Makers in the Line of Fire
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rflarge and important HE nationalization of sections of road transport would probably have repercussiOns on many industries, also on people who may not, at present, Consider that they are likely, to be materially affected. There are, in fact, certain problems in connection with the production and sale of motor vehicles and accessories which it would be wise for their manufacturers carefully to examine.
Admittedly, a Government spokesman has said that the vehicle-manufacturing industry will not be, nationalized, whilst in the Transport Bill itself, the production of chassis, except for experimental purposes, is forbidden to the British Transport Commission. However, even if both promises be kept, the State control of transport might well force some manufacturers along the path towards a similar fate.
Assuming that the Transport Bill goes through and that practically all long-distance and some short-distance haulage become a State-controlled business, vehicles for the British Transport Commission would eventually have to be purchased in large numbers, and it is not yet certain whether this will be done by the Commission itself or through one or other of the Ministries. The exact procedure in this respect, however, is not a matter of importance. What is significant is that the preliminary to buying would no doubt be the issuing of invitations to tender—a form of trading that has two great faults.
Disadvantages of the Tender System In the first place, sometimes it may leave the, gate open to malpractices by anl individual or, small groups of officials, and although we are, no doubt, a reasonably honest race, black sheep can be found occasionally. The second j.s that in normal times the competition between producers is fairly strong and brings the danger that, to secure a large and important contract, an uneconomic price may be quoted., Thus we should see introduced that very factor—keen competition—which the Government professes to wish ' to discourage.
Unless precautions be taken, fluctuations in production costs and material prices after a tender has been submitted and accepted, may cause serious financial loss on a large contract. Tenders will also, no doubt, following that well-worn Ministerial procedure, be "to specification." We will pass over the point as to whether such a specification would be in the best operational interest. Producers will, however, be fully aware that to depart, even in comparatively minor details, from the production set-up, meatip incurring extra, and often heavy, costs.
It is also possible that if a specification be basically different from that of production models, the latter would have to be altered to conform with the requirements of the Commission, and all become of "specification type," regardless of which be the better pattern.
It is not _always possible economically or in practice to run separate production lines in order to fulfil two sets of requirements which inlay differ radically, and in the event of "specification models" being given preference, it is not difficult to foresee the makers' dilemma in both the home, and export markets.
Inspection May Impede Production During the war Government inspectors were present at most factories to examine and test at any, and often every, stage of production, and this sort of procedure might again be adopted. When the makers were on "cost-plus," the idiosyncrasies of these people did not matter very much, but it would be different when the makers have to meet their own costs. When working to a price, the attitude of a maker towards the attentions of inspectors would not be so cordial. Those who have some knowledge of happenings during the war can no doubt recall numerous instances when several modifications have been called for and subsequently often cancelled, on the same type of machine and within a short period. Such a procedure would soon render production uneconomic.
A further factor is likely to arise in the event of continued shortages of labour and/or materials. It is not inconceivable that priorities would be given to those makers holding Government contracts. The effects this would have upon other concerns not so happily situated are obvious. In the interests of the ordinary taxpayer, it is 'necessary clearly to point out that when purchasing is carried out by a specially formed organization, the cost of maintaining and administering the latter must be added to the price of the product. Such cost may be heavy, particularly so if an inspection system be put into operation. The true cost of a vehicle would, therefore, bear no relation to its price as shown on the tender.
All such expenses must, in the final analysis. be borne by the taxpayer. It is, of course, likely that, in the first instance, the extra expenditure would be passed on to users of transport. That would include every manufacturer who employs road transport for the carriage of his raw materials and products. In addition, there has been a hint that those who wish to "enjoy" the benefits of road transport, instead of using the railways, will have to pay higher rates for that privilege. Having regard to the various repercussions that nationalization would have on the manufacturers, it is difficult to understand why their representative body is not putting up greater opposition to the Transport Bill If they all joined in the fight, there could be no question of individual concerns being penalized later.