From the Rolls-Royce experimental archive: a quarter of a million communications from Rolls-Royce, 1906 to 1960's. Documents from the Sir Henry Royce Memorial Foundation (SHRMF).
Page from an automotive industry publication discussing tire pricing, sales records, and new passenger car registrations.
| Identifier | ExFiles\Box 128\3\ scan0049 | |
| Date | 15th May 1939 | |
| 626 1104 Higher Mass-Distributor Tire Prices Foreseen by Industry FTC Order Against U. S. Rubber Co. May Lead to Revised Bonus System Sweeping revision of the tire industry's pricing system, with either modification or complete abandonment of cumulative volume bonus schedules, looms as a strong and early probability as result of the Federal Trade Commission's Cease and Desist order issued against the United States Rubber Co. The company was charged with illegal price discrimination against small dealers, and in favor of its larger dealers and its mass distributor customers. In its formal answer filed April 7 to the Commission's complaint, the company admitted the facts as to price discrimination and price differentials, as contained in the complaint. Of immediate concern to all tire manufacturers is the Commission order to the U. S. Rubber Co. to cease discrimination between different dealers by granting cumulative discounts dependent upon the volume or purchases of tires during a specified period. For many years major tire manufacturers, under their pricing programs, have maintained bonus-for-volume schedules, giving dealers, in the form of merchandise credits, bonuses dependent upon their orders over the period of a year. While trade and special discounts show on the face of the invoice to the dealer, the bonus has, under the plan, been cumulative over the period of a year, payable either quarterly, semi-annually or annually. These bonuses for volume have ranged, under the fluctuation programs of major manufacturers, from one per cent on $1,000 worth of annual business up to 10 per cent on $15,000 volume and 12 per cent on $35,000 volume to a bonus program starting at a certain annual volume and going as high as 15 per cent on $50,000 volume. In addition to these so-called earned bonuses, manufacturers at times have given dealers guaranteed bonuses of 15 per cent on top of regular trade discounts, monthly bonuses, distributor discounts, warehouse discount and carload discounts. In all probability the bonus-for-volume plan will be changed to a quantity discount, applicable to each individual order in proportion to its size. With respect to the Commission order to the company to cease price discrimination in favor of its mass distributor customers, industry observers see as result a general upward revision of mass-distributor tire prices, which they say will help the industry generally, compel large distributors to adhere to price schedules and stop wanton price cutting and discount giving. Prior to the enactment of the Robinson-Patman Act, Goodyear Tire & Rubber Co. made all Sears-Roebuck brand tires; United States Rubber made Montgomery-Ward tires and about half of Atlas tires for Standard Oil, the B. F.