GENERAL MOTORS NOT TO CUT PRICE

The New York Times
14 November 1924

Head of Corporation Announces That His Concern Will Not Follow Competitors.

EXPECTS GOOD BUSINESS

Industry is Bound to Go Forward With Confidence, Says A. P. Sloan Jr.

Manufacturers of automobiles who have cut prices during recent weeks for the purposes of getting business from their competitors are going to be disappointed, in the opinion of Alfred P. Sloan Jr., President of the General Motors Corporation. Mr. Sloan stated that the General Motors organization had no intention of following this policy of price cutting.

“As to the trend of prices in the automobile industry,” said Mr. Sloan in a statement issued yesterday, “I cannot see any justification for any price reductions. Certainly, material will not be any lower—if anything, higher. I see no possibility of reduction in the cost of living that would justify any considerable lowering of the wage scale. It is a matter of record that present prices reflect a very close margin of profit to the manufacturer, and the dealers' position we all know. From the standpoint of the public the real worth in the present cars is greater than at any previous time in the history of the industry. I believe that manufacturers who reduce prices in the hope of getting business from competitors are going to be disappointed. General Motors is not going to take that position.”

Commenting on the business conditions in general Mr. Sloan said, “I believe the year 1925 is sure to be a good one for our industry. Economic conditions appear to be thoroughly sound and with confidence firmly established, industry is bound to go forward. It seems that people will buy motor cars in generous volume. I look forward to a business at least equal to this year.

“I hope we are going to profit by experience. It must be admitted that there was overproduction in the early part of this year. Overproduction simply means an economic loss to all concerned. Although the consumer may temporarily buy to advantage through lower selling prices forced by necessity of liquidation, the cost, whatever it happens to be, must ultimately be passed on to the consumer. Overproduction must be followed by readjustment and a period of more or less reduced employment. This means a lower wage scale and the general upsetting of the whole cycle of industry.

“General Motors definitely announced its position as to production some months ago and is consistently adhering to that policy. Our unsold stocks of cars in the field at the close of this year will be fully adjusted to that policy and will only be what is necessary to properly move current business.”