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Finform you, the public, and Congress about the cost of meeting the
Senator RIBICOFF. Mr. Miller, from what you have just said, I do not know why we have to bother taking any more of your time. I appreciate your candor. I have a lot of questions. But you have just
told us what we want this is something you know, and would be EF willing to make available. You suggest a different form than I have
proposed. Frankly, I like your proposal better than mine. hi
Vír. Miller. It is a rare privilege, Senator.
Senator RIBICOFF. It is easy. No sense of making something comL plicated if it can be done easy. I just wonder if the representative
of Chrysler who is here would react the same way as Mr. Miller has É reacted. I do not know. Have you heard Mr. Miller's testimony? STATEMENT OF P. N. BUCKMINSTER, VICE PRESIDENT IN CHARGE
OF CORPORATE STAFFS, CHRYSLER CORP. Mr. BUCKMINSTER. Yes, sir. I have been paying attention closely, Senator. I am not quite sure exactly what Mr. Miller representing Ford has agreed to give the Bureau of Labor Statistics. But as we said in our testimony, and as I am prepared to say again here later on, we have cooperated with the Bureau of Labor Statistics. We think highly of their ability to analyze these statistics. They do not use everything we give them. They have their own independent sources of information. We certainly are willing to give them what they need to inform the public, for purposes of the Consumer Price Index and all the rest, to adequately inform the public what the price of safety is. They have done it, and we have supplied them with information in the past. We are willing to keep on doing what we have done.
Senator RIBICOFF. Generally, the Bureau of Labor Statistics has taken the point of view there is an element of confidentiality which must be preserved at all costs. They have a relationship with you, and they want to honor it. We understand that. Mr. BUCKMINSTER. We would hope that could continue.
DISCLOSURE OF BASIC COST DATA
Senator RIBICOFF. That is right. But Mr. Miller has indicated that this information is available, there is no sense in trying to play cat and mouse with this problem, the public is entitled to know what the cost of safety is, that there is a responsibility upon the part of the automobile industry to make this available to them. Mr. Miller says that, as far as Ford is concerned, he has no objection to making all the basic information available to the Bureau of Labor Statistics, and has no objection to the Bureau of Labor Statistics making this public, either through Congress, or a report to the executive branch, so the consumer will know what the price of safety is, or what the price of safety standards are --whether past safety standards or new safety standards. We have determined some of the costs—this is what it costs you-we think we have some figures on some of your costs. I again won't tell you which company. That standard 104, two-speed wiper-washer, $3.91. Outside remote-control mirror, standard 111, $4.28. Standard outside mirror, standard 111, $1.30. Inside nonglare mirror, 89 cents. Seat belt,
$2.25, standard 208. Backup light, $1.48. Padded visor, standard 201, $1.55. Emergency flasher, 66 cents.
Now, basically I understand that these are your costs. I understand that these are your direct costs. I think it would be most helpful for the public and for everyone concerned to know just what we are talking about. I think it is a very gratifying offer. As I say, if I felt that Chrysler and American and Ford and General Motors agreed—I would close these hearings, and try to work out with the Bureau of Labor Statistics how this could be worked out. To me, this is the best way to do things. I think as little legislation as possible should be passed. I do not believe in putting something on the statute books just to pass a law. I have always felt that I would like to see the day where Congress would repeal more laws than we passed.
Mr. BUCKMINSTER. Senator Ribicoff, this was our recommendation, in our submitted statement which is on file, and as I was planning to say again later on.
Senator RIBICOFF. Is someone here from American Motors ?
STATEMENT OF J. C. SECREST, VICE PRESIDENT OF FINANCE,
AMERICAN MOTORS CORP.
