Avanti: Week Year Month

10 Avantis have been framed in South Bend, and 2 per day are scheduled this week. Manufacturing has promised Sales 450 Avantis this month.

Commercial Truck:

Military Truck:

2. Avanti Freeze

Mr. Whitmer reported that the Union notified the Company last Thursday that the freeze was off in the Avanti body department, so the Company decided to send the people home in that department. The Union immediately withdrew the notice and extended the freeze temporarily.

3. Planned Repair by the Workers

Until 2 o’clock last Wednesday, things were running smoothly in the body plant of the Lark-Hawk line. Then, suddenly, there was trouble in the repair area. The workers were making work – planned repair to get more hours. Also, we are not getting very many okayed during straight time, but we’re getting really good quantity during overtime. Mr. Whitmer would liked to have sent the workers in the trouble area home last Wednesday, but it might have meant sending home the rest of the plant also. He doesn’t feel it would have affected sales very much to send them home for about three hours, but it would have had a very good psychological effect on the workers. Mr. Whitmer pointed out the need for authority to act quickly instead of holding a meeting first to see if you can do it. For shutting down the line to be effective, you must be able to send the people home immediately. Mr. Lamberti will discuss it with Mr. Whitmer and noted that this is a typical G.M. and Ford maneuver: when the people have to go home, they raise cain with those who are causing it, and it gets straightened out in a hurry.

We have similar troubles on the Avanti line, which could be lessened if the line were conveyorized. Corvette had the same kind of trouble until their line was conveyorized.

SALES

1. Miscellaneous Items

Before Mr. Detzler began his report, he asked several assorted questions:

a. He asked Mr. Hardig if there was a way to put the key on the right side in the ’64 model, and Mr. Hardig told him that with the style of the board, it wasn’t possible.

b. Mr. Detzler said there are ½ dozen Avantis marked sold and built in December that are still not okayed, and he asked Mr. Whitmer why. Mr. Whitmer said it is true; we have more repairs in there than we should have, but we’re continually working on the hot jobs per instructions from Sales. Sales is calling for 20 and 30 per day – quit calling on these, and we’ll get the old jobs out.

c. Mr. Detzler wondered if the P2 station wagon was anticipated to start in production on March 15 or February 15. Mr. Whitmer will put out a memo giving the production startup date for the P2 wagon.

d. Mr. Detzler asked when the drip moldings on the Avanti would go into production and was told the earliest would be February 20.

e. Mr. Detzler asked about the jet thrust power identification plate; and Mr. Hardig told him that we received them Thursday, and they are going through the release process right now.

2. Dealer Count

Total dealers as of January 11: 2,085

3. Inventories

*Includes 1,634 prior models

4. Wholesale – Retail

Wholesale:

*Does not include GSA

Retail:

The industry daily rate is down 9% from the December 31 period; whereas we will show plus 11% compared to the previous 10 days. Normally, the 10 days ending December 31 is a better period than the next 10 because firms throw business into December for tax purposes. 3rd 10 Days Month of 1st 10 Days December December January

*Estimated. Industry is estimated at 165,000 which would give us 1.2%.

5. Linesetting

Mr. Detzler reported that although Sales is having a little difficulty on model mix, they should be able to fill a 4-day week for the rest of January. Mr. Lamberti observed that the schedule is so close that we will be in trouble if the model mix is not right and asked if Sales had any plans in their program to fill out the model mix. Mr. Detzler said Sales is putting special emphasis on the models we are short. Mr. Whitmer remarked that the new schedule is causing a real problem in the engine plant, and he is concerned that one of these days there are going to be about 100 cars going down the line without an engine in them. They are already shifting manpower out in the engine plant. There is some of this in the body plant also, which is affecting our cost.

The target for January is 10,000 and retail is running at about 62% of that – and Sales expects it to improve as the month progresses.

6. Boiler Room Operation

There has been some pick up on F2 and Y2 models. The dealers feel the standard series will serve as a traffic getter, and this will be its main purpose. Prices ranging from $1,699 to $1,784 are being advertised.

QUALITY CONTROL

1. Avanti – Back Glass Opening

Mr. Capsey noted that the back glass molding fit on the Avanti is not good enough, but we’re having more trouble with the opening than with the glass. Some men from MFG are in to help us work it out.

2. Avanti – Paint

The spotting we’ve been doing isn’t working out well, and we’re trying to do the areas better, even if we have to do the whole panel. The majority of the bodies from Ashtabula have good paint jobs.

3. Water Leaks

The big complaint is water leaking in at the rear door and over the tops of the doors; otherwise, our water-leak complaints are practically nil. Mr. Lamberti asked Mr. Capsey to keep the staff informed as to when new releases go into production.

PURCHASING

1. 1964 Model

The first ’64 model part – the roof – has been released. We are making a decision on the tools on the hood and fender. Mr. Soelch requested Mr. Hardig to release the old model parts so that Purchasing can get started on that.

2. Instrument Board

The vendors are in revising the price: it is going up 85½ cents, and all of the increase is in the vanity area. Mr. Hardig commented that we can take 13 cents out of the vanity part, but it wouldn’t be the Driden (the supplier) part.

3. Headlights

The states of California and Pennsylvania insist on having approval on any new lamps one month before we sell the first car.

4. Diesel Trucks for Sales

This morning Truck Sales is bidding on 500 diesel 45 trucks. There are a number of special items that we have been having done on the outside, but if we can get 500 trucks, we can do a lot on that equipment in the plant at less money. Mr. Corcoran will meet with Manufacturing and Engineering.

5. Containers

The Waldorf paper people are making a complete study of all our boxes and those of our acquisitions and will make us a deal. In the case of the boxes of our Franklin Division, the customer specifies the color of the box, and our name cannot appear on it anywhere.

