Twenty Days in May

This time Detroit played it cool.

Automakers were acutely sensitive to the fact that troubles within their industry were getting much of the blame for the recent wobbles of the stock market as a whole. Now they had news that sounded happy on the one hand, but on the other hand was really not so good. The way they handled it was a real triumph of public relations.

In rapid succession, industry spokesmen announced that during the second ten days of May their companies' sales had gone up from the month's first ten days. That sounded pretty good. And to add to the air of confidence, Ford executives appeared before members of the Financial Analysts Federation in Manhattan and predicted bigger and better things in the future. By 1975, they said, the "normal level" for annual auto sales should run about 11.5 million cars, far above the record-breaking 9.3 million of last year. Predicted one Ford official: "At constant car prices, dollar sales of new cars will increase at a compound rate of 4.2% per year, faster than the growth we project for the gross national product."

Good news! But fact was that auto sales for the second ten days of May were actually off by 12% as compared with the same period last year. Though Ford squeezed by with a tiny .2% rise, Chrysler was down 6%. Giant General Motors was off by a whopping 18% --or 26,757 units--with its longtime bestseller, Chevrolet, leading the way down. And as for ailing little American Motors, it dropped by 34% and ordered all new-car production halted until June 1, ostensibly because of a strike at a supplier's plant.

All too recently, such news, taken straight, would have given the stock market a case of jitters; only two weeks before, word of lackluster early-May sales had helped drive the Dow-Jones industrial average to a nine-month low of 864.14. Last week, Wall Street took the nicely sweetened pill with barely a tremor. And the Dow-Jones average closed the week at 897.04, up 20.15, which represented the biggest week-long rise since last July.

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