Government's Costly Requirements for Its Own Cars Hindering Sales

Whither are we going?

The Wall Street Journal on February 5th carried the item headed "Uncle Sam May Think Small in Car Buying, Switch to Compacts." The point made was that "Rising Prices, $1,500 Limit for Sedan, Lack of Bids Cited, Foreign Models Not Barred."

All this comes from testimony by the government's car buyer, the General Services Administration, that they are considering switching to compact cars - possibly including for the first time, foreign cars - from the intermediate-sized cars currently purchased for government use.

Heinz A. Abersfeller, commissioner of the GSA's Federal Supply Service, told a Senate subcommittee hearing on the cost of auto-safety equipment, that the key problem on car purchases is the legal limit of a $1,500 wholesale price that the Government can pay for a new sedan. "In the fiscal year ended June 30, the average price paid by the Government reached the $1,500 limit up from $1,383 three years before." This apparently leaves little, if any, profit for the auto maker, he stated. Intermediate-size cars - such as CM's Chevrolet Chevelle and Ford's Fairlane - generally wholesale to auto dealers for more than $1,900.

As a result, few companies are bidding on Government passenger car contracts. On the purchase of 3,177 sedans last month for about $4.5 million, "a bid was received from only one manufacturer (American Motors)", Abersfeller said. "Generally, we get three or four bids, but very rarely only one," he remarked.

The GSA may ask Congress to raise the $1,500 price limit, which has been in effect for 10 years. But meantime "we are considering changing to compact cars" such as the Ford Falcon or Chevy II, he said. U. S. compact cars, at the dealer level, generally wholesale for about $100 less than intermediates.

Abersfeller added that foreign cars - provided they meet certain size and horsepower standards - could be considered if the government switched to compacts. If a foreign maker submitted the lowest bid, "they'd get it," he said after the hearing. Foreign makers never have bid on government: auto contracts, he stated.

Whither are we going?

Our government, because of vehement demands by such critics as Nader and others, established stringent safety standards for American passenger cars ... all of which added considerably to the cost, of these vehicles. There are still more and more safety standards to come ... it seems that Washington writes at least a new one each month just to keep their hand in. It is only natural that all these standards must raise the manufacturing cost ... and it follows that all these increased costs must be passed on to the individual buyer ... the fleets ... and the government car buyer.

With one bureaucratic hand whipping away at the major manufacturers to add more and more safety features ... the other burocratic hand tells the same manufacturers "we want your vehicles but at our price."

How do you reconcile this?

By asking the foreign car manufacturers to enter into the bidding for government business?

Is this the American way of doing business and keeping our so-badly mangled economy on an even keel?

In fact Senator Abe Ribicoff (D.-Conn.) has intimated that there is "an unpublicized boycott on selling cars to the United States Government by Ford, GM and Chrysler" ... and that this is an undeclared but nevertheless effective boycott.

What else can the Big 3 auto companies do? Comply with all government vehicle safety regulations and not add their cost to vehicle manufacture, in order that the government can buy its cars at a government-established price?

Our eggheads in Washington evidently are still living in a dream world of their own ... a world that absolutely refuses to recognize the plain and unvarnished truth that American free enterprise (are we still enjoying it?) must surrender its function of making a profit!

Our lawmakers plug for American industry ... but at the same time, intend to open wide the doors to a foreign invasion of car manufacturers and their low prices.

It could be a losing battle to the creeping Socialism which has engulfed some of our benighted solons in Washington. They don't want to learn the hard facts about car manufacturing ... rather let's threaten the Big 3 with antitrust legislation to bring them into line so that GSA can buy their vehicles at a price established by Congress ten years ago ... when safety features ... added these days to vehicles by government interdiction ... were unheard of.