Case Study: G.M.

At the outset of last year's investigation of General Motors by the Senate Subcommittee on Antitrust and Monopoly, New Dealing Chairman Joseph C. O'Mahoney declared that he was not out to break up G.M., but to examine it as a "case study" of economic concentration. Last week, when O'Mahoney brought out his "case study," it was less a study than a ringing attack on G.M.'s size and profits, a sharp demand for its dismemberment.

Right off, the committee proposed that G.M. split off its customer financing subsidiary, General Motors Acceptance Corp. Said O'Mahoney: "General Motors has used its financial power to obtain advantages over competitors." The committee also hinted that the Government should end G.M.'s 80% domination of the bus market, limit its expansion into such fields as diesels and earthmovers. It also suggested that G.M.'s profits are so high ("31% of its net worth" after taxes last year) that it could cut car prices. The committee overlooked the vast implications of that bit of advice: price cuts by G.M. would force price cuts by all automakers, almost certainly put the hard-pressed independents out of business and leave G.M. with an even bigger share of the market.