Wait Till Spring. . .

Are the rebates working? The automakers say that the $200 to $600 checks they have been offering to buyers of new cars since mid-January have saved the decline at the dealerships from turning into a disaster. Yet the 1975 models are still having a bumpy sales ride, to say the least. Buyer interest rose smartly in the last ten days of January, the first period in which all of the automakers had their rebate programs in effect. But then sales plunged again.

The four automakers reported last week that they had sold a total of only 138,108 U.S.-built cars in the first ten days of February--42% fewer than the 238,324 cars they sold in late January. They took some comfort in the fact that the most recent sales were "only" 5% below the same period in 1974, when the Arab oil embargo was scaring buyers away. On that year-to-year basis, General Motors' sales rose 2.4% and Chrysler's were up 4.8%, while Ford's were down 8.3% and American Motors' were off 23.5%.

Hurt Profits. Detroit's costly gamble on cash rebates has helped to pull down the huge backlog of unsold cars, which stood at a 110-day supply in early January and hovers around 92 days at present. But profits have been hurt, many plants remain closed and fully 245,000 employees--31% of the industry's hourly-paid labor force--are currently laid off and the rebate programs are scheduled to end on Feb. 28.

Even so, General Motors remains considerably more optimistic than its rivals about sales this year. Chairman Thomas A. Murphy suggested last week that the company might begin to call back some of its 134,000 laid-off employees around the end of March "if the traditional upswing in auto sales occurs this spring." That is a big if, and it will be even bigger if there is no extension of the rebates.

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