Detroit Free Press from Detroit, Michigan • Page 32

it. Detroit ffxitVtttns In This Section American Exchange 14B New York Exchange 15B Over the Counter J6B Toronto Stocks 17D Detroit's Paper 'Business Report SUNDAY, DECEMBER 4, 1971 12-B Car Sales Crack Another Record. the ticker Into account the fact there was an additional selling day this year, its daily sales average was off one percent. A Rude Awakening pated repeal of the seven percent excise tax would more than offset the Impact of th Phase 2 price increases on new car sales. Scattered early reports from the foreign car companies, meanwhile, showed Volkswagen sales off approximately 20 percent from last November and Mercedes-Benz also down slightly.

Reports from the Japanese Importers were not Immediately available. Chevrolet, Oldsmoblle, Bulck and Cadillac, all establishing new highs for November, contributed to GM's record month. Cadillac was the only one of the five divisions, however, to establish a new peak for the final 10 days of the month. Both the Ford and Lincoln-Mercury divisions had all-time highs for the month as well as the final period. Chrysler, with sales of both Its Chrysler-Plymouth and Dodge divisions up on a year-to-year basis during November, registered a 12 percent Increase on the strength of a 17.5 gain over like 1970 during the final 10 days.

American Motors picked up volume for the month, but taking BY TOM KLEENE Pre Preu Automotive writer Automobile dealers, off to their best model year start In history, set new monthly car sales records for the third consecutive month in November. With each of (he Big Three companies showing gains over the same month last year, Ford Motor Co. and General Motors Corp. reported new corporate records for the period. The 847,602 retail deliveries topped by nearly six percent the previous best November showing.

record which had stood since 1965. For the final 10 days of the month, sales of 251,244 new cars fell Just short of the record for that span. The full month performance was right on the target with preliminary estimates of 840,000 to 850,000 sales for November and strengthened the industry's prospects for a month during December, when there Is a normal seasonal decline. Industry sales executives semed confident that the antici Sale ef domeitle-butlf ptiienger cart only during the month of November in 1971 and 1970 and for the first 1 1 monthi ef both yean, ai reported by the four war ai followu Nov. Nov.

Year Year 1972 1970 1971 1970 AMERICAN MOTORS CORP. 24,293 23,546 235,725 238,250 CHRYSLER CORP. 130,092 111,573 1,280,597 1,245,483 Dodge Diviiion 50,704 42,632 494,780 463,501 Chryiler-Plymouth 79,388 68,941 785,817 782,428 FORD MOTOR CO. 232,415 211,385 2,206,310 2,038,898 Ford Division 187,351 173,926 1831,210 1,705,011 Lincoln Mercury 45,064 3 7,459 3 75,100 3 33,887 GENERAL MOTORS CORP 460,802 88,645 4,305,159 3,167.554 Chevrolet 232,323 51,025 2,121,088 1,594,172 Pontiae 68,081 15,069 660,689 522,970 Oldsmobile 69,584 11,816 649,982 436,050 Buick 63,618 1 9,617 627,567 466,774 Cadillac 27,196 1,1 IS 245,833 147,588 INDUSTRY TOTALS 847.602 435,149 1,027,791 6,690.185 (For Tycoon BY BRIAN BRAGG Free Frew Buslneu Writer The advertisement went something like this: EXECUTIVE POSITION AVAILABLE Ofiers practical top-level management experience. Chance to tart at the tup and learn varied operational tech- niques of multi-level corporation.

No evious experience required. The qualifications were easy to meet, so I applied for the oj. Now the world would see a hard-driving industrial tycoon in action! I was Snoopy versus the Red Baron; Walter MBtty in a pin-striped Brooks Brothers. "Jtiwas all a game, of course, a mail-order correspond-encearrangement in which I would attempt to revive a V. "6 SUBURBAN DEVELOPER CONVINCED The Turbine Engine: i Auto Industry's Ace? py stagnating industrial firm.

I ordered the $45 course through the Dearborn-based Society of Manufacturing Engineers. The material arrived from the Larchmont, N.Y., school which conducts the course and I saw that the fictional company I headed was in ill health, indeed. It had a 22 percent share of its market against two competitors. It was spending practically nothing for advertising, for research By TOM KLEENE Free Press Automotive Writer To hear Sam Williams tell it, the "moment of truth" for the automotive gas turbine engine is about four years away. The president of Williams Research of suburban Walled Lake, forecasts 1975 will be the year when the automobile manufacturers will have the answers that will convince them the low-emissions turbine is the way to go.

