Statement by the President on the New Labor Contracts in the Automobile Industry.

I AM PLEASED that the General Motors strike is settled and the Big Three of the auto industry and the United Auto Workers have now reached agreement.

I am also pleased with the announcements that the 1965 models will sell at the same prices as this year's. Stable automobile prices have helped auto sales reach their present record levels and have helped the country achieve its fine record of price stability.

1. While the auto settlement was a generous one, it must be judged in the context of the auto industry's very high profits arising from higher sales, lower costs and taxes, and very high productivity combined with maintained prices.

2. Both labor and management realize the unique nature of the auto settlement. I expect that other industries with profits below the high level in autos will not use the auto settlement as a pattern.

3. In recent years the United States has had the best record of price and cost stability of any industrial country in the world.

4. Business, labor, and Government have shown more awareness of the importance of price stability--in keeping America competitive and sustaining our record-breaking economic expansion.

5. The price-wage guideposts have contributed to this awareness, by providing a standard for judging whether price and wage decisions are in the public interest. Responsible business and labor leaders want to consider the public interest in making their own decisions.

6. The guideposts continue to represent a sound standard for noninflationary wage and price decisions.

7. We expect that the record for all wage settlements for 1964 will show an average reasonably close to the guidepost levels.

8. We know that a new round of inflation could erode our export surplus and undermine our great expansion. All of us have a vital interest in maintaining price-wage stability.