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Autolite: (11) Ford Motor Company Versus United States Government

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Author's Comment: The full account of the Ford Spark Plug Divestiture Court suit can be found and read in the files donated by me to the Fostoria Kaubish Memorial Public Library, along with a complete copy of this text (Book).

 

On November 28, 1961 a jolting press release came out as follows:

"FORD, AUTOLITE EXPRESS SURPRISE AT KENNEDY SUIT DETROIT (UPI)

Officials of the Ford Motor Co. and Electric Autolite Co. today expressed agreement that there was "no violation" of Antitrust laws last spring when Ford paid $28 million for certain assets of the Toledo, Ohio firm.

William T. Gossett, Ford vice president and general counsel, and Robert H. Davies, president of Autolite, expressed similar reactions to the suit filed in federal court her Monday. Atty. Gen. Robert F. Kennedy, who announced the Justice Department's action in Washington, asked federal court here to order Ford to sell the firm. The two companies were charged with violating the anti-merger provisions of the Clayton Antitrust Act. They were named defendants in the civil action.

Gossett said, "The suit comes as a great surprise to me. The acquisition was made only after thorough consideration of the legal questions within the company, and by outside counsel as well.

Attorneys Approved Transaction

He said the company had received a written opinion from attorneys that the transaction would not lessen competition or tend to create a monopoly.

Ford did not make spark plugs or batteries before the acquisition of Autolite, Gossett said, although Ford's chief competitor, General Motors, makes both. He cited GM's AC Spark Plug Division and Delco-Remy, another GM subsidiary which manufactures batteries as well as other automotive products.

"Ford acquired the "Autolite" trade name, its spark plug plant at Fostoria, Ohio . and its battery plant at Owosso, Mich.,and also took over most of Autolite sales organization in the purchase," Gossett said.

Davies said Autolite had not been `officially notified` of the government suit filed in an effort to force Ford to dispose of its holdings. He said "it was his opinion that the transaction `was not in conflict with the antitrust laws`"

Even though the bad news was in evidence, Ford continued to operate the Fostoria Spark Plug Plant feeling the legal battles would be hurdled, and so continued to ressure management that there was no cause for alarm.

On January 18, 1967 the press release was this: (Detroit Free Press)

"COURT HEARS TRUST SUIT AGAINST FORD"

A five year old anti-trust suit against the Ford Motor Co. went to trial Tuesday before federal Judge Ralph M. Freeman.

The federal government is asking Judge Freeman to order Ford to sell Electric Autolite Co., which the automaker bought in April, 1961 for $28 million.

The Department of Justice asserted that competition in the battery and spark plug business `may be substantially lessened` by the purchase. it also said the purchase might tend to create a monopoly.

The first day of the trial was confined to opening arguments. The trial is expected to last about four weeks.

Attorney William H McManus represented the government, and Attorney Jerome O. Shapiro was counsel for the Ford Motor Company.

On June 12,1968 the following come out in The Wall Street Journal:

FORD ACQUISITIONS VIOLATED ANTITRUST LAW, COURT RULES

More info. on this matter can be read in Mr. Richardson's Book found at the
Fostoria Kaubish Memorial Public Library

 

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