Appendix — United States v. General Motors Corp.
Supreme Court brief1966
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SUPREME COURT OF THE UNITED STATES
Octoser Term, 1965
No. 46
UNITED STATES, APPELLANT,
vs.
GENERAL MOTORS CORPORATION ET AL.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF CALIFORNIA
Volume III
INDEX
Record from the United States District Court for the
Southern District of California, Central Division—
Continued
Plaintiffs Exhibits—Continued Original Print
No. 287—Chart showing 1960 Chevrolet Dealer
Volume in Los Angeles metropolitan area ... 1810 1229
No. 290—Letter to Robert O’Connor from Phil
Johnston, College Chevrolet, Inc., dated March
Geigy Ore ee inl ce Le oes ewes fea 1812 1231
DEFENDANTS’ EXHIBITS:
A—Map of Chevrolet-Los Angeles Metropolitan
Area (expanded) showing Chevrolet dealer and
discount house locations (Stipulation of Facts
Number Three) (See Clerk’s note.)....... 1813 1232
B—Map of Chevrolet-Los Angeles Metropolitan
Area (expanded) showing Chevrolet dealer,
Ford (Ford, Mercury, Comet) dealer, Chrysler
(Plymouth, Dodge) dealer, Rambler dealer,
Studebaker dealer, and Volkswagen dealer loca-
tions (Stipulation of Facts Number Three)
(See Clerk’s note.)............. . 1813 1232
(Stipulation of Facts Number Three) (Blue
PME oo Naa Roo kip een cea Rae 1814 1233
ll
INDEX
Record from the United States District Court for the
Southern District of California, Central Division—
Continued
Defendants’ Exhibits—Continued
Original
D—Listing of discount houses and referral serv-—
ices and identifying numbers for Defendants’
Exhibit A (Stipulation of Facts Number Three)
(UE | Feared ea eee ee ee
J—Tabulation from Defendants’ Exhibit B by
identifying number showing each Chevrolet
dealer, Ford dealer, Chrysler dealer, Rambler
dealer, Studebaker dealer and Volkswagen
dealer located within a five mile radii of each
Chevrolet dealer indexed in Defendants’ Ex-
WR ean ters t Late ts Ce ewes oon cee
AA—Stipulation of Facts Number Two, dated
May 20, 1964, with attachments—Gemeo Auto
Show—Discount house ads (excerpts)........
AP—Dealers Diversified Services, Inc. letter of
instructions to cooperating dealers—undated. .
AQ—Letter to J. H. Connell from L. N. Mays,
dated Noweniber 23, 1960. . 2...) 5 0...
AR—Letter to K. E. Staley from Frank Green,
dated December 2, 1960, with attached copy of
Auto Dealers Business Letter dated December
AS—Letter to Frank Green from J. M. Roche,
Gated Tesemiher 16, 1900: oo. ces
AV—Inter-Organization letter to All Car Divi-
sions from J. M. Roche, dated December 28,
1960, with attached letters “To All (Cadillac,
Buick, Chevrolet, Oldsmobile and Pontiac)
Dealers”, dated December 30, 1960..........
AW—lInter-Organization letter to J. M. Roche
from K. E. Staley, dated December 29, 1960. .
AX—Letter to John S. Gordon from James Fahy
and Virgil Dunn, dated February 15, 1961. ...
AY—Inter-Organization letter to Lawrence Ave-
rill from A. H. Belfie, dated March 23, 1961,
with attached copy of letter to James Faby and
Virgil Dunn, Fleet Sales Company, from A. H.
Belfie, dated March 23, 1961................