Allowing another three years for tooling of new or revised engine plants, retraining of personnel and further development of manufacturing processes, the Williams timetable calls for initial U.S. production of turbine power for passenger Bfti'l plliS fl V-' it it 4 and development or for improving manufacturing techniques. The rules of the game allowed the player to assume fhat every dollar spent for these items would be effectively used. There were no worries about whether the marketing vice-president might blow a wad on a low-rated TV show or whether the chief might spend too much time analyzing the martinis at his favorite bar. JT WAS simply: Spend a dollar, get a dollar's worth.

Armed with this advantage over the real world, I decided to cet the eame over with quickly. I'd either push the company New York City to be used In the city's program of testing low-emission alternate engines under urban driving conditions. This power plant was developed and manufactured by the Walled Lake company under a $240,000 contract financed largely by the federal Environmental Protection Agency. Using compressed a 1 to drive its turbines, the compact and relatively vibration-free engine runs on a variety of fuels Including kerosene, yielding about 15 miles to the gallon. Admittedly, It requires six or seven seconds to warm up when the Ignition key is turned, and it Isn't likely to set any records pulling away from a traffic light.

Williams carefully ticks off the little turbine's pluses, including less than half as many parts as the conventional engine, no radiator or cooling system, only one spark plug, no reciprocating parts, low maintenance cost and lighter weight. Most Important, Williams believes, is that the Hornet's engine is similar to one that unlike the conventional spark-ignition power plant has met all of the tough 1975 federal emissions standards. BUT MORE development work is required to meet the 1976 oxides of nitrogen (NOX) requirement, he pointed out, companies and followed right on through to production," he said. "I see a growing number of people who have concluded that the turbine is THE alter-, native to the conventional engine." Williams' credentials for speaking knowledgeably about the prospects for the automotive gas turbine are impressive. The former Chrysler Corp.

turbine engineer is the sole owner of Williams Research, which he and three others founded in 1954 to prove that there are many applications for small gas turbine power plants. Over the years of steady growth, the four-man payroll has grown to 350, and Williams Research has become the world's largest producer of miniature turbine power plants for military. Industrial, marine and small aircraft applications. The company's annual sales volume now exceeds $10 million. While literally creating a market for small turbines that never existed before, the Williams organization also has been ceaselessly researching and developing automotive turbines, including producing prototypeversions for General Motors and Volkswagen.

IN JANUARY, an American Motors Hornet sedan, powered by a Williams 80-horsepower engine, will be delivered to to the top or drown it in a sea of red Ink. cars in 1978. AND FINALLY, Williams says: "During the 1980s, the turbine will become the predominant oasseneer car engine and further tightening of the air I increased the advertising budget by two-thirds; I spent a -million dollars developing a new product; I doubled Che production schedule. Lo and behold, when the results of these moves came back through the mail, my company had nearly doubled its unit sales and had grabbed a 42 percent market share. The company suffered a big net loss in the period, but I had high hopes for the future.

The competition had better watch out! I 'kept my product price the same, continued to spend heavilv for advertising and began to spend money to im- "jproye- manufacturing techniques. Sales again took a big jump, the books showed a moaest prom ana was nappy I had steDoed ud production schedules. My company's pollution standards will give the gas turbine even more reason for being." Such bullish prognostications may cause raised eyebrows among those who are less gung-ho about the turbine, but that possibility obviously does not shake Williams' confidence. "I em convinced that the present development programs unlike those In the '50s and '60s will be oontin-ued at all of the automobile market 6hare was now 51 percent I was the General Free PTest Photo by THOMAS R. COPI Motors of my field! "But now the competition those bleeplty-bleeps struck back.

They cut prices. I felt I had to respond. I matched their prices and boosted the advertising budget by 60 percent. I borrowed $2 million to increase plant capacity and spent another bundle to improve efficiency. The solid profits I had envisioned began to fade, but there was no stopping now.

It was lonely on the bridge as I steered my corporate ship through the shoals, but the en- The WUliams Research 80-horsepower gas turbine engine, Installed In an AMC Hornet for New York City emissions testing, undergoes the scrutiny of Environmental Protection Agency administrators Donald M. Mosiman (left) and Dr. John Middleton (center). Company president Sam Williams Is at right. gines were still turning full steam ahead.

