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General Motors surprised the motor industry, and everyone else, last week by cutting the price of its cars. It was not a deep slash--from $10 on Chevrolets to $40 on Cadillacs--but it was a cut, nevertheless. Light and medium trucks, which are getting harder to sell, were reduced $100 to $150.

With a good sense of public relations, G.M. timed its action to coincide with company-wide wage reductions of 2-c- an hour under its escalator "cost-of-living" contract. (Wage rates are adjusted up or down quarterly, 1-c- for every 1.14 point change in the Bureau of Labor Statistics cost-of-living index.) Said G.M.'s President Charles E. Wilson: the markdown was intended to "pass along to consumers the savings resulting from both the downward adjustment of wage and salary payments and the lowered cost of certain material items."

Unionists muttered crossly that the cuts were "piddling," compared to G.M.'s recent boosts of $42 and $150 on its 1949 models. (Actually, G.M. will have no net savings on labor costs, as it will give a 3-c--an-hour increase in May under its union contract.) Nevertheless, G.M. had shut off any union complaint about the pay cut--and it had outfoxed other motormakers, notably Chrysler Corp.

Raises. G.M. grabbed the headlines with its cut only a day after Chrysler upped the prices on its 1949 models by 6.66%. In his annual report last week Chrysler President K. T. Keller explained: "Higher prices at this time are inevitable. No significant drop in labor costs or prices of materials is as yet even in prospect and much less in evidence."

But Chrysler was aware that competition was back with a vengeance. It planned to kick off its new models with the biggest advertising campaign in its history. Every major U.S. newspaper has been carrying full-page ads, and the splurge in Canada will be "the greatest ever conducted by a U.S. corporation." There, four major magazines will carry twelve-page color inserts. Said a Chrysler executive: "We are proceeding as if the buyer's market is already here."

Stand Pat. There seemed small chance of anyone else following G.M.'s lead on prices. Said Ford Sales Boss Jack Davis: "We are not reducing the prices of our cars, because of the current high level of wage and material costs." Ford's three-passenger business coupe, now selling at $1,158, is still well under Chevrolet's cheapest at $1,260 and Plymouth's at $1,295.

It was a Chrysler vice president who got in the last word. Eyeing G.M.'s 9.5% profit on 1948 sales (as compared to Chrysler's 5.69%), he snapped: "Perhaps . . . they have decided it is to their advantage to get more in line competitively."

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