U.S. Motors Abroad

(See front cover)

To foreign parts last year went 515,000 U. S.-built motor cars. To the U. S. came 566 foreign-made cars. To Washington last week went Alvan Macauley, president of the National Automobile Chamber of Commerce and of Packard Motor Co., Alfred P. Sloan Jr., president of General Motors, R. I. Roberge, export manager of Ford Motor Co., Walter C. White, president of White Co. (trucks) and other automotive men. They went at the invitation of Pennsylvania's Senator David A. Reed, head of the Senate Finance Committee's subcommittee on metals.

Their mission: To defend or to abandon the 25% ad valorem tariff on imported automobiles, as specified in the tariff measure passed by the House of Representatives and now before the Senate. Their message: That the automotive industry would be well satisfied with a 10% duty. But countervailing duties* should be maintained and the 25% duty should remain on trucks, buses.

Chief witness at the meeting was Packard's Alvan Macauley. Cool, self-possessed, quiet, sure of his facts & figures, he read from a typewritten manuscript. To what he said few exceptions were taken. First he talked of U. S. Motors, the whole huge industry. More than 4,000,000 U. S. inhabitants derive an automotive livelihood. The industry consumes 18% of U. S. steel production, 85% of rubber, 74% of plate glass, 60% of leather upholstery, 18% of hardwood lumber, 27% of aluminum, 14% of copper. Last year it was third largest user of railroad equipment, shipped nearly one million carloads of autos, trucks, parts, tires.

Coming to the tariff question, Mr. Macauley said that a year or two ago U. S. Motors would have unanimously approved putting automobiles on the free list. But now, said he, foreign makers have adopted U. S. production methods, employ U. S. engineers. Furthermore: "We have an increasing number of foreign plants, owned or controlled jointly by American manufacturers and foreign interests, the ultimate effects of which no one can forecast." Mr. Macauley felt, therefore, that a partial reduction of from 25% to 10% should be tried before any free list measure was considered. But buses, heavy duty trucks, electric motor trucks should retain their 25% protection because they are not in mass production.

Following Packard's Macauley came General Motors Sloan. Mr. Sloan appeared nervous, spoke quickly, tensely, used no notes. He endorsed the 10% position. He added that General Motors had no intention of shipping into the U. S. cars from its foreign plants, that these plants were made to supply cars to the countries in which they were located. He saw no danger of a foreign car invasion. Next came R. I. Roberge, Ford export manager. A peculiar aspect of the Roberge testimony was his insistence that he spoke for Son Edsel Ford, did not know what Father Henry Ford thought about auto tariffs. Asked why Henry Ford had not appeared, Mr. Roberge suprisingly replied that Henry Ford had received no invitation. After these qualifications, Mr. Roberge announced that Edsel Ford was willing to have automobiles on the free list. It was noticed that Mr. Roberge did not echo Mr. Sloan's statement about not importing foreign-made cars.*

Back of the automotive industry's willingness to reduce tariff walls was generally detected a hope that such reduction would stimulate foreign trade. Mr. Macauley, however, when asked about the moral effect of such a "gesture," replied that as a "gesture" he thought it would be "very weak." Kentucky's Senator Barkley (Democrat) pointed out that it was "no gesture" to reduce tariff on "something that does not matter while increasing it on things that do." Nevertheless, foreign countries must reduce their duties on U. S. cars to 10% to get the benefit of the U. S. 10% duties on their cars. And certainly every piercing U. S. automotive eye is at present turned toward Europe.

Beside the 515,000 cars exported by the U. S. last year, there were 242.000 cars made in Canada under U. S. auspices and 67,000 assembled in the 68 U. S. owned assembly plants abroad. Thus, counting Canadian and foreign-assembled cars, total U. S. exports were 825,113. Canadian and U. S. motor exports (including tires) were valued at $578.565.249, held first rank among manufactured exports.

