GENERAL ELECTRIC COMPANY

Press, Volume XC, Issue 27473, 6 October 1954, Page 5

GENERAL ELECTRIC COMPANY

CHAIRMAN REPORTS RECORD SALES The 54th annual general meeting of The General Electric Company, Ltd., was held on September 23, in London. Sir Harry Railing, the chairman, in the course of his speech said:— The Directors’ report shows a gratifying increase in the Company’s profits for the year, which could only be achieved by an increase in production. Sales constituted a new record both i capital and consumer goods at horn and abroad. But for this fact it woui have been impossible for us to absorb the wage advances agreed to in the Engineering Industry. After allowin for depreciations and other provision, we show a profit of £5,778.000 befor taxation. Taxation absorbs 58 per cent and we are allowed to retain 42 per cent, of the profit we have earned. During the last seven years taxes withdrew some £22,000,000 from your Company’s resources, twice the amount of the ordinary stock capital, whilst the net dividends paid to the Stockholders amounted to £5,150,000. At the rate of taxation prevailing in the United States of America, some additional £7,000,000 would have been left to us for modernisation and expansion. The Directors have recommended an increased dividend on the Ordinary Stock of 12 J per cent, for the year as against 11$ per cent, last year. We consider the increase entirely justified. Our Current Assets exceed Current and Deferred Liabilities by £26,000.000 and thus again show the inherent strength of the Company which has been built up consistently over the years. Our Total Reserves amount to £24,474,000 as against £22,571,000 last year. It is gratifying that we can report again ah increase both in production and in the sales of your Company. Our uninterrupted progress since the war therefore, continues.

We have no fear about the home market. We expect a continuation in the volume of orders both for capital and consumer goods. In the export market we face the hard fact that we must meet the competition of countries whose industries bear a lower rate of taxation, and whose labour rates are much below our own—in Germany, for instance, in the engineering industry by some 25 per cent. These differences must ultimately level themselves out, otherwise it will be increasingly difficult to maintain even our present share of the world’s markets and our higher living standards. In the meantime, it is scarcely necessary to reiterate that just as our export prices, and therefore our exports, cannot be kept at a proper level without sufficient home demand, so the prices at home can only remain at the present level if the volume of export business does not decline. This fact, vital in the U.K. economy, needs constant stressing. Compared, for instance, with the U.S.A., who possess an inland market for manufactured goods six times greater than our own and a much smaller percentage of exported manufacture, the U.K. economy is much more affected by variations in export.

LABOUR COSTS It is therefore essential that the difference in labour costs, which already exists between us and our foreign competitors, should not increase still further. In a great many of our products labour costs, including the labour cost of raw material produced at home, amount to as much as 80 per cent, of the cost of tfie product. Every 5 per cent, advance, therefore, may mean a 4 per cent, increase in cost. This shows the utter futility of the wholesale argument that “the engineering industry can afford a general wage advance.” What might be possible in one section, where labour costs play. a small part, would be fatal in other sections of the industry. We must concentrate on further reduction of taxation and free additional spending power and manpower. Research, development and the tools necessary for industrial progress should have first call on these freed resources. Only after their claim is met can we discuss the residuum, and its fair division between the workers and the stockholders who lend us their savings. The General Electric Co., Ltd., of England, known throughout the world as the G.E.C., is represented in New Zealand by British General Electric Co., Ltd., Wellington, Auckland, Christchurch, Dunedin.

The consolidated accounts of The General Electric Co., Ltd., show that the capital employed at 31st March, 1954, amounted to approximately £50,000,000, and that the profit for the year to that date after taxation amounted to approximately £2,364,000. The dividend on the Ordinary capital is 12J per cent, for the year less income tax.

The Company has over 63,000 employee#. The report was adopted. (Extended Report by Arrangement.)