{Mr Friese} Goodrich Co. having the balance of the Standard Oil contract. Goodyear terminated its hundred million dollar Sears-Roebuck 10-year tire contract (which the Federal Trade Commission has attacked as illegal under the Clayton Act) the company claiming it did so not to comply with the Commission's cease and desist order, but because of provisions of the Robinson-Patman Act. Goodrich at the same time dropped its share of the Atlas tire contract and the United States Rubber Company assumed the entire Atlas contract and since that time has made all Atlas tires for Standard Oil marketing. Goodyear appealed the Commission's order and the Cincinnati Circuit Court of Appeals recently reversed the Federal Trade Commission, holding the issues moot because the contract was no longer in force, and also finding that the price differential was justified by the quantity involved. The Commission is expected to carry the case to the Supreme Court this month. It is considered possible that the United States Rubber Co., having admitted the facts as contained in the Commission's complaint, and having submitted voluntarily to a formal cease and desist order, will now appeal the order to the U. S. Circuit Courts, to have the courts determine whether or not the price differentials were in actual violation of the Robinson-Patman Act. In its answer the company reserved the right to appeal. Divco-Twin Truck New Sales Records Each month of the fiscal year which started last Nov. 1 has been ahead of any corresponding month in the history of the Divco-Twin Truck Co., and there is at present a substantial backlog of orders on hand. Scheduled for completion about Aug. 1 is the construction of a new plant for the company. Work has already started. Estimated cost of the land, buildings and machinery in the program is about $440,000. New Passenger Car Registrations* THREE MONTHS Per Cent Change, Per Cent of Total FIVE MONTHS MODEL YEAR MARCH FEBRUARY MARCH 3 Months, Three Months 1939 1939 1938 1939 1938 1939 over 1938 1939 1938 1939 1938 Per Cent Change Chevrolet 58,383 42,698 45,080 143,398 109,145 + 31.3 23.47 24.60 247,382 214,560 + 15.0 Ford 42,698 30,773 35,441 111,012 99,482 + 11.6 18.17 22.43 177,598 146,852 + 21.0 Plymouth 34,910 23,956 23,341 88,826 55,402 + 60.3 14.54 12.49 156,118 105,081 + 48.3 Buick 19,320 12,921 15,059 48,079 35,590 + 35.0 7.87 8.02 85,910 69,398 + 24.0 Dodge 18,875 12,401 10,319 46,861 24,859 + 88.3 7.67 5.60 74,930 50,470 + 48.8 Pontiac 14,386 9,369 9,701 35,260 23,099 + 53.1 5.77 5.21 61,000 45,986 + 32.8 Oldsmobile 12,080 8,730 8,615 32,049 21,642 + 48.1 5.24 4.88 58,458 41,791 + 39.8 Chrysler 6,762 4,332 4,590 17,261 11,615 + 48.6 2.82 2.62 29,058 23,978 + 17.0 Mercury 5,245 3,538 — 13,293 — — 2.18 — 20,128 — — Nash 5,329 3,308 3,144 12,537 8,089 + 55.0 2.05 1.82 18,141 15,435 + 17.5 De Soto 5,114 3,190 3,798 12,256 8,896 + 37.8 2.00 2.00 20,341 18,079 + 12.5 Hudson 4,410 3,032 4,158 11,002 9,953 + 10.5 1.80 2.24 20,409 19,222 + 6.0 Studebaker 4,397 3,011 3,231 10,906 8,306 + 31.3 1.78 1.87 20,376 16,007 + 27.1 Packard 3,765 2,664 4,775 9,497 11,477 - 17.2 1.55 2.59 18,569 22,280 - 16.5 Lincoln 1,718 1,279 1,610 4,387 4,618 - 5.0 .82 1.04 9,397 9,019 + 4.0 La{L. A. Archer} Salle 1,917 1,308 1,201 5,019 3,092 + 62.4 .82 .70 9,823 6,331 + 47.5 Cadillac 1,099 918 1,036 3,299 2,652 + 24.8 .54 .60 5,955 3,909 + 52.1 Willys-Overland 1,023 747 2,652 2,748 3,663 - 25.0 .45 .83 4,670 8,116 - 42.5 Graham 402 277 479 1,029 1,393 - 26.1 .17 .31 1,743 2,753 - 36.6 Hupmobile 57 36 163 154 246 - 37.4 .03 .06 255 352 - 27.5 Miscellaneous 202 188 183 491 398 + 23.2 .09 .09 790 844 - 6.3 Total 242,660 164,942 177,487 611,014 443,611 + 38.0 100.00 100.00 1,038,840 819,702 + 26.9 Chrysler Corp. 65,649 44,179 42,048 165,204 100,772 + 65.1 27.04 22.72 279,447 197,608 + 41.2 Ford Motor Co. 49,661 35,690 37,051 129,340 104,100 + 24.1 21.17 23.47 206,123 154,910 + 33.0 General Motors 107,985 77,310 81,142 268,184 193,220 + 37.2 43.88 44.00 468,322 382,175 + 22.4 All Others 19,565 13,263 17,276 48,386 45,519 + 6.3 7.81 9.81 84,948 85,009 None *Complete except for Tennessee for March in all calculations. May 15, 1939 Automotive Industries | ||