Word: detroits
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Dates: during 1970-1979
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There is little mystery as to why the U.S. consumer is giving Detroit such a rough time. As a Detroit industry analyst puts it: "The price of a car sounds just too damn high." Coming off three record-sales years, some letup was expected. But the gravity of the current situation was unforeseen. With the late-summer announcement that 1975-model prices would jump an unprecedented average of $400 per car, buyers flocked to showrooms to make down payments for late 1974s at what seemed to be bargain prices...
When the 1975s rolled out, buyers began a rebellion against almost all Detroit's offerings. Hurting badly are compacts and subcompacts, which cost $3,000 or more. In early November there was a 111 -day supply of Chevy Vegas, a 91-day back-up of Ford Pintos and an 88-day inventory of American Motors Gremlins. Bigger cars are not doing well either, but they are selling better than the compacts, with only a 52-day inventory on hand...
Never So Long. Detroit's automen have their own explanations as to why most models are not moving. President Ford did them little good when, in October in Kansas City, Mo., he urged consumers to save more and buy judiciously. Auto executives also blame tight credit for frightening potential buyers and Limiting dealers' ability to keep cars in inventory. Last week Chrysler President John Riccardo was in Washington urging Michigan's Congressmen to push for looser credit...
...city of Detroit, which rides the auto industry's undulations as if on a roller coaster, has yet to feel the worst of the downturn in car sales. Though auto layoffs have driven joblessness to 11.8% in the city, auto workers who have at least one year's seniority will qualify for supplemental unemployment benefits, or SUB, tacked on to unemployment compensation; the total can go as high as 95% of take-home pay for a 40-hour work week. But SUB funds, supplied by companies as part of the union contract, are not infinite and could expire...
...Detroit is supersensitive to auto layoffs; a Wayne State University study shows that for every pink-slipped auto worker, another 1.5 employees in local supply industries would eventually lose their jobs. The same study reports that for every $1 fluctuation in national car and truck sales, Detroit residents gain -or lose-300. The head of a company that deals with all the major Detroit-area manufacturers says that even the biggest ones are holding off payment for services. Says he: "I've never had to wait so long for my money-ever...