Shrunken Kitty

Automakers Henry J. Kaiser and Joseph W. Frazer had "news which no corporation likes to bring to its stock holders." They were dead right. The news was that Kaiser-Frazer Corp. had lost $19,284,680.83 in 1946. The loss was huge. But K-F said it was not quite as bad as it looked. For one thing, K-F had written off in one year the cash it had spent for engineering, design, and preparation for auto production. How much this was K-F did not say. Ordinarily auto companies spread these costs over a longer period.

And K-F's production of cars had been disappointing. In all, K-F turned out 11,753 cars which it sold for $11,504,443. But production, which was up to 4,089 in November, had dropped back to 3,867 in December (though it was up to 7,846 in April). Suppliers had made K-F, a Johnny-come-lately, wait at the end of the line.

Not much was left of the $54,192,927 with which the company had started off. By year's end, cash was down to $7,226,096.20, though the corporation had spent much of its cash on inventories which totaled more than $13 million. Since then the corporation has received one big credit transfusion: a $12 million advance from the Bank of America. As the K-F report observed: "Getting into the automobile business takes a lot of money."

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