Advertising was Increased again, and sales responded. But, strangely, profits remained on a plateau. And it was alarming to watch the company's cash balance dwindle. I noting that a more-advanced version of the engine is in the works. "The NOX problem can be solved in the next couple of years, and the changes that are going to be made to reduce this type of emission can be made without getting us in trouble on unburned hydrocarbons," Willlamd said.

Referring to the federal requirement that 1975 and 1976 engines must continue to meet the standards for 50,000 miles, he added: "We know from our experience that the turbine runs for long periods of time without losing its effectiveness." Williams maintains that be added to it," he said. WILLIAMS more or less discounts the long-range prospects for the Wankel rotary piston engine, on which the automobile manufacturers currently are making major development investments. "I look upon the Wankel as another version of the internal combustion engine which may have sound reasoning behind it for interim production," he says. that require considerable amounts of hand labor. But he believes that new processes will be developed that will adapt these parts to the conventional mass production techniques of the automobile industry.

"I believe that by 1975 there will be hard evidence demonstrating that the gas turbine engine will be cheaper to produce than the conventional engine plus the special emissions control equipment that must present turbine technology Is applicable to any size engine that is required for passenger cars. "It does get more difficult as you go to smaller engines, and that is the reason that our 80-horsepower engine (on the Hornet) is more than somewhat of an achievement," he said. On the thorny question of manufacturing Williams acknowledged that there are a small number of key parts Jacobs Holders Recall the Chill Of Siberian Era BY HUGH McCANN Free Frew Boslneee Writer For some of the longtime stockholders of the F. L. Jacobs the atmosphere at the annual meeting in the Northland Inn last week was reminiscent bf a period In their company history that they would like to forget Once again the rumors were floating around There were disillusioned stockholders once more waiting for the count of tne proxies to see if they had won control of the company There were the questions and counter Questions aeain this never did figure out just why that happened when the company was making money; maybe it was because accounts receivable were shooting up faster than profits up, you bums" I screamed as 1 fought to balanc the books).

At the conclusion of the final accounting period, I found that I would have to borrow more money to replenish my company's working capital. The com- Friendly Banker Uncle Sam Eager to Finance Exports time about what was behind management's proposal to almost double the number of authorized shares of common stock And there was the admission by Jacobs President H. C. Olsen that the company ek -i-fi pany was still profitable, though I'm sure my ad agency was rolling in dough at my expense. My company still had over 50 percent of the market, even though the competition had again undercut prices.

But I was glad the game ended when it did my company was surely a "growth" company, but the financial analysts on Wall Street would soon have grown chary of my super-optimistic earnings projections. IN THE END, the school Management Games Institute graded my performance. My company ranked at the very top-in sales volume and in the top two percent of total assetj among other students who had been given the same fictional company to manage. But in total profits, my company ranked In the bottom one-eighth of the class. What a disgrace.

The game was a worthwhile experience, offering some rudiments of accounting, scheduling and marketing strategy. The SME in Dearborn offers this and two other courses one on the use of data processing and the other on personal career development. It might be appropriate for me to sign up for the latter, to learn how to explain my dismal showing as a manufacturing tycoon. McCord Eyes Payout Hike McCord Corp. chairman C.

F. Hogan told the annual shareholders meeting in Portland, last week he plans to propose a higher dividend for the company's stock next year. He said he'll ask the directors to either boost the cash payout or declare a stock dividend. He said his proposal would be based on an expected Improvement in profits for fiscal 1972 ending next Aug. 31.

Margin Levels Lowered WASHINGTON (AP) -The Federal Reserve Board late last week lowered its requirement for buying' or carrying stock from 65 to 55 percent, effective Monday. No change was made In the 50 percent margin requirement for buying or carrying convertible bonds or In the 70 percent "retention requirement" applicable to under-margin accounts. In lowering the stock margin requirement the board noted that margin credit extended by brokers was about $5 billion at the end of October, which was down from a peak of about $6.5 billion reached during June of 1908. The action means that persons buying stock may borrow up to 45 percent of the purchase price. Under the 63 percent rule, purchasers could borrow only 35 percent of the value ct the stock.

