Friday, August 11, 2006



RV Business
Thursday, August 10, 2006

Freightliner LLC, the heavy truck unit of DaimlerChrysler AG and parent to RV chassis manufacturer Freightliner Customer Chassis Corp., has sued General Motors Corp. over what Freightliner calls "predatory and discriminatory" activities related to the selling of heavier-duty automatic transmissions, according to CBS MarketWatch.

GM's Allison Transmission unit, a division since 1929, controls virtually the entire transmission market for a niche of vehicles that includes diesel-powered buses, recreational vehicles and walk-in vans, according to the Freightliner suit.

The suit alleges that GM is leveraging that "monopoly" status to squeeze out new competitors and boost its share in other corners of the heavy-duty market, like large highway-bound trucks.

GM is utilizing its market power to commit "numerous violations of the antitrust laws, including exclusive dealing," forcing customers to buy an entire line of products and "price discrimination," Freightliner said in the suit, filed July 28 in the U.S. District Court of Oregon, where Freightliner LLC is incorporated.

The suit is a rare move, as it pits customer against supplier in an antitrust case. It comes at an awkward time for GM, which is conducting a financial analysis of the Indianapolis-based transmission division to evaluate the possibility of eventually selling it. It also comes as new competitors – most notably Caterpillar Inc. (CAT) – look to take a bite out of GM's transmission business.

GM spokeswoman Toni Simonetti said "the allegations are out of order" and insisted the auto maker "will vigorously defend against these claims." She said GM considers Freightliner a good customer.

Freightliner believes GM is abusing its position as an industry leader in supplying transmissions and leveraging its scale to offer discounts and favorable warranty agreements "in an attempt to lock in virtually all future sales."

The suit claims Freightliner has "been substantially injured in their business" because of an unwillingness to agree to GM's terms in some cases.

"If (GM) is permitted to continue this conduct, it will drive any actual competition from the field and successfully block any new entrants," the suit said.

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