CAR MANUFACTURE

Gisborne Herald, Volume LXVII, Issue 20142, 11 January 1940, Page 12

CAR MANUFACTURE

AUSTRALIAN COMPANY WOULD FORGO RIGHTS A.C.I. REPLIES TO CRITICS An offer by Australian Consolidated Industries, Limited, to relinquish its agreement with the Federal Government for the manufacture of motor vehicle engines and chassis in Australia was announced by the Prime Minister, Mr. R. G. Menzies, last week. Mr. Menzies was referring particularly to fears expressed in South Australia that (he granting of manufacturing rights to Australian Consolidated Industries, Limited, would affect adversely the bodybuilding industry. “There are two answers to this argument.” said Mr. Menzies. “The first is that, in the long run, the establishment of the motor car industry in Australia will stabilise the Australian motor-body industry, as it will render it less dependent upon uninterrupted imports of chassis. The second is that Mr. W. J. Smith, managing-direc-tor of A.C.L, has assured me on behalf of his company that, during the period when his company will enjoy special rights in relation to the manufacture of motor car engines of 15, h.p. and more, his company will obtain its supplies of motor bodies from South Australia, provided, of course, that prices and conditions are not unreasonable.”

Mr. Menzies added that Mr. Smith had authorised him to say that, if any Australian organisation with a financial competence to satisfy the Government and which could produce the necessary capital (£1,500,000) was even now prepared to undertake the manufacture of motor car engines of the indicated class without any exclusive right, A.C.I. would be prepared to relinquish its agreement with the Government. This offer was open until Mr. Smith, who is leaving for the United States almost immediately, arrives there and begins negotiations. “I should make it clear that the Government has for some time been pressing for the establishment of motor car manufacture' without success, and that A.C.I. came along in a co-operative spirit with the first practicable proposition,” said Mr. Menzies. He thought that some form of exclusive rights for a limited number of years was inevitable if this important infant industry were not to be crushed in its early stages. But if some other company, with 66 per cent of Australian capital, were prepared to be gin the task without exclusive rights, the Government would be content.