75 Years Ago (May 1939): Car Sales Lag; Packard Cuts Prices; Coal Strike Hits Ford; Briggs Workers Walk Out

The “normal” spring upturn in new-car sales has thus far failed to materialize, Ward’s Automotive Reports’ says in its May 6, 1939, issue. Although, poor April weather is blamed for much of the decline, a “noticeable” upturn has taken place in the past week as warmer weather prevails. However, “the underlying strength is not broadening out as would be expected after the rate of winter deliveries, WAR cautions. Lackluster spring sales is prompting production cuts with most plants operating less than a 5-day schedule for the week-ended May 6.

Hoping to stimulate sales, Packard announces price cuts of $100 to $300. Rather than a “short-term distress move, the cuts are seen as part of a long-range program designed to entrench Packard in a better competitive position.”

Further, the Packard move is not expected to trigger any similar actions across the industry in the near term. “Later, perhaps, if the present size of field stocks continues and sales lag, there may be distress-selling price reductions,” but they will grow independent of Packard’s actions, WAR says.

The effects of a coal industry strike that began in mid-April are at last being felt by Ford’s Rouge manufacturing complex. Although oil is being used temporarily in place of coal to power the Rouge’s electricity-generation plant, the system is not operating at capacity. As a result, “lights were being used as sparingly as possible” during the week-ended May 13.

Other Detroit-area automotive-related facilities also have scaled back operations to a minimum because of coal shortages and will continue to do so until supplies stabilize.

The late-May walkout of 15,000 workers at the Detroit facilities of automotive body supplier Briggs Mfg. has resulted in the indirect layoff of an additional 55,000 workers in the auto and supplier industries.

Chrysler, arguably Briggs’ largest customer, accounts for 45,000 of the idled workers. An additional 5,000 are on layoff at Lincoln, 4,000 in supplier plants and 1,000 at shipping and transit companies.

If not settled quickly, the strike will lead to more plant shutdowns and layoffs in the coming week, Ward’s points out in its May 27 issue. However, with Chrysler’s dealers “well supplied” with new cars, there is no immediate pressure, from a manufacturing standpoint, to reach an accord, the newsletter says, “particularly when the CIO-UAW has taken an uncompromising, arrogant attitude with regard to settlement.”