Ed Bobit's Publisher's Page

We simply have to develop better methods of communication with the people because we know that there is no better system of ultimate reliance on the discriminating choice of the people. But they have to be informed. The first responsibility is information, is truth.

-Adlai E. Stevenson; Mike Wallace interview, Fund for the Republic, 1958

It was not surprising that the news services picked up the '$600 increase' for '75 models early in July attributing the source as a GM letter to fleets. It was not surprising as it was the first word out specifically on pricing for next year; and the slow-to-buy-new retail consumer is influenced by price tags much more than the fleet buyer. Obviously, the fleet manager cannot replace a '73 or '74 model car for his drivers with some 'slightly used' '74s or '75s.

The amusing part of the reporting was that it took the media so long to find out about it and then they did not understand it.

GM's letter to fleet accounts was dated June 13. It sim­ply assured fleet buyers that their choices of '76 models would not cost them any more than 6-percent over the current year; and perhaps less. (Ford later confirmed similar protection estimating maximum at an average of $335.) The news services interpolated this immediately as tanta­mount to an average $300 increase. Period. Then they refer­red to 'fleet accounts' as 'trucking companies and taxis.' Is there any wonder why the actual fleet business is so misun­derstood at the consumer-retail level?

Whatever the increase, there is a certainty there will be one. Last month, E.M. 'Pete' Estes, GM's president said, "We've already got $200 a car in new labor and material costs since last fall, as well as hundreds more in unrecovered costs from prior years that have been 'impossible to get back' because of the depressed auto market."

All this has a significant influence on fleet buyers. They buy new and must buy eventually even though extended replacement policies have been instituted causing maintenance costs to increase. Observers feel that there is a good share of postponed purchases in the market. They cite the knowledge gained in the soaring costs of maintenance when replacement is extended too far and the spiraling cost of gasoline with the move to unleaded, the gas companies' own increases and the new taxes. The '76s are sure to pro­duce better fuel mileage; and over a period of 65-70,000 miles in 30 months the dollars involved can be a key factor. The EPA gas mileage reports will undoubtedly be touted on the new models as weight saving and engine modifications are of paramount engineering importance as the new models arrive.

One item that will keep the price increase 'down' is in the rearrangement of models; less standard size and more smaller ones repositioned for maker profitability by making name changes and the usual face lifting. Also, Detroit must be making Akron go nuts. After staging a total acceptance of the radial tires that extended down to the smallest models, this fall will see bias-belted tires on the majority of models for economy volume in the lower priced lines. New York State Assemblymen apparently have not heard about the switch as their new bill would require all new cars sold in the state after January 1, 1978, to have radials. Slightly reminiscent of the old Abbott and Costello routine of "Who's on first?"

You can expect to have and pay for the 5 mph bumpers for at least another year. This is in spite of constant efforts by Detroit for a rollback to the 2-1/2 mph bumpers that they say would save $30 per car and eliminate an average of about 60 pounds for each car. GM has estimated that fuel savings for the full life of all '76 model cars utilizing the 2-1/2 mph bumper vs. the 5 mph unit would save a critical 200-million gallons of gas on top of the money saved. We simply get down to the same cost-benefit ratios on bumpers just as we continue to hassle on emissions and safety con­trols. With the energy problem much in the forefront and the related additional costs on fuel, the cost part takes of additional importance as the benefit portion remains quite constant. Somewhere, the scale will tip in the other direc­tion.