AZ—Stipulation of Facts Number Three, dated
May 20, 1964, re Defendants’ Exhibits A
I ii ia oe nT Sacks SRE E RTD
BA—P-W Exhibit—Summary of Profitability in
the Service and Parts Departments in 1960 for
the 76 Los Angeles Metropolitan Area Chev-
SON I Se an eee
1821
1824
1846
1879
1880
1881
1885
1887
1905
1906
1907
1911
1238
1240
1261
1293
1295
1296
1301
1303
1324
1325
1326
1329
1333
INDEX iii
Record from the United States District Court for the
Southern District of California, Central Division—
Continued
Defendants’ Exhibits—Continued Original Print
BB—P-W Exhibit—Estimated Reduction in New
Car Volume to Eliminate all Profit for Volume
Classes of Los Angeles Metropolitan Area
REE SI ect cero 1918 1333
BC—P-W Exhibit—Estimated Reduction in New
Car Selling Price to Eliminate all Profit for
Volume Classes of Los Angeles Metropolitan
Area Chevrolet Dealers..................... 1919 1334
BD—P-W Exhibit—Median Gross Profit per New
Chevrolet Passenger Car Sold in 1960 by Los
Angeles Metropolitan Area Chevrolet Dealers
Who Sold Through Discount Houses or Referral
ON ee Fate nas OLDEN Te ee ets: 1920 1334
BE—P-W Exhibit—Reprint from Collier’s—taken
from Hirscu, Introduction to Modern Statis-
aa eg RO TOE A nee cae ee 1921 1335
BF—P-W Exhibit—Graph: 1960 Combined Gross
Profit for New and Used Car Departments
(Based on 1960 Financial Stetements of the
73 Los Angeles Metropolitan Area Chevrolet
OI 9 ic i kpc th tab She AO ETS 1922 1337
BG—P-W Exhibit—Graph: 1960 Combined Gross
Profit for Service and Parts Departments
(Based on 1960 Financial Statements etc.).... 1923 1338
BH—P-W Exhibit—Graph: 1960 Net Miscel-
laneous Income of the Entire Dealership (Based
on 1960 Financial Statements ete.)....... __. 1924 1339
BI—P-W Exhibit—Graph: 1960 Combined Vari-
able Selling Expenses for the New and Used
Car Departments (Based on 1960 Financial
NN IRE fs Sac ae 1925 1340
BJ—P-W Exhibit—Graph : 1960 Combined Semi-
fixed Expenses of the New and Used Car De-
partments (Based on 1960 Financial Statements
Ws Bie ata cai hid Roa ee eo ee 1926 1341
BK-—P-W Exhibit—Graph: 1960 Combined Semi-
fixed Expenses of the Service and Parts Depart-
menis (Based on 1960 Financial Statements
PE aes hg Sh ee ae ee 1927 1342
BL—P-W Exhibit—Graph: 1960 Fixed Expenses
of the Dealership (Based on 1960 Financial
ey UD Cn re 1928 1343
ume upon a Los Angeles Metropolitan Area
Chevrolet Dealer of the 300 New Car Volume
iv INDEX
Record from the United States District Court for the
Southern District of California, Central Division—
Continued
Defendants’ Exhibits—Continued Original = Print
BN—P-W Exhibit—Effect of a Loss in Sales Vol-
ume upon a Los Angeles Metropolitan Area
Chevrolet Dealer of the 400 New Car Volume
vid Cae ere wat i Fin cain yee eer .. 1930 1346
BO—P-W Exhibit—Effect of a Loss in Sales Vol-
ume upon a Los Angeles Metropolitan Area
Chevrolet Dealer of the 500 New Car Volume
Pe es Coco eek eee Peet thee 1347
BP—P-W Exhibit—Effect of a Loss in Sales Vol-
ume upon a Los Angeles Metropolitan Area
Chevrolet Dealer of the 600 New Car Volume
Pps Earn Pen ee re ; rg ae 1932 1348
BQ—P-W Exhibit—Effect of a Loss in Sales Vol-
ume upon a Los Angeles Metropolitan Area
Chevrolet Dealer of the 700 New Car Volume
ry ere eee RS Rene acer Oe Re ae 1933 1349
BR—P-W Exhibit—Graph: 1960 New Retail
Passenger Car Sales Receipts (Based on 1960
Financial Statements of the 73 Los Angeles
Metropolitan Area Chevrolet Dealers)....... 1934 1351
BS—P-W Exhibit—Graph: 1960 Sales Commis-
sions on the New Cars (Based on 1960 Financial