Extent of the European market for U. S. cars is suggested by the fact that of a world registration of 31,778,203 motor cars, 24,493,124 are in U. S. territory. There is already approximately one U. S. motor car for every U. S. family. Comparatively speaking, the world market is a pedestrian paradise. Furthermore, out of a 1928 world production of 5.198,167 cars, the U. S. produced 4.358,748, or almost 85%. Thus the rest of the world has the capacity to absorb many more cars and the U. S. has the capacity to make them. The following table shows registration and production of chief automobile countries:

Registration

Jan. 1, 1929 1928 Production

United States. 24, 193,124 United States 4,358,748

England 1,128,200 France . 1,098,000 Canada . 1,061,830 Germany 531,000 Australia 516,695 Argentina 310,805 Italy . . 177,330 Brazil . . 165,200 New Zealand. 151,454

The "outside" world, with its 7,285,079 registration, has about as many automobiles as the U. S. had in 1919. There are now almost four times as many motor cars in the U. S. as there were in 1919. It is not likely that Europe will multiply its motor registration by four in the next ten years. Nevertheless, U. S. motormen feel the "outside" world is the next great world to conquer. Just as Mr. Macauley considers that he has well established the Packard in the U. S., he--and General Motors, Ford, Chrysler et al.--can do it all over again abroad.

Chief Witness, Macauley has been general manager of Packard since 1910, president since 1916. He was born in Wheeling, W. Va., in 1872. His father, James A. Macauley, was born in Ireland, came to this country at the age of 12, later fought in the Civil War where he lost an arm in battle and spent nine months in Confederate prisons. The elder Macauley was West Virginia's first Secretary of State. The son went to Lehigh University, took a law degree at George Washington University, became (1895) patent attorney for National Cash Register.

In 1901 he went to Burroughs Adding Machine Co., then located in St. Louis, as General Manager. He found that the man whom he succeeded as General Manager had left in a great rage. Soon Mr. Macauley, planning an expansion program, needed to acquire a certain alley. His predecessor had a good deal of political influence and the City Fathers would not give Mr. Macauley his alley. So Mr. Macauley took a train to Detroit, made arrangements for securing all necessary alleys and other real estate. Then back to St. Louis he went and at night, after business hours, had the entire Burroughs business loaded into railroad cars. In the morning St. Louis woke up to. discover that Burroughs Adding Machine Co. had left town.

In the 19 years that Alvan Macauley has general-managed Packard, the company has grown to first place in the fine-car production field.* Packard stock, which sold for as low as 5S: in 1922 and for as low as 15 in 1925, has had a 1929 high of 153!, is now in the neighborhood of 130. Packard shipped 32,122 cars in (fiscal year) 1927; 47,178 in (fiscal year) 1928. Now making only straight-eights in the $2,500-and-up field, Packard sales totaled 41,131 for the ten months ending June 30, 1929. In the aviation field, Packard built the famed Liberty motor and last spring brought out the first Diesel aviation engine (TIME, May 27). Net income for 1928 (fiscal) was $21,885,000, almost double the corresponding 1927 figure. Packard does not publish export figures, but its business in 61 countries had doubled in the past two years.

Many are the Macauley hobbies. He plays golf in the go's, is an excellent marksman (particularly when wild ducks are the target), has a large private collection of firearms. Many of his leisure hours are spent in his woodworking shop, where he makes furniture, especially English period pieces. He goes to Florida every winter, to Europe once a year. Last summer when Packard was involved in one of the many merger rumors then (and now) current in the automotive field, Mr. Macauley, denying merger talk, said that Packard would never lose its distinctive character, would not enter the low-priced field, did not "cater to the world."

* Countervailing provides that no foreign car be imported at a lower duty than the country "from which it comes imposes upon imports of U. S. cars. Thus, French cars would continue to pay a 45% duty because France has a 45% duty on U. S. cars imported. * Ford tractors ("steel mules") are all made in Ireland now. They enter the U. S. duty-free as "agricultural implements" (TIME, June 24). --Automobiles are booming in production, but not in Wall Street. Production for the first six months of 1929 is estimated at the record figure of 3,380,000 cars. Bearish arguments on motor stocks maintain that big production figures should be discounted as coming largely from Ford and Chevrolet. Bears also maintain that dealers are overstocked and that production at present rate cannot continue. Meanwhile motor men are confident that 1929 will go well over the 5,000,000 production mark.