Slowdown in Detroit

What's wrong with the auto industry? Since one in seven U.S. workers depends on the auto industry, Detroit's slowdown is largely responsible for the drop in steel and dozens of other important industries, and is one of the prime reasons that the nation's economic recession has gone as far as it has.

February auto production totaled 393,000 units, the lowest for any February in six years. Production rose slightly last week from its lowest level of the year, but several plants announced layoffs and cutbacks. Not all companies have been equally affected, but a comparison of 1957 and 1958 production between Jan. 1 and Feb. 22 shows a big drop for all:

1957 1958

Chrysler 225,347 90,989

Ford 331,673 221,787

G.M. 519,589 444,588

1,076,609 757,364

With sales down about 25% from last year, dealers' stocks of unsold new cars stand at an estimated 900,000, a disturbing 167,000 above last year. Gloomier prophets are predicting sales of only 4,800,000 cars this year, v. 5,982,342 in 1957. The more optimistic feel that the unusually hard winter weather helped cut sales, and that balmy spring airs will bring an upsurge.

Faith v. Doubt. Buick Boss Edward T. Ragsdale, who set off last week on a nationwide tour of 26 cities to enlist the aid of Buick's 3,500 dealers in "a crusade for confidence in the nation's economy," thought he had the reason for the slump.

Said he: "The country is putting off buying because of doubt about the future. But the money is there. We have to get people to start spending."

Doubt about the economic future is certainly a prime factor, along with complaints that prices are too high, cars too big and too little changed from last year. Finance companies are more choosy about making longterm, 36-month loans; the shorter payoffs require higher monthly payments than many people are willing to take on.

But the biggest trouble, as many auto dealers admit, is that the dealers themselves have not been scared enough to go back to oldfashioned, aggressive kind of selling they once knew. An Indianapolis businessman, in the market for a new auto, gave his name to three salesmen at the January auto show; not one ever called him. Says Warren Carmical, general manager of a Dallas Buick agency: "The trouble is that auto salesmen have had it easy for so long that a lot have forgotten how to work."

Teddy Bears & Toasters. While some dealers still concentrate on gimmick selling by offering everything from toasters and Teddy bears to phony trade-in allowances, most have dropped it. They have found that the public no longer really believes many auto ads, no longer is lured in by gimmicks alone.

Dealers who go in for the old hard sell find the effort worthwhile. By having its salesmen rustle up prospects by phone calls or through friends, hustle out and make personal calls on them, San Francisco's Ellis Brooks Agency sold 40 more Chevrolets in January than in the same 1957 month.

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