of the Flxible Co. of Loudonville, Ohio, charged that G.M. had refused to supply him with G.M. bus diesels because he was a competitor in the manufacture of buses. The order, said Butler, came straight from Charles E. Wilson, then G.M. head. Wilson, now Defense Secretary, offered to testify in rebuttal, but O'Mahoney ignored the offer.

O'Mahoney also cited G.M.'s purchase of Cleveland's Euclid Road Machinery Co., in 1953, as a grave instance of big companies "swallowing up" family enterprises. By buying out former customers, said O'Mahoney, G.M. was simultaneously providing itself with a "captive market" and depriving competitors of a customer. But Euclid's former President Raymond Armington (who now runs Euclid as a G.M. unit) explained that his family-owned company, short of money for diversification, had fallen into "a very vulnerable position" to resist big competitors. "It would be a fine thing," said Armington, "if small family companies like Euclid could continue to stay small and independent. The fact remains that Euclid has just gone into a market which required large finances, resources and facilities. But it didn't have the resources."

In the next two weeks O'Mahoney plans to summon competing auto-parts manufacturers, followed by complaining G.M. auto dealers, then wind up with top corporation officers led off by his star witness: G.M.'s President Harlow Curtice.

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