Safety: GM’s Scapegoat
John Z. De Lorean, the former superstar executive at General Motors until he resigned last year, was in Washington a few days ago making some super good sense.
In a Senate briefing, sponsored by Senator Vance Hartke (Dem., Ind.), De Lorean said it was ridiculous to consider sacrificing automotive engineering safety because of the auto companies’ present economic turbulence.In a Senate briefing, sponsored by Senator Vance Hartke (Dem., Ind.), De Lorean said it was ridiculous to consider sacrificing automotive engineering safety because of the auto companies’ present economic turbulence.
“Over the past 18 months,” he said, “the average price increase of a sedan has been over $1,000, and the cost of added safety features is an insignificant slice of that dollar amount.”
In contrast, Richard C. Gerstenberg, chairman of General Motors, issued a statement on September 1 which is unprecendented in its callousness toward motorists’ safety and decent business behavior.
Gerstenberg, who once called himself “just a bookkeeper” at a Senate hearing, said that GM wants no more new safety features over the next three years.
The auto giant is also demanding an actual rollback of some existing lifesavers which the government has obliged the auto companies to install. He says such past and future safety and pollution control cutbacks will help the fight against inflation.
Here are Gerstenberg’s words:
“The car-buying consumer is burdened today by the cost of a number of governmental requirements that have been placed upon cars and trucks; costs that are in many cases well beyond whatever value these regulations provide.
“And today still further requirements of questionable value are being proposed both by law and by regulation. The mandated equipment added to our cars and trucks over the four model years (1972 through 1975) to meet regulations for emission control, occupant protection, and bumpers, has added about $270 to the cost of every vehicle we produce for the United States.”
Mr. Gerstenberg left some important information out of his statement. He failed to note the massive costs to motorists of styling — useless gingerbread, chrome trim and patterns outside and inside the car which are imposed on motorists.
Safety or style? Gerstenberg wants a moratorium on safety, not styling. Back in the late fifties, several university economists completed a study which then showed that several hundred dollars of the retail price of the automobile reflected styling costs.
The GM boss also failed to speak about the prudence of pushing such “unproductive” features as wire wheel covers, vinyl roofs, power seats and power windows which cost, respectively, $87, $106, $113, and $135, on the 1974 Chevrolet Impalas.
How many lives and injuries will these and other similar “notions” save? such items are usually classified as optional equipment but as many motorists know, company and dealer pressures turn many of them into “mandatory options” — if you don’t want them off the showroom floor, you’ll have to order your model without such specifications and wait several weeks or months during which time the overall car price may be raised.
Obviously, GM is not about to mention the federal trade commission report which stated that the highly concentrated domestic auto industry is costing consumers billions of dollars due to anti-competitive practices and captive marketgouging for replacement parts. For several years, State Farm Insurance Co. has been compiling information on the automotive replacement parts market and consumer overcharging, waiting for the FTC to act.
Nor is GM ready to remind motorists about their lost dollars due to creampuff bumpers during the last 15 years which exposed cars to several hundred dollars damage in five or ten mile per hour collisions.
Also hiding behind the chrome curtain are such facts as the much higher price markups for widely sold optional as compared with standard equipment, and the overburdening, with inappropriate costs and amortization expenses, of safety equipment pricing to mislead the public about how inexpensive such equipment is to GM and other auto companies.
Ford and Chrysler are fueling inflation by another technique. According to the Wall Street Journal, these automakers are “simply dropping their lowest-priced standard-size cars in some lines, effectively forcing buyers of those models into a richer version if they want that size car.”
A couple of days after Gerstenberg’s statement, the GM chairman said that even if safety equipment was removed, the company’s car prices might not be reduced. Indeed, hesuggested that more price increases were coming in the near future during the 1975 model year. Last year’s models were hiked six times during the model run.
Should Gerstenberg and other auto executives continue their campaign of misinformation to make safety features the scapegoat for their rocketing prices, it will not be long before a congressional committee subpoenas the cost and productivity data of the companies which they have so carefully guarded as secrets over the years.