6. Canadian Vendors

We only have 1-1½ months on parts, and we are letting the vendor do some of the designing work. In trying to deal with suppliers in Canada, we find they don’t have help on hand to do any designing. Mr. Lamberti will discuss this with Mr. Soelch. (They’re basing everything in Canada on 100,000 cars.)

INDUSTRIAL RELATIONS

1. Cutback

Automotive total as of January 11, 1963:

Salaried reduction last week, 6; total now, 82

Hourly layoff:

2. Non-Exempt Program

The general increase has been put into effect for the non-exempt employees. This group will not be reviewed because their salary ranges are 4% ahead of the community. Mr. Gallagher explained that in connection with the general increase, if the increase would throw the person over the top of his range, he would only get a part of the increase. If he was already at the top of his range, he wouldn’t get any increase. Because of this situation, there were about 200 salaried people who didn’t get an increase, some of them for the second time. We want to be sure that supervisors are prepared to answer the questions of the non-exempt people who are not getting an increase. We have sent a chart and a bulletin to supervisors in which we tried to explain how the program was carried out. We have suggested that they tell their people that if our ranges fall below the community ranges, they will get more money at that time.

3. Exempt Program

Our exempt ranges are below community and national ranges. The money approved today will help close the gap a little. Every individual exempt salaried position is being analyzed, and a substantial number of our exempt employees will get an increase up to minimum of salary range by February 1. Beyond the increases to minimum, there is a program for merit increases which should be available by February 1. This program is based on each department’s annual base salary amount and will be administered as it was in 1962 – performance reviews of employees and stay within maximums.

4. Salaried Work Rules

Officially, we do not have an afternoon work break. In fairness to the salaried people, we should give them 10 minutes in the morning and 10 minutes in the afternoon – in view of the fact that we are giving the Union 24 minutes per day. As a result of the brief discussion that followed, Mr. Gallagher will make up a recommendation to present to Mr. MacMillan.

LEGAL

Mr. Feuer had nothing to report.

FINANCIAL

1. Avanti Report

Mr. Lamberti complimented Mr. Rickus on the Avanti report he made up recently and Mr. Rickus commented that he hopes to be able to improve on it.

2. Station Wagon – Sliding and Fixed Roofs

Mr. Rickus was not sure where the fixed group would be offered, and Mr. Hardig told him that everything but the P8 would have both sliding and fixed; the bolted-in roof will be an option. Mr. Detzler mentioned that it should add strength to sales because some people don’t want a sliding roof and, therefore, don’t want to pay for one.

INTERNATIONAL

1. Longshoremen Strike

The strike is still on. CKD boxing is not working this week and does not plan to resume work unless the strike ends. Export people are working with the Billing Department in an attempt to do some advance billing on all CKD’s because we have to get them moving quickly after the strike is over.

2. CKD Turkey

Mr. Verdi, our prospective assembler in Turkey, will be in Washington next week, and Mr. Thomas would like to invite him to South Bend.

APPLIED RESEARCH

1. M44

Price information was turned in to CHOD last Wednesday, and we have heard nothing further on this contract.

2. M113

This has been costed out. We have decided to make the track this time instead of farming it out which has taken considerable out of the price. We have taken out over $1,500 per unit. Manufacturing-cost-wise we are very competitive with FMC, and we are trying to get tooling and equipment amortized. The way the IFB is written, nobody can be competitive, so our price will be higher. The IFB will be opened as a formal bid and posted and published on January 16.

3. Aircraft Loader

The technical proposal is due next Monday. It is in final draft form and is being typed up now.

4. Turtle

The requirement paper is still being processed; it is still down at the Compact Development Command. Mr. Isley’s best guess is that the requirement probably will be out by the end of the month. A personal contact with the people in the Washington area will be made this week. These will be field test units, and there could be as many as 15.

PUBLIC RELATIONS

1. Press Releases

Mr. Whitmyer said we have 7 or 8 stories to be approved to go out this week.

GENERAL

1. Mr. Hardig said that our account executive, Mr. Matthews, and another banker were in Thursday and seemed to be very much impressed with the new models – they particularly liked the ’64. Mr. Hardig answered a number of questions for Mr. Matthews.

2. Mr. Soelch suggested that we put a light in the ashtray; he said Ford has one and they advertise theirs.

3. Mr. Capsey reported that Wayne Searly, quality control man for MFG, went to a dealer to see about getting a new Hark, and the dealer didn’t have one to show him. He has driven Studebakers for years and presently owns a Lark and a Hawk. He has not even seen a ’63 model because the dealer hasn’t had one. Mr. Capsey gave him a ride. He was impressed and he wants to buy a black Hawk. Mr. Detzler took Mr. Searly’s name. Mr. Lamberti told of his friend who went to five dealers before he found one who had a truck.

4. Mr. Gallagher received a letter from the Indiana Manufacturer’s Association saying that along with many other groups, they will assume responsibility for a bill in the General Assembly for seat belts to be installed in the front seats on all models, beginning with the 1964 model. It was suggested that Mr. Gallagher contact Mr. Dredge who is working on this with AMA public relations people.

5. Mr. Soelch asked what we should use for ’64 model volume, and Mr. Lamberti told him we are shooting for 126,000.

6. Mr. Altman, of our South Bend dealership, called Mr. Soelch about the CKD shipment that went aground at Muskegon. Mr. Altman is concerned that a salvage outfit might buy it and sell it to our dealers. (Things, like frames, could be washed off and used.) Mr. Altman wanted to know if he bought it would we buy it back. Mr. Thomas pointed out that the bulk of it was taken off in Quebec, and the insurance company is handling it, not us. Mr. Lamberti suggested that Mr. Grundy in Canada should be alerted.

1-16-63

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