EXHIBIT 25 GENERAL MOTORS CORP. EXPENDITURES RELATING TO SAFETY, DURABILITY, AND RELIABILITY During the hearing of the Senate Subcommittee on Executive Reorganization on May 1, 1968, General Motors was asked if the expenditures for safety in 1967 were a larger percentage of profits than in 1964. The following table compares such expenditures and net income after taxes for both years. The expenditures enumerated above do not include the substantial expenditures for plant, equipment and special facilities required in connection with these safety activities which, in 1967, exceeded $109 million. General Motors believes that relating safety expenditures to profits is not a valid measure of the effect we are putting forth in the field of safety. Our efforts in this area are part of a continuing program that has not been nor will it be affected by the level of profits. As can be seen from the foregoing comparison of 1967 vs. 1964, safety expenditures have increased whereas our total net income has decreased. GM will do all that is necessary to continue to build safe, reliable and durable products. Profits are a residual after paying all costs, including all safety expenditures, incurred in producing a safe, reliable product. The above expenditures are interwoven with and form an essential part of our engineering and development programs and necessarily represent our best estimate of the costs incurred in the development, inspection, testing and our Corporation-wide program of reliability, which is over and above normal inspection procedures. Also included are Central Office Staff Activity expenditures related to safety, primarily in the Engineering and Research staffs. In addition to the expenditures set forth above, (but not included in the amounts reported), General Motors participates in various other programs which directly relate to safety. Included in this type of expenditure is the operation of thirty training centers throughout the United States. We feel that the training provided in our facilities and by our instructors to our dealer personnel in the important areas of proper vehicle maintenance procedures make an important contribution to safety. The "Guardian Maintenance" campaign which is intended to impress car owners with the importance of regular and competent preventive maintenance as a way of preventing possible mechanical trouble which could cause accidents has been conducted by General Motors for many years. There is also, as I mentioned in my testimony, a program wherein we grant special allowances to our dealers to help defray the cost of cars loaned for the high school driver training purposes. The foregoing safety expenditures data refer to our automotive operations in the United States only. Similar activities are conducted by our operations in Canada and Overseas. SAFETY IMPROVEMENTS BEING STUDIED Senator RIBICOFF. Question: Based on your expanded efforts in this area, what is the most important step you can take in the next two to three years to improve the safety of the cars you manufacture? Mr. GERSTENBERG. Well, we have a number of projects underway at our proving ground, and in our laboratories at the technical center. There have been announcements, or at least one announcement was made not so long ago that we had some important features that we were thinking of in terms of our 1969 model cars. We have done a considerable amount of work on side-impact accidents, and their cause, and what we can do to improve the car in this respect. This is probably the most significant thing we are working on here for the immediate future. There are other studies underway on other parts of the car. I think we have announced publicly that we have a new type of theft device to incorporate in our 1969 models, a new locking device that will not only lock the ignition, but lock the transmission and the steering mechanism as well. This is a very important thing to us. That has been-we have had compliments on this from other people since we announced it. Senator RIBICOFF. Question: One important factor bearing on the price of the 1968 safety features is the number of changes required to meet the standards. In material submitted to the Subcommittee you stated that you had met all but one of the standards on some GM make or model prior to 1968. In view of this, would it be fair to say that GM encountered no great engineering difficulties in meeting the 1968 standards? Mr. GERSTENBERG. In some of them it was not as important as it was in others. In some instances we have exceeded those standards. It has been a good effort on our part to do this, sir. It is one we just did not do overnight. I come back to that energy-absorbing steering column and the years of development work that went into it to make it possible to install that on our cars in the fall of 1966. TESTING COMPLIANCE WITH SAFETY STANDARDS Senator RIBICOFF. The last question of Senator Kennedy: A matter which has received little attention is compliance with the new safety standards. The safety agency has not yet begun a compliance testing program, but Dr. Haddon has said each of the 550 different makes and models should be tested at least once. Could you tell us about your compliance testing program? Do you test each make and model at least once? Mr. GERSTENBERG. We test all basic models extensively at the proving grounds before they are announced and publicly sold. We do this over quite a lengthy period. We test them for individual features installed on them, test the complete vehicle in the context of a complete vehicle. We have some 75 miles of roads on our proving grounds out there, and we have simulated all types of driving conditions on those roads. We test the vehicle completely, and then we test all of these safety features most extensively in two specialized areas at our proving grounds. We actually crash test cars that are very highly and thoroughly technically instrumented to observe all sorts of conditions in this area. And on top of crash testing the actual vehicles, I think we do this on 400 to 500 a year now. In addition to that, General Motors built the first so-called impact sled in the industry in 1962, in which we can simulate almost any kind of a collision. And we have one impact sled that has been active since then. And I think we are running at an annual rate now of about a thousand tests on this impact sled. We have plans to add another impact sled in the expansion that is now going on at our proving grounds. So we test them thoroughly, absolutely, before we announce them. Senator