Statements ete.).......------s ser lye’ eee 1352
BT—P-W Exhibit—Effect of Reductions in Sell-
ing Prices of New Chevrolets upon Los Angeles
Metropolitan Area Chevrolet Dealers of Various
Volume Clasees.......-----secesrc rier: 1936 1353
BU—Chevrolet Dealers in Los Angeles Metropoli-
tan Area Within 5 Miles of Each of the Dis-
count Houses and Referral Services Shown on
Defendants’ Exhibit A.........-----) 1937 1354
BW—Distribution of Franchised Chevrolet Dealers
by New Passenger Car and Truck, Volume
Groups 1960, Chevrolet Los Angeles Metropoli-
het BOOK... csvecncecunncnms este? af 1935 1354
BX—Distribution of Franchised Chevrolet Dealers
by New Passenger Car and Truck Volume
Groups, 1960, Chevrolet Los Angeles Zone ... 1939 1355
BZ—Distribution of 85 Franchised Chevrolet
Dealers in the Chevrolet Los Angeles Metro-
politan Area by Number of Other Franchised
New Car Dealers Located Within a Radius of
5 Miles from Their Places of Business...... 1940 1355
INDEX Vv
Record from the United States District Court for the
Southern District of California, Central Division—
Continued
Defendants’ Exhibits—Continued Original = Print
CA—Chart dated March 7, 1962, prepared by
Dealer Organization & Analysis Dept. showing
National Price Class Performance of Chevrolet
and Other Makes for the Years 1922 through
CE EOE NO ean ge ig 1941 1357
CD—Letter to Owen Keown from K. E. Staley,
dated December 16, 1960 .................. 1942 1359
Reporter’s transcript of proceedings, August 24, 1964 1946a 1364
SN WR Qe ce i eer 1946b 1364
Findings of fact and conclusions of law, September
14, 1964. et , e aaa 1947 1373
WI soo i hae vee 1985 1400
Notice of entry of judgment... sssi‘(‘(siéstst. 1987 1401
Notice of appeal to the Supreme Court of the United
DIR Si siden hot dicw Gthacerc ae 1988 1402
Order noting probable jurisdiction. = ===—==—=—=—~—~—=«4990~—S—«1.403
1229
[fol. 1810] Is rae Unirep States Disraict Court
Puamtirr’s Exursir No. 287
1960 Chevrolet Dealer Volume
Number of
Dealer New Vehicle
es
Seieee a Pee es Pro Pee eee 241
Secu ty 5p ETRE OEE Fn re eer eer Cee 243
cect encneeeeae eben steers eyes 273
ew oben ce SO ESOP ETS Ohad see EE RES 328
Metropolitan. ........0.0. ce ceeee reer cwetenere 388
ec rene add CSV ER HEL OSS PR EOES 418
OS IRE err rene ery 443
aL cevieeneeeet petbakes <uweyeewees 473
| Er re reer en ok 479
he new ce lwknee kW EP EUR STS 69" 495
EEE OLDE TEES CT ee CL The 508
er eC eae ene vaae tm mith 538
Re 66 ke kU eben id ese eee Cu Reeve reetes terse 552
SE errr re errr Le T 566
ee aaa ey Pee VEO LEN RES SRN EOI ENS 573
PR in cad ch eekecnts VeenKeeteée 573
Cone Bros. (Anaheim).......... 5. .seeeeeees 593
Ca gewe and awe CW NN 595
Ce ie aiden benaeh es ek aedexir ees 595
GUT s b cbs cbedwend, vicyedvencvoecncesevesys 623
Pp Oy ee Ee Per ee ee 639
Sea ae ee: La tart errr ete 1 656
Ef hie ee a ad bie SOLA RNAS 656
Cone (Fullerton) Bet AE nal dik » « Wale Wa ee Mae 666
ET CEs oo einy eas wakes vRORE CN ERM 671
ee ee errr. oe 676
Ss ce. CLS Suen eeak Ws obese items 688
| a UI i sri opr reer er mer etre ten 701
Cd ee ta eerlkew eka e yee RUNS Owns 702
Fw eh dale whee gw wn Re ani 704
wadetosdutenbaen ssa ee eveayey 707
TURE 5 a cece eeecensessececcnnyecseouen 754
ND in ind ou uh Ke owe x Lae g NR RRN OUST
SS ee ares mere rrr re 817
te nly Soe bee CR eEN Seu CENeeD 860
NN ECE RET TE ee Te TT 862
wc a uinie poe ie heo aceon aN 886
a od cake wo CRN eoneuee ss 915
IR iv gccuer vines inetereenewen 916
I, gn sade sei eres chenerwe une 920
oe. oe cans ces nes Nuweurnaee nae 948
