Swing (Jan-Dec 1945)

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44 S. win 9 January, 1945 of what industry seeks to achieve, a better understanding of industry's role in the economy and a wider recognition of economic reahties. It is not my purpose to define in detail what is believed to be essential to insure an expanding economy in the longer-term postwar era. That is another matter. Herein let me state in general terms the underlying beliefs of the management as to the proper policy to pursue and why, as the business passes from war to peace and into the longer-term position beyond. A 500 MILLION DOLL.'\R PROGRAM General Motors' postvvar program divides itself into five component parts. First, expenditures must be made for rearrangement in order to reorganize production facilities to resume production of motor cars, trucks and all other products that constitute our peacetime order of things. Generally speaking, every plant must be stripped to the bare structure and laid out along entirely different lines. Second, equipment sold to others as a part of the wartime cooperative program must be repurchased or replaced to restore prewar capacity. Third, the necessity of a complete reorganization of facilities will afford an opportunity of modernizing all equipment in line with existing standards of technology. Industry must always seek lower costs because that means lower selling prices and hence increased vol ume with expanding job opportunities. There has been little replacement of machinery and equipment during the war. All facilities have been subjected to severe usage involving continuous operation under unfavorable operating conditions with less than normal maintenance. Reserves provided by General Motors for depreciation and obsolescence will have increased in three years by an aggregate amount of something like 150 million dollars. Fourth, prewar capacity will be expanded to provide facilities to meet the potential but abnormal demand of the immediate postwar period, all in proper relationship to what the longer-term possibilities have been estimated to be. In our automobile operations new assembly plants are contemplated to effect better distribution of cars with a resulting savings in cost. Aside from our motor car interests we have other products to develop. Some activities, like our ElectroMotive Division, are still in early stages of development. Fijth, expenditures will be needed to provide better facilities and service for our employes, as well as for an expansion of other facilities not directly related to production. General Motors' postwar concept has been dramatized as a "500 Million Dollar Program." Expenditures are likely to reach, if not to exceed, that amount. The funds for these expenditures, as well as the additional working capital required, will be provided out of general corporate