Automotive Monopolies

Automotive Monopolies

 

in capitalist countries. The overwhelming proportion of the production and sale of automobiles is in the hands of a few monopolies in the USA, West Germany, France, Italy, and Britain. In 1966 almost four-fifths of all the automobiles in the capitalist world were produced by three American and seven West European automotive monopolies, some 60 percent of them by US monopolies. Since the late 1950’s, Japanese companies have moved into the ranks of the leading automotive monopolies.

In each country the output of automobiles is concentrated in the enterprises of a few companies. In 1966 the “Big Three” of the USA—General Motors, Ford Motor, and Chrysler—produced more than 90 percent of all automobiles. In Europe a small number of firms have virtually monopolized the production of automobiles; they include four firms in West Germany (Volkswagenwerk, A. Opel, Ford-Werke, and Daimler-Benz), five companies in Britain (British Motor Holdings, Ford Motor, Vauxhall Motors, Rootes Motors, and Leyland Motors), and four firms in France (Renault, Peugeot Automobiles, Citroën, and Simca). Fiat (Fabbrica Italiana Automobili Torino) controls 90 percent of Italy’s automobile production. In Japan more than two-thirds of all automobiles are produced by four firms—Toyota Motor, Nissan Motor, Toyo Kogyo, and Mitsubishi Heavy Industries. (See Table 1.)

The automotive monopolies are among the industrial giants of the capitalist world. Seven automotive monopolies belong to the biggest capitalist monopolies, and their sales exceed $1.5 billion. General Motors and Ford Motor hold first and second place, respectively, in terms of sales volume among the industrial companies of the capitalist world; in terms of assets, they are surpassed only by the biggest petroleum trust, the Exxon Corporation. Volkswagenwerk has the biggest sales volume among West German companies and holds fourth place in the world. Fiat is the biggest Italian monopoly. The American automotive monopolies are much larger than the West European and Japanese companies. In 1966 the Big Three employed almost twice as many people as the plants of the eight biggest automotive monopolies of West Europe and Japan. In 1966, General Motors produced 3.3 times more automobiles than Volkswagenwerk, the biggest automotive monopoly of Western Europe.

Foreign branches of American monopolies are leading automobile companies in other countries. In Canada, 90 percent of the automobiles are produced by branches of the American Big Three. In Britain, more than 50 percent of automobile production is under the control of branches of the American Big Three: Vauxhall Motors is a branch of General Motors, Ford Motor is a branch of the American monopoly Ford Motor, and Rootes Motors is controlled by Chrysler. More than one-third of the automobiles in West Germany are produced by branches of General Motors (A. Opel) and Ford Motor (and Ford-Werke). The American monopolies have increased their business in Western Europe since the formation of the European Economic Community and the European Free Trade Association. From 1958 to 1965 the proportion of automobile firms in the Common Market countries under the control of American monopolies rose from 16 to 25 percent.

As the competition from American automotive monopolies and the formation of the economic unions have intensified the concentration of production in West European and Japanese automobile industries, the number of

Table 1. Share of biggest monopolies in automobile output in 1966
 ThousandsPercent
United States, total......................10,371100.0
General Motors...................5,17949.9
Ford Motor.......................2,95228.5
Chrysler .........................1,59915.4
American Motors..................2792.7
Federal Republic of Germany, total . . .3,051100.0
Volkswagenwerk ..................1,65254.0
A. Opel ..........................68522.4
Ford-Werke ......................44914.7
Daimler-Benz .....................2498.1
Japan, total ........................2,286100.0
Toyota Motor.....................58725.7
Nissan Motor.....................51722.6
Toyo Kogyo ......................29913.1
Mitsubishi Heavy Industries ........25811.3
Daihatsu Kogyo...................1747.6
Britain, total........................2,043100.0
British Motor Holdings.............73936.2
Ford Motor.......................58028.4
Vauxhall Motors ..................27513.4
Rootes Motors....................21310.4
Leyland Motors ...................1477.2
France, total........................2,025100.0
Renault ..........................76337.7
Citroën ..........................53526.4
Peugeot Automobiles..............37418.4
Simca ............................ . . .32716.1
Italy, total..........................1,366100.0
Fiat .............................. . . .1,22990.0
Canada, total .......................894100.0
General Motors ...................35640.0
Ford.............................26029.1
Chrysler .........................19021.2
Sweden, total.......................196100.0
Volvo............................15277.3

