GM Chief Concerned Over Economy in Last Half of ’89
General Motors Corp. Chairman Roger B. Smith said today that he feels confident the auto industry and economy will remain strong through the first half of 1989, but he expressed deep concern about the remainder of the year.
“I’m more concerned than I was a year ago,” Smith told reporters before a luncheon address to the Economic Club of Detroit, in conjunction with the North American International Auto Show that is to open Saturday.
“A year ago we were predicting a good market, and I felt confident,” he said. “I feel pretty good now about the first and second quarter (of 1989), but I’m very concerned about the third and fourth quarters because the play on that is out of our hands.”
The top GM executive stressed that the biggest problem facing the nation and the auto industry this year is again the budget deficit.
“It’s a more acute problem. It’s a year older and it’s been festering for a year more,” Smith said, adding that the Federal Reserve’s action to slow the economy by raising interest rates “could be a very, very serious problem if it backfires on them.”
Still, Smith said he expects that domestic and imported vehicle sales in 1989 could approach 15 million units.