ae re = gongs bE OeE Cow y. OLS Vee EEN SE 977
Ton oor cc aac sae SRA eNOS 994
CUMNNET ow cn vccnsccseccsccesscusevoescurenes 1,027
Sopp & Son. ...... 6... cece cece e cece eee eeeeees 1,
1230
[fol.1811] 1960 Chevrolet Dealer Volume
Number of
Dealer . New Vehicle
Sales
BAMMea. os tcc c cece weer ecesorevenscsees 1,064
ce lee Gcudace ets We ebaccdssuueecsteryes 1,088
DOE crcccecvivevccsrogercecrnpsoreseee? 1,094
Ss cycercctevene vKoneret sees she nnneees” 1,111
PN ns iL perdauk ivaesewdsene ste 1,119
WOOO os icc cc cer eter cavessreew trees 1,119
Pn, cue paneer ee keadepe tate tatee 1,128
Ce cvncvcccucevsstvecessanccreveres esse nee 1,147
GUM oo in cececrncsserernbuvenvendrerurns 1,167
BE cb. cabs due genre shee er eres SeeoeReees 1,184
NE os ce saudend> vcc¥ettyecenedakensense 1,263
COMMOORY oc cece r een cneeeerecercerncees 1,293
cS gs piddeo pans? corks 1,362
iba gewevencrveeerreinccreertetines4 1,363
Pollard-Ravenscroft.......-0::::sssrertrrereee 1,366
DR, ci cidavaresverseveeearenrsneede reer: 1,406
re enn 1,440
Briggs a as ngn a vER I eke EERE RO RED UNE 1,501
ot ee oa 1,587
Cli BA, gc nessesevedsesddreesteuses neat OMe 1,701
Be Re ee ee kons Keke aCe ORE Ne COTE OERE He 4
poms OPPO TTT TTT ‘
Fletcher Jones........-::::scecrereeeeeneeeeees 1,984
PaskwWO0d....0.0.ccccccccerccecnceeneceneeees 2,063
WOE, oo veces cuevernrecccesenencrersaussess 2,146
CD occcccvecnvecesanersenrensssoeeress 2,194
Sc cecnncnesenperstsrnecseretereren ts 2,212
CIID. cccccenccrvcsnccncevernrersouereereas 2,901
CE ci vc cnvonoveverensnndveersureseerags 4,203
Ds coy peavevuancesenes svdurvacsevanteeess 4,789
1231
(fol. 1812] In tHe Unrrep Starrs Districr Court
Piarntirr’s Exursir No. 290
Received March 22, 1961
Cottece Curvroer, Inc.
191 South Alexander Ave—NAtional 4-454]
Claremont, California
March 21, 1961.
Phil Johnston
President
OK was on order at time of conference,
Mr. Robert O’Conner
Chevrolet Motor Division
3325 Wilshire Boulevard
Los Angeles 5, California
Dear Bob,
You and Mr. Jere Faust had asked me to be on the
lookout for any new Chevrolet delivered through a dis-
count house. A local registration covers a 727 delivered
through Fedeo, Federal Purchasing Corporation, and it
was purchased from Broder Chevrolet. The serial num-
ber is 107270119546, and the owner is Paul D. Muchnice,
Pomona College, Claremont. Trusting that this informa-
tion will be of assistance, I remain your friend.
Yours truly, Phil Johnston.
PJ:EME
Ordered 12/31/60
Delivered 2/8/61
Order #43100 1-5-61
RS#249684
a ee ar a Oe a
1232
[fol. 1813] Clerk’s Note Re Defendants’ Exhibits A& B
A—Map of Chevrolet—Los Angeles Metropolitan Area
(expanded) showing Chevrolet dealer and discount
house locations (Stipulation of Facts Number Three)
B—Map of Chevrolet—Los Angeles Metropolitan Area
(expanded) showing Chevrolet dealer, Ford (Ford,
Mercury, Comet) dealer, Chrysler (Plymouth, Dodge)
caler, Rambler dealer, Studebaker dealer, and Volks-
wagen dealer locations (Stipulation of Facts Number
Three)
Copies of colored photographs of the above maps do not
physically appear in the printed record, but are on file
with the Clerk.
a
(fol. 1814] In rae Unsrrep Srares District Court
Derenpants’ Exuisir ©
Chevrolet Dealers Shown On Exhibits A and B
(Indicated by blue dots)
Identif
Nember® Name and Address of Chevrolet Dealer
1. Angelus Chevrolet Co.
5001 N. Figueroa St.
Los ——
2. Arrow Chevrolet, Inc.
1225 E. 7th St.
Los An
(Central Ch Chevrolet until 4/1/61)
E. Baher, Inc. DBA
H. E. Baher’ Chevrolet
> ae Pacific Coast Hwy.
