Opinions and Queries
Page 67
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Bodybuilding Industry "Desperate"
MUCH publicity has been given in recent months to the crisis in the motor industry, which happily appears to have been alleviated, no doubt partly upon the improvement in the fuel situation, but probably to a considerably greater extent by the reduction in the Government's hire-purchase squeeze.
Unhappily, the Government have excluded public service passenger vehicles from the operation of this reduction, and on these vehicles the full minimum deposit of 50 per cent., with a maximum repayment period of two years, which was imposed last Year, continues in full force. I would be grateful if you .would draw attention to the desperate state of that part of the P.S.V. bodybuilding industry which caters for private operators.
A coach operator's fleet of vehicles involves the outlay of a large sum of circulating capital which is constantly being turned over and renewed as vehicles wear out or become obsolete. Few operators can themselves finance the whole expenditure involved and customarily many of them make use extensively of hire-purchase finance. There are, in normal times, special terms available to meet their requirements and to conform with the seasonal nature of their business. The imposition of hire-purchase restrictions, however, prevents the average fleet operator from making any further Use of such facilities and produces an overwhelming reduction in the demand for new vehicles.
Briefly, hire-purchase restrictions were first imposed by the Conservative Government in February, 1952. The order (5.1.121) imposed a minimum deposit of 331 per cent. and repayment over 18 months. This was kept in force for over two years. In July, 1954, all restrictions on credit sales and hire purchase were lifted. While they operated they applied to public service vehicles, but after a short experience an important exclusion was made. On June 20, 1952, S.1.1160 excluded from the restrictions taxicabs built to the design of London Cab Order 1934, and no hire-purchase control has been imposed on taxis at ay time since then.
Severest Restrictions In February, 1955, the restrictions started to come back, and progressively cars and other vehicles—but not public service vehicles with over 11 seats—were subjected to minimum deposits of 15 per cent. at first, and 33+ per cent, later, with a maximum period of 24 months for repayments. Finally, in February, 1956, all vehicles, including all public service vehicles, but kill excluding taxicabs, were subjected to the severest restrictions ever imposed, i.e., minimum deposits of 50 per cent. and maximum repayment periods of 24 months.
The position now is that the control of cars and light commercial vehicles was extensively moderated on December 23, 1956, by the reduction of the minimum deposit to 20 per cent., but no change was made in the case of public service vehicles, in respect of which the full 50 per cent. deposit is still required. Continuing as they have done throughout the period of maximum disturbance caused by the fuel shortage, these restrictions have had, and continue to have, a disastrous effect on the coachbuilding industry. We are facing a situation more difficult than any previously experienced in the whole history of our company, which dates back to 1919.
In this situation we have not been idle. We have made urgent representations to the Chancellor of the Exchequer and to the President of the -Board of Trade by letter, and both our Federation and the trade unions have made representations to the Board of Trade. Moreover, recently a deputation of our Board, led by our Member of Parliament, Mr. Charles Ian Orr-Ewing, was granted an interview: with the Parliamentary. Secretary to the Board of Trade, Mr. F. J. Erroll, M.P., when we were able to state the case, and had a sympathetic hearing. But sympathy is not enough. It is . essential that some quick action be taken to give our branch of the motor industry the consideration it needs. For our part, we utterly fail to see any reason why there should be discrimination against coaches in favour of cars, but we go beyond this arid feel that the coach operators have the same case as the taxicab proprietors, and that the restrictions should be withdrawn completely from public service passenger vehicles.
Export Subsidized You may ask why we think that our industry should receive consideration. To start at the beginning, it is highly pertinent that between 10 per -cent. and 20 per. cent. of our company's business Was lost to the Government's own factory, acquired when nationalization of the Tillings Group took place. That is the measure of, the diversion of capacity from private enterprise to the Government, who now exercise control of what is left. The private-enterprise coachbuikling industry needs all the business it can obtain in order to be able to export. It is a very difficult export market because of differences in construction and dimensions for overseas use. Most export is subsidized to some extent by the manufacturer. Our company have had a regular export business over the years, and have exported to every part of the world. Since January.!, 1956, our direct exports have amounted to over £136,000. Without the support of a firm home market there can be no such exports.
Coaches play a large part in the tourist trade, and the following relevant facts have recently been supplied by the British Travel Association. The tourist industry is the seventh largest producer of foreign exchange, and it is the largest dollar earner of all. In 1956, £62.8m. worth of dollars were earned, and the total in all currencies was LI 72m. It is estimated that in 1956 £84-m. was spent by tourists travelling in coaches and buses.
Lastly, my company are faced with a shut down within the next few weeks, and every' indication shows that the absence of a flow of orders is attributable to the hire-purchase restrictions. On the previous occasion, in 1952-1954, the restrictions were less harsh, yet the demand for our products suffered severely. On that occasion it was partly made good and the works were kept going by Government-vehicle orders, which are not reasonably available on this occasion.
We are entitled to ask whether the national interest demands that our comparatively limited industry shall be completely sacrificed to a principle. I think that our workers and our shareholders may find it very difficult to think so in the light of the treatment afforded to the car and taxicab industries.
London, N.W.9. G. R. WHITE,
Managing Director, Duple Motor Bodies, Ltd.