Sunday Gazette-Mail from Charleston, West Virginia on July 13, 1975 · Page 18
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July 13, 1975

Sunday Gazette-Mail from Charleston, West Virginia · Page 18

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Charleston, West Virginia
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Sunday, July 13, 1975
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Page 18
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Jul v 13,1975 Smidav New Car Sales To Boom in'76, Murphy Feels Rogers Morton Views Energy 'Nation Is Entering Transition 1 DETROIT i.? 1 - Thomas A. Murphy, General Motors Corp. chairman, says 1976 will be a boom year for new car sales even if sticker prices increase and gasoline climbs to 90 cents a gallon. Murphy said skyrocketing fuel costs will not dampen efforts to end the two-year slump which has forced 150,000 auto workers, including 88,000 at GM. onto the jobless rolls this year. He even suggested higher gasoline prices may stimulate sales by forcing motorists to purchase new, more fuel-efficient vehicles. "I don't think we're going to have dollar- a-gallon gasoline," he said in an interview with The Associated Press. "But our studies indicate that certainly prices as high as 90 cents should not be a great factor. "I could hypothesize (higher fuel prices) Nation Moving Toward New Energy Style, Morton Says By Stan Benjamin WASHINGTON (API-Commerce Secretary Rogers C.B. Morton says the nation has started down the road toward more energy-saving life styles. He says the next 20 years will see the nation fueled more by nuclear and solar energy and less by coal and oil. Morton said in an interview that the United States would not dramatically run out of oil and natural gas one day, but rather would turn slowly to other fuels as traditional fuels become increasingly scarce and expensive. He said energy prices probably would continue to increase, but not indefinitely because price hikes would stimulate inventive ways to restrain costs and improve efficiency. In fact, Morton said, the changes are already taking place, most visibly on the nation's highways. * * * HERE ARE excerpts of the interview in which Morton projected the United States' energy future: Q. How long do you think the United States can continue to rely on oil and natural gas for its basic energy supply? A. Nobody can give you a precise answer, because reserves are always measured as ranges... and the other side of the coin is, you don't know how much is going to be used. But I think a good ballpark estimate is that we're going to be in the fossil-fuel age for 50 years. But we're probably going to be in it, in the concept we're in today, more like 25 years; I'm sure there will be uses for oil beyond 25 years, important uses, perhaps in the petrochemical field. But I think the price of oil and the scarcity of oil at that time will mean that it will not be used as a basic heating fuel or basic transportation fuel. More economical fuels will come along, such as solar energy, nuclear energy, possibly geotnermal energy and others that will begin to phase in. I think that's more the way to look at it rather than to put a pin on the calendar at a specific date, that on this date we will have no more oil. It won't work that way. It will be a long phasing out, paced by increased costs and available technology. Q. What about coal? A. The first conversion, of course, will be to coal because of its abundance. We're doing that now. The President's projection is that at $11 per barrel for oil--and we've passed that point--it was perfectly feasible to double the use of coal between now and 1985. Q. If coal is converted into oil or gas, couldn't that keep the nation going on a petroleum economy after natural petroleum gets scarce? A. Well, I'm not sure that we won't have gaseous fuel. There is a tremendous in vestment being made now in the development of coal-gas. We may be looking at hydrogen gas, at methane made from organic materials- wood products, even field crops. I'm not saying liquid fuels and gaseous fuels are necessarily going to be phased out,.but the source of those fuels may be changed. Another aspect is how oil shale fits into the general economy of energy. It's not like pumping out a tank and suddenly it's dry. The resouces of this kind become more and more expensive, because it takes greater investment of time, energy and money to produce them as they become more scarce. And then as soon as there are available processes which can be substituted at a more economically favorable basis, those substitutions take place in the marketplace. Q. How will that show up? A. Our use patterns are going to change -- as they are doing now. The new cars are small cars, basically, as you see them on the highways. We're seeing a response to higher priced gasoline. We've seen the mistakes made in all- electric houses built where electricity was generated principally by