mergers, absorptions, and various agreements establishing different forms of corporations between companies has grown. In Britain, British Motor absorbed the independent firm Jaguar Cars in 1966 and formed British Motors Holding, which merged with Leyland Motors in early 1968 to form the British Leyland Motors Corporation. In 1966 the French companies Renault and Peugeot Automobiles concluded an agreement on coordinating research, foreign economic policy, and so on. Similar agreements linked Volkswagenwerk and Daimler-Benz in West Germany in 1964 and 1966, Toyota Motors and Daihatsu Kogyo and Hino Motors in Japan in 1966 and 1967, and so on. There are agreements on specialization and cooperation between British Leyland Motors Corporation (Britain) and Innocenti (Italy), Renault (France) and Alfa-Romeo (Italy), and between other firms. In 1965 the West German firm NSU Motorenwerke and the French firm Citroën reached an agreement on joint production of automobiles; the engines will be produced in the FRG and the bodies in France. While strengthening their positions in the markets of their countries, the automotive monopolies of Western Europe and Japan also vigorously compete in the USA, exporting their products to that country. The proportion of imported cars to the total sale of passenger cars in the USA rose from less than 1 percent in 1955 to 6 percent in 1965.

The intensification of competition and the growth of concentration and monopoly control in production contribute to the domination of the automobile industry by mighty monopolies, which absorb smaller firms or drive them to bankruptcy. In one decade alone, 1957–66, more than ten companies of Western Europe went out of business or were absorbed by bigger firms. In 1966 there were six automobile companies, compared to two in 1956, among the 20 biggest non-American industrial monopolies. In the same decade Volkswagenwerk moved from 25th place to fourth on the list of the biggest companies outside America, and Nissan motors of Japan moved from 73rd to 42nd place in 1966 alone.

The American monopolies try to gain new markets and strengthen their positions abroad through large-scale capital export. In 1966 they held third place in the country in terms of new capital investments abroad ($967 million) behind the petroleum companies ($2.5 billion) and the chemical industry ($1.063 billion). Ford Motor and Chrysler, respectively, have one-third and one-fourth of the automobile production capacity abroad. General Motors has enterprises in 24 countries outside the USA.

West European automotive monopolies carry out economic expansion abroad mainly through the export of automobiles. Volkswagenwerk, the world’s largest automobile exporter, exports more than 60 percent of its automobile output and the Italian firm Fiat almost 30 percent. Japanese firms are rapidly increasing the export of trucks. Their share in the world’s export rose from next to zero in 1957 to 18 percent in 1965. Toyota Motor tripled its exports from 1962 to 1966, while its output only doubled.

The leading automobile monopolies are powerful concerns that are very active in other branches of engineering as well. They play a leading role in the production of farm machines, electric power and aircraft equipment, and military, missile, and space machinery.

During World War II, General Motors had the largest military government contracts in the country, amounting to $13.8 billion; Ford Motor was third with $5.3 billion. Military output amounted to almost 90 percent of the two companies’ total production. Although the development of new types of weapons reduced the role of the automotive monopolies in war production, companies such as General Motors and Ford Motor produced $500 million worth of military equipment in the mid-1960’s. The West German automotive monopolies produce more than 50 types of military machines and are the major suppliers of tanks for the Bundeswehr. The automotive monopolies are the leading exporters of military equipment; Chrysler holds fifth place in foreign military contracts ($154.2 million in 1966). The American automotive monopolies ship large quantities of vehicles for the armies of countries that are members of aggressive blocs headed by the USA. In 1965 these shipments accounted for 10 percent of American automobile export. Automotive monopolies are contractors and subcontractors for major projects in missile and space technology and research.

State monopoly trends are strong in the automobile industry. The government finances the automotive monopolies’ research in military, rocket, and space machinery. In several countries the government directly participates in the automobile industry and owns automobile companies or is the biggest stockholder in them—for instance, Renault in France, Alfa Romeo in Italy, and Volkswagenwerk in the FRG. In Western Europe the government vigorously promotes the reorganization of national companies, mergers, and cooperation among companies. During World War II government-financed construction greatly increased the production capacity of American and British automotive monopolies; for instance, Chrysler’s capacity almost quadrupled.

Major automotive monopolies (see Table 2). General Motors, controlled by the Du Pont family, is the largest automotive monopoly and sold more than 6.7 million automobiles in 1966; 1.5 million of these cars were produced abroad. General Motors has approximately 130 plants in the USA alone, and its capital investments are between $1.5 billion and $2 billion a year; it is also one of the largest US producers of locomotives, refrigeration equipment, aircraft engines, control systems, and rocket parts. Among others, it designed the hoisting and transport equipment for the Minuteman weapon system. General Motors’ sales volume of $20 billion, net profit of $1.8 billion, and 750,000 employees make it one of the biggest industrial monopolies of the capitalist world.

