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With investor confidence at its lowest ebb since Dwight Eisenhower's heart attack and Big Board stock prices falling $6 billion in one day's trading, Wall Street last week was a cheerless place for anyone trying to peddle large blocks of stock. So discouraging was the atmosphere that long-scheduled sales of stock in two eminently solid corporations (Kellogg Co. and McGraw-Hill Publishing) were abruptly postponed by the investment bankers underwriting them. But the Street's hard-eyed moneymen took a different view when 430,000 shares of General Motors Corp.* went on the block. Within minutes, they tumbled all over one another plunking down $23 million to grab up every share.
In the annals of U.S. business, 1962 seems destined to go down as a General Motors year. Already the world's biggest manufacturing corporation (more than $8 billion in assets), G.M. last week was growing in every direction. At home in the U.S., G.M.'s bread-and-butter car, the standard-sized Chevrolet, was outselling the rival Ford Galaxie by nearly 2 to 1. In Germany, G.M.'s Opel subsidiary was gearing up for fall introduction of its new Kadett economy sedan which seemed certain to lift still higher G.M.'s 11% share of world auto sales outside the U.S. In space, the giant automaker's AC Spark Plug division won a $16 million contract to build the guidance system for the Apollo moonship. And good as all this was, General Motors' precise, silver-haired Chairman Frederic Garrett Donner, 59, was expecting even better. To a blue-ribbon business audience at New York's Waldorf-Astoria, he calmly predicted that in the next two years "an expanding economy will bring sales to an even higher level."
The Better Half. These confident words could not have come at a better time for the U.S. economy. For weeks past, executives in many areas of U.S. business have been increasingly outspoken in their fears that 1962 may slip by without bringing them the really strong recovery they had expected after last year's recession. By contrast, Detroit looks forward tc a year in which auto sales, including foreign imports, seem likely to hit at least 6,700,000 cars—a figure second only to 1955's record 7,170,000. Since the auto industry and its suppliers account for one out of every 19 jobs in the nation, such a surge in car sales should give a significant lift to the whole economy.
Every U.S. auto company is contributing to—and benefiting from—this surge, but none so much as General Motors. With its standard models reinforced by the pizazz-laden Corvair Monza and the compact Chevy II, G.M.'s Chevrolet division alone has grabbed off more of the U.S. auto market (30%) than the whole Ford Motor Co. (26.2%). Between Chevrolet's runaway success and solid, though less dramatic, increases for Pontiac, Oldsmobile and Buick, General Motors as a whole now accounts for 52.2% of all the cars sold in the U.S. (The only company that ever did better was Ford back in 1921, when the redoubtable model T took better than 60% of the market.) The net result: G.M.'s first-quarter profits this year hit an all time high of $374 million—roughly equivalent to the national income of Ireland.