RIBICOFF. How much does this testing cost you for each car? Mr. GERSTENBERG. Well, that gets back to the part of it in that $267 million. Senator RIBICOFF. You don't know Mr. GERSTENBERG. I could not extract from that the type of informait would take to answer you directly, sir. Senator RIBICOFF. Could you submit for the record a representative sample of the test results you have recorded on various makes and models? Mr. GERSTENBERG. I would have to check that. Senator RIBICOFF. I don't expect it now. You can submit it later on. Mr. GERSTENBERG. May I review that, sir? Senator RIBICOFF. Certainly. (The information referred to follows:) EXHIBIT 26 GENERAL MOTORS COMPLIANCE TESTING PROGRAM REPRESENTATIVE SAMPLE OF TEST RESULTS As requested in the hearing of the Senate Subcommittee on Executive Reorganization on May 1, 1968, General Motors is submitting for the record the following representative samples of test results recorded on various makes and models showing compliance with Federal Motor Vehicle Safety Standards. General Motors conducts compliance tests at the Proving Ground and in the laboratories of the various car and supplier divisions where the required test facilities may be available. Some standards require testing the complete vehicle while others will permit tests of separate components. The following sample test results are recorded for the standards indicated: Standard 201—Interior Impact Protection S3.1 of this standard requires that the instrument panel not produce a force of more than 80g for 3 milliseconds when struck by a headform at 15 mph. The following sample results were recorded in testing the instrument panel of a 1968 GM passenger car in 8 impacts across the head impact area: 1Columns A1 and A2 are values from duplicate sets of accelerometers used in the test procedure to assure confidence in results. Standard 204-Steering Column Penetration This standard specifies that dynamic rearward penetration of the steering column into the passenger compartment in a 30 mph forward barrier impact shall not exceed 5.0'. This requires that a complete vehicle be destroyed for the purpose of the test. The following result is recorded for a typical regular size 1968 GM station wagon: Speed in M.P.H. : 30.7 Standard 301-Fuel Tank Integrity Dynamic penetration 1.5'' rearward This standard requires that in a 30 mph forward barrier impact the fuel tank not leak more than 1 ounce during the impact and no more than 1 ounce per minute following the impact. This test requires a barrier test of the completed vehicle and is run in conjunction with Standard 204 above. The following results were recorded for the same station wagon as above: Speed in M.P.H.: 30.7 Standard 206—Door Latches and Hinges Leakage This standard specifies that door hinges withstand a force of 2500 pounds in longitudinal directions, and 2000 pounds in transverse directions. Sample pairs of hinges may be tested in the laboratory. The following results were obtained in tests of all conventional 1968 GM passenger car door hinges: Load at which test was terminated (without hinge failure) Senator RIBICOFF. Thank you very much. We may have some further questions we will submit to you in writing. Senator Hansen? Senator HANSEN. I have no further questions. Senator RIBICOFF. The subcommittee will stand in recess until 2 p.m. (Whereupon, at 12:30 p.m., the committee recessed, to reconvene at 2 p.m., this same day.) Afternoon Session Senator RIBICOFF. The subcommittee will be in order. Our next witness is Mr. Arjay Miller, of the Ford Motor Co. STATEMENT OF ARJAY MILLER, VICE CHAIRMAN, FORD MOTOR CO.: ACCOMPANIED BY FRED SECREST, VICE PRESIDENT AND CONTROLLER Mr. MILLER. Thank you, Mr. Chairman. I am Arjay Miller, vice chairman of the board of Ford Motor Co. With me today is Fred Secrest, vice president and controller of our company. As you are aware, Mr. Chairman, my statement was filed with your subcommittee on March 29. In order to conserve time, I would like to proceed with the questions. FURTHER PRICE INCREASES PREDICTED Senator RIBICOFF. Thank you. Mr. Miller, on March 26, Jerry Flint of the Detroit bureau of the New York Times wrote an article that said the automobile industry was trying to tempt the consumer into spending more than he planned. He said that that would be the theme of the industry for 1969. Mr. Flint wrote: Executives here believe the automobile industry has been getting the smaller supplies of the consumers extra dollars. According to the article, one of the special features planned for 1969 is a fully carpeted trunk for the luxury Lincoln. Another feature is hood-locking pins, chrome bolts and chains to hold down the hood, as is common to racing cars. These reportedly will be on Mustangs, Cougars, Fairlanes, and Montegos. Also contemplated are new safety features which the public wants and needs. And the article says "there is no question that prices will go up." Mr. Flint's statement is that they will rise about the same as 1968. Now, this illustrates the problem we face. We want safety features, yet they are combined with other styling changes. And none of us know whether we are actually paying for safety or being lured into spending more money than we otherwise had planned to. ABILITY OF CONSUMER TO CHOOSE QUESTIONED Basically, in spite of what the previous witness said about the consumer, isn't he basically a captive consumer? How much choice does he have? You know, it is all right to say that you can go and buy a foreign car if you want. But there are a lot of people that I know who won't buy a foreign car. They take seriously the balance-of-payments problems. They might like a foreign car. But they are in business. They feel that they ought to have an American car because their products are sold to American consumers. When all is said and done, outside of styling, for the preference for Ford or Chrysler or General Motors or American-how much choice is there? When it comes to price, aren't your prices basically the same, even though we always talk about the great competition between the four of you! (The news article referred to follows:) EXHIBIT 27 [The New York Times, Tuesday, March 26, 1968] AUTO MAKERS SEEK TO UPGRADE THE '69-MODEL BUYER BY INDUCING (By Jerry Flint) DETROIT, March 25-Upgrade. Dazzle the buyer with more luxurious, more gimmicky cars that will tempt him into spending more than he planned. That is the automobile industry's theme for 1969. Executives here believe that the automobile industry has been getting a smaller slice of the consumer's extra dollars. |