Hermosa
‘ca Chev. Som 10/2/61)
V. Baldwin
1417 S. a St.
Los es
5. Bill Barnett Chev.
1440 E. Compton BI.
Compton
6. Bartons Chevrolet
‘ 4916 S. Main St.
Long Beach
8. Bellwood Chevrolet
— Atlantic Bl.
9. Warren Biggs Chevrolet
205 8. — Ave.
Los
10. Bliss & Paden, Inc.
1290 Westwood BI.
Los Ange’
11. Boulerend'c Chevrolet Co.
545 8. Atlantic Bl.
Los Angeles
{fol. 1815)
12, Bruder Chevrolet
5950 Hollywood BI.
Hollywood
13. Pollard-Carrell Co., DBA
Tom Carrell Chev.
1234
2 hoy ,
Num Name and Address of Chevrolet Dealer
15. Citizens Chev. Co.
2030 Colorado BI.
16. Frank D. Clay & Son, Inc.
2605 E. Colorado St.
E. Pasadena
17. Cli r Chev.
iat Ww. Bervardino
Covina
18. C Chevrolet
19. Colliau Chev. Co
a
20. Community Chevrolet
80 E. Olive St.
Burbank
21. Cone Bros.
215 N. Los Angeles St.
Anahei
im
22. Cone Chevrolet Co.
320 S. Spadra St.
Fullerton
23. Cormier Chevrolet
601 Long Beach BI.
Lon, Beach
24. Couresy Chevrolet
866 &. Western Ave.
Los Angeles
{fol. 1816]
25. Davies Chev.
214 W. Foothill Bl.
Glendora
26. R. V. Dorweiler Co.
3436 N. Tyler
El Monte
27. Economy Chevrolet
1247 W. Main St.
Alhambra
Enoch Chevrolet Co.
8730 Long Beach BI.
South Gate
Bob Erskine Chev.
363 E. Holt
Pomona
Felix Chevrolet Co.
3330 8. Figueroa St.
Los Angeles
31. Chevrolet
17150 8. Lakewood BI.
Bellflower
32. Fred Gledhill Chev.
304 E. Anaheim
Wilmington
McDonald & O’Boyle Inc., DBA
Hal Greene Chevrolet
201 W. Huntington Dr.
Monrovia
(McDonald & O’Boyle until 5/1/61)
1235
ieentifying
Number Name and Address of Chevrolet Dealer
Ted Grimm Chev.
Fee 1s , tees Bl.
cian‘. c A. Cont until 6/10/60)
pins yt let Co.
Ocean ——
enters on Beach
(Wiliam Ch Chev. Inc. until 7/18/61)
uaranty Chev.
120 W. Ist St.
Santa Ana
36.
(fol. 1817]
37. Allen os Chev.
1400 S. Brand BI.
Glendale
38. Robert Hall Chev., Inc.
6467 Footuill Bl.
Tujunga
39. Hansen Chevrolet
11351 W. Olympic BI.
Los Angeles
40. Harbor , cnovrolet
phd A cf Ave.
41. fone Chev. Co.
42. Hessell Chev.
43. Hoehn Chevrolet Co.
9018 Wilshire BI.
Beverly Hills
44. Leo Hoffman Chev.
15432 E. Nelson Ave.
45. ie Hopper Chev.
ion Grove BI.
Garden Grove
46. Hovey-Dallas Chev.
15600 S. Western
Gardena
ush Chev. wit sayet et)
letcher Jones C
5001 S. Brosdway
Los Angeles
48. Sposa sd Jones Chev. DBA
Glenn Jones Chev.
925 S. Paramount BI.
47.
Paramount
49. Tom Keating Chev., Inc.
6125 Manchester Bi.
Buena Park
[fol. 1818]
50. Deeb coon, Inc. DBA
Kendall Chev. Co.
315 N. Paeite Coast Hwy.
Redondo Beach
[fol.
57.
61.
1819]
62.
67.
Name and Address of Chevrolet Dealer
Kenneth Chev.
422 N. Hawthorne Bl.
Arcadia
Galvin Chev. until 7/1/60)
Keown Chev. Co.
3233 Washington BI.
Venice
Harry Mann Chev. Co.
5735 5 Crenshaw Bl.
Los Angeles
Met itan Chev.
