Drive Them off the Floor

Kaiser-Frazer Corp. laid off 750 employees a fortnight ago after what it termed a "straight-from-the-shoulder" explanation: "Since engine deliveries are not keeping pace with schedules, we are in the process of reducing personnel to conform to the delivery of engines." Last week, in what appeared to be an attempt to remedy the shortage, K-F leased part of the Detroit plant of Continental Motors Corp., which had been supplying its engines. Henceforth, said K-F, it would make most of its own engines, pay Continental a fee.

On the face of it, the deal seemed to be a rather severe rebuke for Continental. But Continental was so suspiciously quiet that Detroit guessed it was glad to get rid of the job. Car makers felt that Continental could make motors faster than K-F could use them and so could not make money on the comparatively small production K-F could absorb. Nor was the outlook for bigger K-F production bright. The straight-from-the-shoulder facts last week were that, even in a still tight auto market, Kaisers and Frazers were not selling too well.

In Denver, a prospective buyer was offered prompt delivery of either a Kaiser or Frazer in a choice of four colors, along with a spare tire, a box of tools, a tankful of gas, and a radiator full of anti-freeze thrown in. In Seattle, a buyer could walk into a showroom and take his pick of 16 cars. In Dallas, salesmen were offering delivery in five hours; the delay was only for servicing, registration, etc. And in Los Angeles, where plans for a K-F assembly line have been shelved, one dealer anxiously asked an impatient customer: "Well, would half an hour be too long to wait?"

One reason for this odd situation in the otherwise booming automobile market was K-F's "newness," which was its biggest selling point at first. Buyers, seeing a chance to get tried-&-true cars after a wait of a few months, have become so wary of the new K-F that salesmen are chorusing: "The only thing new is the body, and it's not radical." But the biggest reason for lagging K-F sales is price. Competing automakers reckon that the Kaiser and Frazer should sell for around $1,600. But the Kaiser is now up to $2,029 and the Frazer up to $2,220 F.O.B. Detroit. At such figures, car buyers can get a Cadillac, Buick or Chrysler. Apparently many of them have decided to wait until new cars with old names are ready for them.

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