A lower margin requirement Is considered an Incentive for greater investment in stocks. The 65 percent margin requirement on common stocks has been In effect since May 6, 1970, when it was lowered from R0 percent, It also has paid back more than 75 percent of the $1 billion at the rate of $50 million a year. The rest of the bank's profits, which derive from its six percent interest rate, are used for extra loaning power. This year, Congress revitalized Eximbank's charter by doubling the former $10 billion overall ceiling on loans and guarantees, and by giving it authority to make short-term loans of less than a year's duration. In addition, Congress gave the President authority to pcr-m i Exlmbank to support In Communist' countries, if he believes trade with the particular countries is In U.S.

best Interests. So far, Yugoslavia and Romania have qualified, Lllley said. LILLEY SPOKE before a morning seminar for businessmen which was co-sponsored by the Great Detroit Chamber of Commerce. He brought w4th lilm two men and an organization chart, complete with direct dial phone numbers of all five Exlmbank directors and top Eximbank executives. Typically, Eximbank requires the foreign buyer to pay Turn to Page 17B, Column 1 BY TIM HOLLAND Free Fran luilnese Writer Tom Lllley returned toDe-froit this week to spread the good news.

Uncle Sam, the former Ford Motor Co. executive told everyone wh6 would listen, wants to make It as safe to sell to someone on the other side of the world as if is to sell to someone on the other side of town. "There really is no minimum dollar size of a deal," Lillcy said warmly, shaking hands and passing out business cards. Uncle, it seems, has a balance of payments problem. Sure would be nice, Uncle thought American businessmen would sell more things abroad.

THE TROUBLE, Lllley said, Is the rules of the game. Foreign countries have one set of rules for their businessmen who deal at home and another set of rules for their businessmen who deal away from home. Undle Sam figured he needed a new rule book for foreign sales, too. And when he went looking, he found the now rule book already had been written. would lose $75,000 to $100,000 in its first quarter.

JACOBS IS headquartered In Southfleld. It has three operating divisions: Grand Rapids Metalcraft division, with four plants in Grand Rapids; Continental Did Casting division and McCarthy Plastics division, each with a plant In Detroit. The six plants employ about 750 persons. The company supplied the automobile Industry with $24 million worth of stampings and die-castings In the year ended July 31. Its profits on that volume, $176,357 (18 cents a share), represent a continuing decline which Is one of the reasons for the proxy contest.

In its 59-year history, the F. L. Jacobs Co. has survived proxy fights, attacks by irate VS. senators, ruthless exploitation by a notorious empire builder, censure by the New York Stock Exchange and the Securities and Exchange Commission.

And the end of Its problems may not yet be in sight. Jacobs was started In Detroit as small, family-owned company by Fred L. Jacobs and his father, Clare S. Jacobs. But the man who made It a national company was Alexander Leonard (Sandy) Guterma, the son of a Russian czarlst general.

Born In Irkutsk, Siberia, and educated In missionary schools In China, Guterma began a career of business Imperialism in the Philippines. His forte was sugar and cocoanut oil with side Interests In shipping, soap, cosmetics and gold mining, The tall, prematurely bald Siberian landed on the U.S. Mainland in 1950, when he was 35, and' took up the pursuits of a Florida farmer. IN 1058 HE over as president of F. L.

Jacobs, later ascending to chairman. During his three-year tenure, the company's Interests roamed far beyond the mundane world of auto parts. Guterma reached out and embraced such companies as Mutual Broadcasting system; the Hal Roach Studios In Hollywood; Sym- Please Turn lo Page 17-B, Col. 1 A Tom Lillcy If was In 1934. President Roosevelt had just recognized the Soviet Union.

He wanted a new bank to finance trade with Russia. The Export Import Bonk of the United States Exlmbank to its friends is what he ordered. He gave It $1 billion from the U.S. Treasury to put It in business. Like ko many federal agencies, Exlmbank never has gotten around to doing what It was organized to do, allowed Lllluy, a director of (he bunk.

But It has supported $11 billion In exports to countries other than Russia 29 percent of It within the past two years. "I Long Dry Spell liquor retailers will have a long holiday at ZXMstmas this year because Christmas Day is on Saturday. X3JEr will be no sale or liquor, beer or wine between p.m. -wistmas Eve and 7 a.m. Dec.

27. Normally, retailers be allowed to resume selling the day after Christmas, tor that's a Sunday this year. So there'll be a 58-hour dry spell..