Table 2. Largest automobile monopolies of the capitalist world in 19661
 Founding dateEmployees (in thousands)Assets (in millions of dollars)Internal capital (in millions of dollars)Sales (in millions of dollars)Gross profits (in millions of dollars)Relation of gross profit in percentNet profit (In millions of dollars)
       to salesto internal capital 
1 Placed according to sales volume in descending order 2 Profit before income tax deduction and its relation to sale and internal capital3 For July 31, 1966
4 Relation of net profit to sales volume and internal capital
United States
General Motors . . . . . . . . . . . . . . . . . .191674512,9168,72620,2093,42416.939.21,793
Ford Motor . . . . . . . . . . . . . . . . . .19023888,0904,78212,2401,1889.724.8621
Chrysler . . . . . . . . . . . . . . . . . . . . .19251833,1491,7015,6503776.722.2189
Western Europe and Japan
Volkswagenwerk (FRG) . . . . . . . . . . . . . . . . . . . . .19301251,4346612,50018627.428.2125
Fiat (Italy) . . . . . . . . . . . . . . . . . . . . .18991351,4014951,6797724.615.540
Daimler-Benz (FRG) . . . . . . . . . . . . . . . . . . . .19261025992491,4753.0417.7444
British Motor3 . . . . . . . . . . . . . . . . . . . .19521208184041,4735723.914.142
Renault (France) . . . . . . . . . . . . . . . . . . . .1895955902141,4281621.17.56
Peugeot Automobiles (France) . . . . . . . . . . . . . . . . . . . . .1896545383029352.247.0421
Toyota Motor (Japan) . . . . . . . . . . . . . . . . . . . .1937348962889305.1416.5448
Nissan Motor (Japan) . . . . . . . . . . . . . . . . . . . .1933551,2953079214.9414.6445
Citroën (France) . . . . . . . . . . . . . . . . . .1924614061428870.442.844
Leyland Motors (Britain) . . . . . . . . . . . . . . . . . .1919565492646163.5410.2427
Volvo (Sweden) . . . . . . . . . . . . . . . . . . . .192624379108589508.546.313

Ford Motor, the world’s second largest automotive monopoly, sold 4.5 million automobiles in 1966; almost 1.2 million of these cars were produced by its plants abroad. It also accounts for 15 percent of the American tractor output. It has a subsidiary that designs and produces guided missiles, electronic and computer devices for the military, and so forth.

Chrysler, which is in the Morgan family’s sphere of influence, is particularly active in Western Europe, where it buys up the leading European automobile companies. Thus, in 1965 it increased its share of the French automobile company Simca to 77 percent of the stock; Fiat owns 23 percent of Simca’s stock. Of the 2.1 million automobiles sold by Chrysler in 1966, almost 600,000 were produced abroad. Chrysler also plays an important role in the production of tanks and guided missiles and is the general contractor in the construction of the first stage of the Saturn 1–B space vehicle.

The West German government and the government of Lower Saxony own 40 percent of the stock of Volkswagenwerk, which accounts for more than 50 percent of the output and more than 60 percent of automobile exports in the FRG. Of the 978,000 automobiles Volkswagenwerk exported in 1966, more than 55 percent were sent to the USA, where this monopoly firmly maintains first place among automobile importers. It can do so because it produces the small Volkswagen 1200, which is more accessible to large masses of consumers.

The British automotive monopoly British Leyland Motors Corporation was formed in early 1968 after several mergers and absorptions in the British automobile industry during the 1960’s. It is one of the biggest automobile producers in the capitalist world, and its output is the largest in Britain and the seventh largest in the world. Its enterprises produce various types of automobiles, over 35 percent of which are exported.

Passenger cars make up almost three-fourths of the sales of the Italian automotive monopoly Fiat. This firm is in the sphere of influence of the Agnelli-Nasi family, important members of Italy’s financial oligarchy. This monopoly also produces tractors, aircraft, railroad rolling stock, ship engines, refrigerators, machine tools, steel, and other goods.

The 1966 agreement of cooperation between the French state company Renault and the private firm Peugeot led to the formation of a mighty French automobile association which will control over 60 percent of the output and 65 percent of the export of French automobiles. Citroën, after its merger with Automobiles M. Berliet in 1967, accounts for one-half of the French output of trucks of 6 tons and over. Citroën is also France’s second largest producer of passenger cars, after Renault.

Toyota Motor, the biggest automotive monopoly of Japan, is growing much faster than its competitors; it produced over 800,000 motor vehicles in 1967.

I. M. REZNIKOVA

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