3225 Sunset
Los les
Miller Connell Chev.
a West Coast Hwy.
wport Beach
i iller ler Chev _ until 8/7/61)
illiken Ch ev. Inc.
9032 Washington Bl.
Culver City
Mission Chev. Co.
100 8. San Gabriel
San Gabriel =
A. E. Nugent Chev.
400 S. LaBrea Ave.
Los Angeles
Ostrom Chev.
310 ht os oy Bl.
Montebe
a Th — & Son until 7/1/61)
ount Chev. Co.
11212 S. Paramount
Downey
Parkwood Chev.
5059 Lakewood BI.
Lakewood
Paul’s Chevrolet Inc.
1640 Cabrillo Ave.
Torrance
Martin Pollard Co.
5430 Lankershim BI.
No. Hollywood
Pollard-Ravenscroft Co.
6232 Van Nuys Bl
Van Nuys
Ernie Porter Chev.
245 W. Colorado St.
Pasadena
Potter Motor Co.
100 E. Valley BI.
Ed Priester Chev.
3701 Oceanview BI.
Montrose
Identifying
Num
fol.
1820]
e £ 8 B
1237
Name and Address of Chevrolet Dealer
Rancho A
7056 Reseda B!
Reseda
Clem Ruh Chevrolet Co.
21100 Sherman Way
11900 E. South St. E
Artesia
Charles Schonlaw
7601 Sunset BI.
Hollywood
Seaboard Motors
1831 S. Pacific Ave.
San Pedro
Security Chevrolet
ay S. Brea BI.
a Chevrolet Co.
402 W. Chapman
Orange
Service Chevrolet
i 8. Mead a. ‘ag 10/6/60)
K. Smith
319 W. Holt a
Ontari
o
Maurice J. Sopp & Son
5801 Pacific BL
Huntington Pk.
Bob Sorenson Chev.
201 S. Greenleaf
Whittier
Southwest Chevrolet Co.
7101 8. baa Ave.
Los Ange
Stanley C Chevrolet
11980 E. Firestone BI.
Norwalk
Don Steves Chev.
401 W. Whittier BI.
LaHabra
Vista Chevrolet
5390 Riverside Dr.
Chin
Oo
West Adams Chev.
4471 W. Adams BI.
he ae
on es otors.
Bob Wondries Chevrolet
(Howell Chev. until 12/9/60)
1238
[fol. 1821] In rae Unrrep Srartes District Court
Derenpants’ Exuisit D
Discount Houses and Referral Services Shown On Exhibit A
Identifying Name and Location of
Number Discount House or Referral Service
1. AAAA Auto Lease & Sales, Inc.
(Leonard’s Discount Store)
600 N. Sepulveda
El te)
ws AAAA Auto Lease & Sales, Inc.
(Leonard’s Discount Store)
12891 Harbor
Garden Grove
3. AAAA Auto Lease & Sales, Inc.
2514 W. Olympic Blvd.
Los Angeles
4. AAAA Auto Lease & Sales, Inc.
5200 Laurel Canyon Blvd.
North Hollywood
6. The Brockway Plan
1809 S. B Blvd.
Glendale
* Cal Fleet Auto Sales [f
Union Fleet, Inc.
(Cal Stores, Lakewood)
2500 Carson
Lakewood
8. Car Wholesalers
13306 Ventura Blvd.
Sherman O
9. Castle Sales, Inc.
(More Department Store)
18300 Vanowen
Reseda
[fol. 1822]
10. Castle Sales, Inc.
(More Department Stores)
3443 S. Sepulveda
Los Angeles
11. Robt. Chico (AKA Chico Auto Sales, Inc.)
(Gemco, Anaheim)
9700 Lincoln Ave. (now 2310 Lincoln Ave. due to renumbering)
Anaheim
Gemcv, Anaheim
9700 Lincoln Ave. (now 2310 Lincoln Ave. due to renumbering)
Anaheim
Pia
Identifying
r
Num
[fol.
12.
13.
14.
15.
16.
17.
18.
1239
Name and Location of
Discount House or Referral Service
Robt. Chico (AKA Chico Auto Sales, Inc.)
(J.M. Arnoff Co.)
(Big “A” Stores)
8431 Canoga Ave.
Canoga Park
Robt. Chico (AKA Chico Auto Sales, Inc.)
oe Store)
ee Bellflower
Robt. Chico (AKA Chico Auto Sales, Inc.)
