Firestone profit

Press, Volume CXII, Issue 32970, 17 July 1972, Page 12

Firestone profit

Sir, —That the company met high cost increases and ended with a tax-paid profit of 21.5 per cent on shareholders’ funds suggests previous years with even better results. That it was achieved on 1956 selling prices shows almost incredible capability, although no doubt the 1956 price was based on the then high prices for rubber and carbon black, or changes in product specifications. Would Mr Campbell say what prevents him applying this capability to obtaining a greater share of the market? I suspect that the averaging system explained by the president of the Price Tribunal would be found to be a series of “deals” between the department and the industry to preserve a certain pattern. The Nelson cotton mill incident has been too soon forgotten and I suggest that what is needed is a judicial inquiry into the organisation and functioning of the Price Tribunal and the lack of any provision for appeal against its decisions.—Yours, etc., TIRED.

July 4, 1972. [The Price Tribunal replies: "The tribunal is satisfied that there have been no ‘deals’ between the Department of Industries and Commerce and the tyre industry as is suggested by your correspondent. The major contributing factor in the ability of the industry to hold prices in the face of increasing costs has been improved productivity through higher sales (or increasing demand) and increased output at lower unit cost.”] [Mr C. W. Campbell, managing director of Firestone Tire and Rubber Company Ltd, replies: “In reply to ‘Tired’ may I comment that we constantly strive to improve the quality and reduce the cost of our product, and thus increase our ability to compete. Our sales goal is naturally to improve our share of the various markets we enjoy by making maximum use of our efficiency within the context of the competitive situation and the laws of the land. I dare say the other tyre manufacturing and distributing companies are doing the same.”]