oil, and these tremendous fuel pass-throughs have actually incurred costs to the consumer greater than the financing costs of the homes themselves. I would wager that there are going to be very few houses similar to those built and sold . . . we've learned our lesson. Jawbone conservation doesn't work-the 55-miles-an-hour speed limit was an example of that. Everybody got patriotic suddenly and they all drove 55. Now I get on the road and go 55 miles an hour and you're almost overrun from the rear. So, I think during the next two generations we're going to be much more like the Europeans in our energy use patterns and our industry, which is scrambling for a very substantial gain in energy-use per unit of o u t p u t . . . because it's a quick way to make a better return on investment. We are in much better shape than any of the European countries or the Japanese in being able to make an orderly transition from a fossil-fuel to a more sophisticated fuel economy. We should really count our blessings, because Japan is going to have a very difficult time, in my opinion in the latter part of this century. They have no other energy sources except what they can procure. But we are going to have to substitute a lot of things for the undisciplined use of energy in our recreation and in our daily lives over the years. Q. Energy prices have risen suddenly in the past two years. Do you think they will keep on rising? Q. We're digging deeper into the earth, we're having to go to the offshore areas, we're superimposing tremendous environmental costs on the processing of all these fuels. So I don't see how it can go any way but up. being a positive factor if people know that new cars are more fuel-economical than the cars they are now driving." One new GM product Murphy hopes will sell strongly is the Chevette. a minicar set to debut this fall and designed to compete with the smallest imports. Murphy gave The AP the first official confirmation of the company's Chevette plans and said he hopes the car will help dispel myths about the superiority of foreign models. The Chevette will be smaller than GM's subcompact Vega, and the company believes it will get up to 40 miles to the gallon. Murphy said he is confident 1976 will be a strong year for the industry, with car sales "comfortably about 10 million" units. -- almost a 20 per cent gain over 1975's expected level. ' * * * INITIATIVES like the Chevette will help reduce the imports' share of the market to 15 or 16 per cent for the year although foreign makes captured a record 20 per cent in the first half of 1975, he said. His bullish forecast is in line with estimates by other auto executives, but well above projections by most financial analysts. Murphy said he feels the end is near for the industry's worst sales slump since the Great Depression. "(1976) should be a strong year. If you look at all the statistics, you can prophesy a real boom year, assuming there aren't any major upsets," he said. It was the unexpected Mideast oil embargo in the fall of 1973 that kicked off the current slump. Murphy said final 1975 sales, including imports.'should reach 8.5 million, although only 4.1 million were sold in the first six months. Sales in 1974 were 8.9 million after the gasoline shortage and recession sent the market into a downslide following the industry's record 11.4 million performance of 1973. On prices, Murphy said GM would feel justified in charging enough to compensate for about $200 per car in unexpected cost increases since last fall plus ?300 in previous unrecovered costs. But he said he feels constrained by weak consumer demand. "If we only look at costs, obviously prices have to go up," Murphy said. "They should go up, and they should go up by a major amount. But we also have to look at the realities of the market." He declined to say what the actual increase will be this fall but stressed: "Prices will have to go up." GM, Ford Motor Co.,and Chrysler Corp. have hinted they may raise prices as much as $300 a car this fall, although analysts say consumer resistance will keep the Thomas Murphy Views Car Sales '1976 Will Be a Boom Year' hikes in the $150 to $200 range. · * »' MURPHY attacked expected demands of the United Auto Workers in 1976 contract talks for a shortened work week. He said it would seriously hurt the industry's ability to compete with foreign products. "There's no such thing as a free lunch. You can't have high wages without commensurately high output... It's nonsense to talk about a 36-hour week at 40 hours pay unless we get the same production." UAW officials are seeking a shortened work week to increase employment in the industry. Hourly employment at the four major car companies has declined by nearly 200,000 since the boom year of 1973. Murphy said he hasn't held any . "summit" meetings with heads of the other domestic makers since he took over as chairman in December. 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