Car Cartel?

Many a U. S. automobile executive, including Charles Franklin Kettering of General Motors Corp., was in Paris last week for the international motor show. But Andre Citroen, leading French motormaker, was in Manhattan. He attended a luncheon given for him by the directors of National Automobile Chamber of Commerce. Toastmaster was G. M.'s Alfred Pritchard Sloan Jr.; guests included young Errett Lobban Cord of spectacular Auburn Automobile Co.; William Crapo Durant of Durant Motors, Inc.; Charles Michael

Schwab, Stutz investor; and many another concerned with automotive affairs.

All motormen at the luncheon listened attentively to what M. Citroen had come to say: let there be an international cartel to limit production, eliminate too stiff world competition. Members of it would be the five biggest motormaking nations: the U. S. (80% of world production). France, England, Canada and Germany. Since many U. S. companies find in exports their margin of profit, and since the U. S. has lost ground abroad during the past two years, such a cartel might not be repugnant to big U. S. producers. . . .

Tariff walls and Depression have been the obstacles in the way of automobile exports. A clear example is in Australia. The tariff there is practically prohibitive to U. S. makers, but the Depression is so great that few sales could be made even were the cars admitted. During the first seven months new car sales in Australia came to 901 against 2,862 in the same period of 1930, and dealers looked forward to further decreases.

During the first eight months, exports of passenger cars (complete or chassis) came to 65,463 or 3.9% of total U. S. production. For the same time last year the figures were 122,692 and 5.4%. The August figures were 5,563 cars against 7,956 and 3.6% against 4.3%. The production of the 67 U. S. assembly plants in foreign countries (including 13 in Canada) is not yet known but has probably decreased almost as much as exports. Biggest buyer in August was the Union of South Africa, second biggest was Belgium, a distribution point for nearby stations.

In suggesting a car cartel, M. Citroen said he did not propose to start an invasion of the U. S. market, merely wanted "a binding agreement which would prevent competition in such severe form that manufacturers would suffer." If it should materialize, the cartel would necessitate the formation of an export association in the U. S., could not affect competition in the domestic market.

No U. S. motorman commented publicly on M. Citroen's proposal. Directorates must ponder and decide.

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