Help for Dealers

The 10,000 members of the National Automobile Dealers Association who gathered for their annual convention in Washington last week were in a mood to grumble--and got some professional help. They applauded when Democratic Senator Joseph C. O'Mahoney, who last year probed the affairs of General Motors Corp., cried that "manufacturers have contrived to put themselves in an impregnable position, while the dealer is at their mercy." Democratic Senator A. S. (Mike) Monroney, who has spent a year studying auto-marketing practices, added his bit: "Ethical standards are deteriorating to the business morality of an Oriental bazaar. If conditions do not change, the traditional pattern of the franchised dealer will disappear. In its place you will find a supermarket operation."

Newly elected N.A.D.A. President Carl E. Fribley, who has been selling Cadillacs in Norwich, N. Y. since 1931, warned that if unfair business practices cut the number of franchised dealers in the country, cars will not be serviced properly, and accident rates will soar. Said Executive Vice President Frederick J. Bell, a retired rear admiral who also serves N.A.D.A. as a public-relations expert: "We do not want soothing syrup. We want action, and we are going to get it."

What the dealers wanted was more sympathetic cooperation from automakers, plus federal legislation to ensure dealers a better profit by ending runaway price cutting, auto bootlegging and "phantom freight," a manufacturer's charge equal to the cost of shipping from Detroit, no matter where cars are shipped from. Dealers close to auto plants complain that bootleggers can pick up cars in Detroit without paying the charge, ship them around the country for less than the factory-set freight, thus gain an unfair advantage.

Making Friends. While the grumbling went on in Washington, automakers were quietly trying to appease the dealers. Chrysler, which has forbidden dealers to use Chrysler, Dodge or Plymouth in their corporate names, will now permit them to do so. General Motors President Harlow Curtice last week invited G.M. dealers to a conference this week on common problems. At the same time, Ford announced a package of wholesale price cuts (some $25 per car) for its dealers.

The big reason for the change was not so much dealer grumbling as a simple economic fact: there are some 800,000 unsold cars in dealers' showrooms now, v. only 463,000 at this time last year. General Motors and Ford have both trimmed production below 1955 levels (TIME, Jan. 23). Last week Chrysler announced that it was cutting back to a four-day week. Total auto output in January, said Ward's Reports, Inc., was about 614,000 units, almost 7% below January 1955.

Life was also getting easier for the dealers in other ways. A Denver dealer reported that his factory had cheerfully allowed him to cancel part of an over-optimistic order. Said he: "Six months ago they would have told me, 'You ordered them; now pay for them.' "

Mink Stoles. Detroit's new, kid-gloved handling of dealers may have stemmed from the fact that with car sales down in many parts of the U.S., it is getting harder to hang onto good dealers or get new ones. Grumbled a Boston dealer: "No financially able man in his right mind would go into the auto business. He'd be better off putting his money in the stock market." To get rid of surplus cars, dealers have cut prices and profit margins to the bone; N.A.D.A. reckons that the national average margin now is 0.6%.

Despite the grumbling, there are few signs of hardship among dealers. One feature of the annual N.A.D.A. convention is a raffle of a mink stole for dealers' wives. As this year's winner stepped up to collect her prize, she was already wearing a mink stole.

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