Mr. SECREST. I am John Secrest, vice president of finance, American Motors. In our basic proposal we had suggested that actually the Bureau of Labor Statistics be the agency that defines for the public the composite cost of the safety standards. I think doing this would be adequate. In other words, if the safety standards incorporated in 1968 amount to $30 or $40, this certainly should be made public information. In our testimony we have suggested the feasibility of having this information supplied through the National Highway Safety Bureau, because we feel the manufacturers have an obligation to help in establishing these safety standards initially-in other words, weighing the performance benefits of these standards versus the costwe felt the National Highway Safety Bureau could put these into a composite form, because they will differ by individual models, even for a particular company, as well as between companies. We felt that the National Highway Safety Bureau could give this information to the Bureau of Labor Statistics as prime input data in their derelopment of the price of these. So, in essence, we think the Bureau of Labor Statistics is the proper route to do this. We do not have our costs of the individual sa fety standards developed in the way that I understand Mr. Miller is defining them. For all the components of a car, we have the standard costs of each and every component of a car that build up in effect to our standard cost of the car. But as to tracing these new standards that, say, are incorporated as a part of the car, where we are redesigning the car-for other reasons at this particular time, incorporating these standards in a new product, like the Javelin-we do not isolate what the safety standard per se is in any meaningful manner. In other words, we just develop a design that we think accommodates the safety standard. It also might provide for better styling than the standard would necessitate itself. It might provide for passenger comfort, it might have some cost-reduction
I, se possibilities, some durability aspects. All of these factors get blended
into a design. We cannot honestly isolate, except on a rough judgis. I mental basis
, the cost of the safety standard. If you are talking about 10 best supplying to the Bureau of Labor Statistics the rough judgmental at an estimate or approximation of the safety standard, then we can do that, ,ifle and would be happy to do that.
Senator RIBICOFF. As I understand it, there would be a willingness, rand company by company, to break down the equipment figures that you he best give the Bureau of Labor Statistics—and they have the permission dbeve to make it public property.
COMPOSITE COST FIGURES SUGGESTED
Mr. MILLER. Yes. I believe what we are saying—the detail you supplied there, and what Mr. Secrest is saying-we do either have avail. able I will speak for Ford—if it were not readily available, we would make a judgment as to what the cost of meeting the standard was. Make this available in all detail to the Bureau of Labor Statistics, five, eight, seven, or any other number—the statistical sample—and they would take the number for us and the three models for American Motors, and five from GM and Chrysler each, and total them up and come out with a single composite which would disguise the information in the company. We think that is appropriate--because if it costs us more money to meet a particular standard than it does somebody else maybe I should say less, because that is what we get paid to do-it should not be priced any less because of that factor. As a matter of fact, we find some of our cars, it may cost four times as much to meet a standard on a Mustang as a Mercury, and a Mustang costs less. That is because this was a lamp on a seat, and we had to redesign the Mustang and not the Mercury. So the averaging aspect of it here is what I should think that you and the public would be after-the single figure, instead of all this detail. That is what we would be prepared to do. And I think I would interpret—I believe that the details can be worked out with the Bureau of Labor Statistics, they do have competent people, and we would like to work along the lines you suggested.
Senator RIBICOFF. In other words, you could preserve the element of confidentiality by the Bureau of Labor Statistics coming out with a composite cost ! Mr. MILLER. Yes, sir. Senator RIBICOFF. Or price of safety features. Mr. MILLER. This is the same concept they have in the Bureau of Labor Statistics. And there is some allowance for markup in the production value concept. So we move off the cost into the price feature, which I think is the intent of your bill. So it does meet the intent of your bill in the same fashion.
AVERAGE COST INFORMATION FOR CONSUMER
Senator RIBICOFF. In other words, you were also trying to say that if you had 10 safety items, let's say, for simplicity, that basically it could
very well be that Ford could manufacture items 1, 2, and 3 a lot cheaper than General Motors, and General Motors could do 5, 6, or 7 cheaper than you could, and if you had developed a manu
facturing process that was much more economical than your competitor, you shouldn't be penalized. This averaging out is a general overall cost of the four companies, we assume, trying to operate as efficiently and effectively as they can to justify their existence, to make money for the stockholders, and to be as competitive as possible. But this will give the public the general knowledge of what the overall price of safety is for automobiles in the mass and individually in the United States.
Mr. MILLER. I am impressed with your grasp of this subject. I think that is exactly right.
Senator RIBICOFF. And then this would average out per standard. And then you could figure out the economic as well as the human factors involved in all the safety features.
Do you have any questions, Senator Hansen?
