The Economy: The Rattles in the Engine

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Few people will have more power in shaping the answers than James Michael Roche, the president of General Motors. At 59, Jim Roche (rhymes with coach) is an unlikely tycoon. He is one of the few top American industrialists who never went to college and one of the few Roman Catholics to reach the top at G.M., where most of the hierarchs belong to the same Masonic lodge. He often goes to Mass before beginning his twelve-hour working day. In an industry driven by cool, computerized accountants and tough-talking salesmen, Roche is a folksy sort who never shows his temper and whose greatest failing, according to companions and competitors alike, is that "he may be too much of a gentleman." Roche now ranks second at G.M. to Chairman Frederic G. Donner and is the odds-on-choice to succeed him when Donner turns 65 in the fall of 1967. While Donner supervises top policy from Manhattan, Roche heads day-today operations, can take much of the credit—and blame—for implementing policies. More and more, G.M. is using earthy Jim Roche instead of steely Fred Donner as its public voice. It was Roche who went to Washington to apologize for the embarrassing fact that G.M. underlings—unbeknownst to Roche—had hired detectives to probe the private affairs of Safety Crusader Ralph Nader. When G.M. makes delicate pronouncements about auto safety, quality control or production cutbacks, Jim Roche does the job.

Because G.M. is so pervasive in the U.S. economy, its cutbacks are felt throughout the country. The auto industry uses 22% of the nation's steel, 75% of its plate glass, 62% of its rubber—and G.M. is more than half of the auto industry, accounting for 51% of all sales. Last year, when it marketed a record 4,663,017 cars in the U.S. as well as 1,581,651 cars and trucks abroad, G.M.'s $21 billion volume accounted for more than 2% of the gross national product. Its federal tax payments came to $1.74 billion.

Last week, in the hushed, unhurried atmosphere of the 14th floor executive suite of G.M.'s grey stone fortress in Detroit, Jim Roche cogitated aloud about the state of business. "If anything is happening to the economy now," he said, "it is perhaps a slight dip. It's obvious that a dip here and there is a very normal thing. I don't think it's going to be a serious drop."

The Boom Slayer. Roche may have a touch of the typical automan's optimism, but other seasoned economy watchers agree that business is basically sound. "A recession is certainly not imminent," says Harvard Economist John V. Lintner. "Business is very strong." Echoes James Robertson, vice chairman of the Federal Reserve Board: "Too much is being made of the auto figures and the market performance. When matched with other straws in the wind, neither of these developments means much." Even so, Gardner Ackley, the President's chief economist, says: "Some of the tremendous exuberance has gone out of the economy. Attitudes are much less boomy than they were."