General Motors Corp. Chairman Thomas A. Murphy is both optimistic and stubborn. In his traditional year-end statement, Murphy said again that 1978 will shortly prove to be "the most successful calendar year" in U.S. automotive history "and we expect 1979 to be an even better year."
Murphy's statement flies in the face of almost every other economic prognosticator in the nation. He has made similar bullish predictions over the past four years.
Murphy said in a statement delivered late Friday for release Monday morning that "the national economy experienced a strong rebound during the second quarter of 1978 and a more moderate, but sustained, rate of advance in subsequent periods. Helped by this growth in sales of cars and trucks (in the U.S.), we will achieve a record 15.4 million units, nearly 4 percent above the previous high set in 1977," he said.
Car sales will be 11.3 million units, second only to 1973, and trucks an all-time record of 4.1 million. For 1979, the chairman of the world's largest manufacturing enterprise predicts total units to hit 15.5 million. That will include 11.5 million cars and truck sales "will continue at capacity-constrained levels of more than 4.0 million units," he said.
Murphy predicted that foreign car sales in the U.S. will fall short of their 1977 record in 1978, and "there are good reasons to expect" further slides in 1979.
Murphy's 1979 outlook statement was delivered Friday afternoon, several days earlier than it had been expected here. It was the same day the Wall Street Journal featured a front-page story titled, "LosingSpeed -- Auto Sales Drop of Eight Percent New Year Is Forecast...."
Murphy said GM will spend $4.5 billion for capital equipment in 1978, "well above the record $316 billion spent in 1977," and "ongoing programs will require expenditures of more than $5 billion in 1979 and beyond."
He said the corporation's sales forecast and spending plans are "consistent" with GM's expectations that the U.S. economy will continue to grow at a "moderate and sustainable rate." He said the giant auto maker expects the real gross national product to average between 3 and 3 1/2 percent during 1979.
That is "below the 3.8 percent rate we anticipate for 1978, but in line with the nation's long-term growth trend."
He credited his continuing optimism, despite the rising national chorus to the contrary, to a variety of items. Among the things Murphy cited are the continuing growth of industrial production, a large backlog of unfilled durable goods orders, disposable income that is 11 percent over a year ago, and "the tax legislation which becomes effective in January... will help to maintain after-tax income on an upward trend."
Further, "a record 95 million men and women are now employed in the U.S.," he said. Since the recession low in early 1975, employment nationally has increased 11 million, "with 3.8 million new jobs having been created in the past year alone. In the year ahead, further gains in employment are anticipated," he said.
The GM chairman said improving growth rates in other nations and the "increasing competitiveness of American products" overseas are yielding additional growth opportunities overseas. "There is a strong prospect that vehicle exports from the U.S. could reach new records in 1979, and GM is pursuing these opportunities aggressively," he said.