EVALUATION DOES NOT REQUIRE ENGINEERING DEGREES
Senator HANSEN. Mr. Miller, previous hearings before this committee brought out the fact that the Bureau of Labor Statistics does not have on its staff, to evaluate auto prices, engineers to assist in its evaluations. If the BLS were to employ the talent of engineers
, do you think that would have the effect of improving the reliability of BLS inclusions? That is, would engineers on the Bureau of Labor Statistics' staff be helpful in coming up with answers more specific than they are at the present time?
Mr. MILLER. We have been impressed, Senator Hansen, with the competency of their people. And I would almost say that the particular educational background is not so important as the attitude and the inherent ease with which individuals can handle certain figures.
In our own company it so happens that the person that we have working with the BLS, although he is in finance, does have an engineering degree. This may well be true in the Bureau of Labor Statistics. But if they felt they needed that kind of person to get them there, I should think it would be helpful to have an engineering gree, but not necessarily, sir.
INCREASE STATUTORY PRICE LIMIT FOR GOVERNMENT CARS
Senator HANSEN. Thank you, sir. .
We had quite a bit of discussion on the fact that the limit that has been permitted by the Government, as I understand it, for several years now, the upper limit, cannot be exceeded by the various automobile manufacturers in bidding on certain type of touring car.
I would like to ask you if Ford Motor, either formally or informally, has discussed the raising of the statutory limit with the General Services Administration.
Mr. MILLER. The answer to that is, “Yes, sir,” we have requested that consideration be given
Senator HANSEN. You think it should be raised?
Mr. MILLER. Yes. As we indicate in the testimony, the cars that we were selling to the Federal Government during the 1967 model year were sold at prices averaging 43 percent below retail, and 26 percent below wholesale, and if the Government were our only customer we
would soon go broke. I was pleased to see at the February 2 hearings that Senator Ribicoff recognized this problem and indicated he did not believe the Federal Government wanted to buy merchandise from any manufacturer at a loss. And we hope and expect that something will be done in this area.
Senator HANSEN. I was surprised to learn this morning that-if I understood correctly—and please correct me if I am in error, Mr. Chairman—the excise tax applies only on the purchase of automobiles by the Federal Government, and not by State governments. Senator RIBICOFF. That is correct. Senator HANSEN. Do you know of any reason for that? Mr. MILLER. I am told, Senator, that that can be changed by administrative procedure, but that to raise the ceiling of $1,500 requires an act of Congress. It seems to me something could be done to ease some of this pressure on the price.
AUTO QUALITY HAS IMPROVED
Senator Hansen. Has the statutory limit remained unchanged for some 10 years!
Mr. MILLER. Yes, sir. It has been $1,500 since 1957, on 4-door sedans. Senator Hansen. As a purchaser of automobiles from Ford Motor Co. Mr. MILLER. Thank you.
Senator HANSEN (continuing). Would the Government be getting more quality, a better article today under this—with this limit being imposed-than 10 years ago ? Has there been an upgrading in quality, performance, reliability, and so forth, of automobiles as compared with the car you were marketing?
Mr. MILLER. We like to think so; yes, sir. We have tried very hard to make them better year after year.
HANSEN PRAISES FORD'S EMPLOYMENT PROGRAMS
Senator HANSEN. I think I have no further question. I would like to say that it is an interesting experience for me to see how we sometimes attach ourselves, or meet ourselves coming around corners. I would like to point out that Mr. Miller, I think, is a native Nebraskan, and I believe I recall that our colleague, Senator Hruska, was on hand when he was recognized not too many months ago and was singled out for the attention and accolades that were then given him because of his interest and involvement in a program gone into by Ford Motor Co., in trying to reach the hard-core unemployed in the ghettos of Detroit. Some rather interesting facts, I think, were disclosed at the time of the accolades that Mr. Miller received, and I would like, if I could, Mr. Chairman, just to make mention of that, because contrary to what a lot of people had expected, as I recall Ford Motor Co.'s experience in going out and waiving minimum requirements of academic attainment, looking almost aside from minor criminal records, if any there were,
and oftentimes I understood this was the case, the people who were thus recruited have continued on in employment. They have had perhans even a better-than-average work experience. You have found some very productive people among that group.