Car inventories—company owned and
dealer owned———had reached unprece-
- dented levels. The solution to this glut
took five months and could be accom-
plished only by a series of plant shut-
downs in Ianuary 1967.
' Sales of the Rambler American series had
stagnated and inventories were accumu-
lating; a dramatic merchandising move
was concocted and implemented in
February, dropping the price tag on the
American to a position midway between
the VW and competitive smaller U.S.
compacts, by both cutting the price to
dealers and trimming dealer discounts
from 21 percent to 17 percent.
' Administrative and commercial expenses
were much too high and thus a vigorous
cost reduction program was initiated that
trimmed $15 million during the first year.
Manufacturing and purchasing costs were
also trimmed significantly to approach
the most effective levels in the industry.
- The company’s public image had deterio-
rated: the press was pessimistic and much
of the financial community had written it
off. To counteract this, numerous formal
and informal meetings were held with
bankers, investment firms, government
officials, and the press. ..