The General Motors Chairman, Thomas A. Murphy, waxed angry before his New York business audience a few days ago. He attacked Washington rumors that the Carter Administration may propose a tax on big, gas-guzzling automobiles as “one of the most simplistic, irresponsible and short-sighted ideas ever conceived” with effects that “the hip shooting marketeers of the Potomac probably didn’t consider.” These are strong words for a GM executive. Historically, GM has exuded dullness and blandness in the carefully modulated statements issued by its officials. The public tends to be less inquiring of a dull company and more curious about hot-headed corporate rhetoric and behavior.
Nowadays, however, GM’s top brass is feeling the heady winds of a record sales year, the legacy of eight years of Nixon-Ford regulatory permissiveness, and the faithful support of United Auto Worker leader Leonard Woodcock for the company’s anti-safety and pollution control positions.
BUT BEHIND the sound of GM’s ringing cash register, now grossing an average of over $4 million an hour, are signs that GM is losing touch with even knowing about its responsibilities. With the Republican honeymoon in Washington over, Carter’s new officials are finding a host of GM derelictions which invite law enforcement.
The Securities and Exchange Commission is evaluating GM’s recent admission of practices that range, in the Wall Street Journal’s words, “from possibly illegal political contributions to improper overseas payments.”
The Internal Revenue Service is investigating GM for possible criminal tax fraud. The company is alleged to have made improper writeoffs of a half billion dollars, leading to a suspected understatement of income and taxes during the past several years.
The Environmental Protection Agency has confirmed widespread violations of auto pollution control durability standards by GM (and other auto firms) that make a tragic mockery out of Mr. Murphy’s ridiculous assertion, to wit: “Actually, auto emissions have been so reduced that if every car on the road was (sic) a 1977 model, automobile air pollution would be virtually eliminated as a national problem.”
Not only are controls over harmful nitrogen oxides all but non-existent, but the devices to control carbon monoxides and hydrocarbons fail or deteriorate long before their 50,000 miles of required performance.
THE NIXON-FORD imposed moratorium on auto safety progress is over. It will be replaced by a greater adherence to the broad enforcement of the life-saving auto safety laws. GM opposition to automatic restraint systems on cars is being challenged by no less than two former top GM executives, Edward Cole and John DeLorean. It is likely that the Department of Transportation will soon reverse the Ford Administration and mandate these automatic systems for new cars.
The UAW leadership will pass to the hands of Douglas Fraser this summer. Mr. Fraser is expected to be a strong advocate of both worker and consumer interests. This change is policy would be a reversal of Mi. Woodcock’s lobbying at the side of GM which has puzzled many UAW staff members.
None of those changes in trends seems to be deflating GM’s current arrogance. Few happenings illustrate this point better than the unfolding flap over Olds mobiles sold with Chevrolet engines.
Tens of thousands of consumers who unknowingly bought Olds with Chevy engines are now being mistakenly told by GM that the engines are interchangeable in quality and value. But the price to consumers of an Olds and a Chevrolet are not interchangeable.
Besides having been deceived, Olds’ owners are finding out more details about the Great Engine Switch. According to official fuel economy guides, the Olds with Chevy engines get one to two miles per gallon (mpg) less. This difference results in an increase to the consumer of over $500 over the 1 car’s life.
In addition, motorists have learned that Olds dealers tell them they can’t supply parts or services for these Chevy engines. Nor are Olds manuals fully applicable to transplanted Chevy engines.
One defrauded consumer, L.A. Wilson of Pittsburgh, was caught, along with millions of other purchasers, by one of GM’s many tricky, unannounced midyear price increases. This one, switched “steel belted radial tires” from standard equipment at $86 in extra cost. Mr. Wilson expressed his frustration with GM by remarking, “I can sweep back the Atlantic Ocean with a broom easier than I can move GM “
GM isn’t budging yet. The company refuses to replace the cars or even refund the price difference between engines. Several state attorneys general are suing GM for fraud, the Federal Trade Commission is investigating, and outraged motorists are filing lawsuits themselves. The Center for Auto Safety, 1223 DuPont Circle Bldg., Wash., D.C. 20036, believes there is similar widespread sneaking of Chevrolet engines into Pontiacs and Burks. The Center’s staff wants to receive your complaints about this engine switching and will provide you with details.