Ford v. G. M. C.

If the approaching automobile war between Henry Ford and General Motors Corp. were symbolized in armaments, Mr. Ford would be a cannon and General Motors a machine gun. When a Ford product strikes the market squarely, as did Model T when first shot into a world of pedestrians, the battle is over. But when the Ford product misses, as Model T has been missing ever since economic prosperity in the U. S. caused the public to shift from mere transportation to touring with style, it misses by a mile. Though Henry Ford has added to his weapon such potent arms as the Lincoln motors and an airplane manufacturing unit, his big gun has always been Model T Ford. General Motors Corp., on the other hand, spreads its shots. It sends out a car to strike every purse--Chevrolet, Oldsmobile, Pontiac, Oakland, Buick, LaSalle, Cadillac. It carefully picks up its dead shells and turns them into electric refrigerators, an effective barrage to cover a retreat. It invests in real estate. It trains its bullets on markets far afield, on Europe, on Australia, scattering its products all over the globe.

Last week lean, suave President Alfred Pritchard Sloan Jr. of G. M. C. and Henry Ford declared that there was no war contemplated between them, that they were shooting at different targets. Said Mr. Sloan: "If the past is any indication of the future, the new Ford car will be a car that will appeal to a great mass of people. Naturally, that car must meet present conditions, but the basic idea is likely to be the same. General Motors is in quite a different position. General Motors' idea is to make a car of greater luxury than the Ford, a car that properly belongs to the next higher price class."* Earlier Mr. Ford had said: "We have no desire to take business away from any automobile manufacturer. Our thought has always been that the automobile business is prosperous only when all the makers of good cars are busy." But Chevrolet motors, manufactured under the direction of a onetime Ford executive, William Knudsen, have been hitting near enough to the low-priced market for automobiles to demolish almost half the target aimed at by the Ford Motors Co. In 1924 Ford scored 2,083,545 sales to Chevrolet's 587,341. By 1926 that score was changed to read Ford, 1,810,000; Chevrolet, 1,234,850. This year in the first six months, it reads G. M. C., 586,444; Ford, 332,384. Before the end of the year the score will stand still higher in G. M. C. favor.

This is because-Ford has ceased firing until he can get his big gun trained on the shifted target of public opinion. It has moved in the direction of racy lines, snappy colors, manual gear shift, speed. It will be 1928 before Ford has tested his product sufficiently well to allow it to re-enter into the conflict.

Such delay is remarkable aside from the fact that it costs the Ford plant almost a million dollars a day. The Ford corporation that feeds and mans the big guns is a small, easily handled squad of three--its sole stockholders are Henry Ford, Mrs. Henry Ford and Edsel Ford. G. M. C., on the other hand, has a corps of over 80 high executives, its J. P. Morgan banking affiliations and 57,000 stockholders to consider in every maneuver. Yet the Corporation has proved itself the more resourceful of the two when it came to keeping abreast of the moving public target. It has carefully trained its sales organization so that it can sight its market more efficiently; Ford devotes little thought to merchandising, preferring to make such a wow of a howitzer that the market will get into the line with it.

There is, of course, a great foreign market yet to be exploited. This may keep the two manufacturers from conflicting. But it seems inevitable that plain business competition between Ford motors and Chevrolet (the most profitable unit of G. M. C.) will bring on a battle, even if Ford cars sell at a cheaper level than Chevrolet, and try, thereby, to strike a market all their own.

* This was part of a speech by Mr. Sloan delivered before the automobile editors of the U. S. gathered at the General Motors proving grounds in Milford, Mich., as guests of the corporation. Later he informed the editors that he hoped the corporation would show earnings for the second half of 1927 as great, if not even greater, than for the second half of 1926. If this hope is fulfilled, G. M. C. will show net profits of $222,195,715 as against $186,231,182 for 1926. It is the liberal policy of the directors to distribute half the profits in dividends, reinvesting the other half in the expanding business.