(Onin Store)
9135 Central Ave.
Montclair °
Robt. Chico (AKA Chico Auto Sales, Inc.)
(ABC Store)
Dealer’s Diversified Services, Inc.
hag ee)
5436 N. Woodruff
Lakewood
mwa) copies Services, Inc.
3912 Siauson
Los Angeles
Dealer’s Diversified Services, Inc.
tana Store)
14920 Raymer
Van Nuys
Arthur Diamond
12135 Victory Blvd.
North Hollywood
Fleet Sales Co.
peg pam sama Blvd.
ia — Sales
(Consumer’s Mart of America)
1440 8. Los Angeles St.
Anaheim
Union Car Sales
(Certi-Bond Store)
501 8S. Arlington
8682 Garvey Blvd.
South San Fe
abriel, California
1240
[fol. 1824] In toe Unirep States District Court
Derenpants’ Exuisit J
List of New Car Dealers of Certain Manufacturers Located
Within Five Mile Radii of Each Chevrolet Dealer in the
Los Angeles Metropolitan Area
(A) (B) (C) (D) (E) (F)
Dealer Chev. Ford Chrys. AMC Stude.
Angelus 15 1 1 1 1
19 2 2 12 6
(No: 1) 27 24 20 17
37 25 2
55 26 22
66 44 41
67 48 43
85 49 50
51 60
56
71
89
Total: 8 12 9 2 3
Arrow 4 6 29 15 7
8 32 19 12
(No: 2) 9 33 40 21 16
11 42 41 25
24 49 44 26
30 50 45
47 51 50
55 51
78 52
53
»|#88B8 al Sassarae
Total: 10 5 3
H. E. Baker 42 24 13 9
46 25 14 20
(No: 3) 50 26 17
51
Total: a 3 3. 2
(G)
vw
1
7
10
14
15
—
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1825]
J. V. Baldwin 2 32 29 15 7 i)
9 33 30 20 13 10
(No: 4) 24 43 41 21 15 13
30 45 42 22 16 14
47 46 44 23
54 47 45 25
55 49 46 26
59 50 47
78 51 48
80 52 50
84 53 51
54 52
55 53
56 54
57
58
59
Total: ll 17 14 7 4
Bill Barnett 28 7 4 3 10 4
31 8 8 6 23
(No: 5) 48 14 9 37
61 15 10
62 23 ll
70 19
88 33
38
71
Total: 5 7 9 3 2 1
o| S88eRe |
(B) (C) (D) (BE) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1826)
Bellwood 2 6 il 9 7 6
ll 19 15 15 12 10
(No: 8) 28 20 16 19 23
60 32 2 28
61 33 30 37
78 42 40
52 71
58
61
65
8S
Total: 6 il 7 5 3 2
Warren Biggs 2 24 22 21 6 7
4 30 27 23 l4 9
(No: 9) 12 31 28 25 15 13
a4 43 41 26 16 14
30 45 42
37 46 44
47 49 45
55 50 46
59 51 47
72 54 48
S4 AS) 50
85 56 51
57 §2
58 53
59 ‘a
Total: 12 15 15 4 4 4
Bliss & Paden 39 9 13 4 2 2
41 10 14 8 22 5
(No: 10) 43 17 69 24 21
53 18 70 36
57 60 41
85
86
95
a7
9
12438
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. Vw
[fol. 1827]
Boulevard 2 2 1 1 1 1
Ss 6 7 15 7 10
(No: 11) 27 32 29 19 12
60 33 30
67 42 40
78 51
52
65
Total: 6 s 5 4 3 2
Bruder 9 i) 20 5 2 3
24 10 2 12 < - 7
(No: 12) 37 ll 22 23 6 9
43 12 27 24 14 13
55 24 28 25 15 16
59 25 42 16
rp 26 46
S4 30 47
85 3 48
43 50
49 51
54 52
58 58
7
Total: 9 l4 13 5 6 5
Tom Carrell 78 66 34 25 20
79
‘No: 18 + sy > 4
MY -- 2 1 1 1 i
Century 42 22 24 11
(No: 34) 4 34 32 17 i
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1828}
Citizens 1 24 20 12 6 7
19 25 21 17
(No: 15) 37 26 22
66 44 43
68 48 50
85 51 60
66
71
89
Total: 6 9 6 1 2 1
Frank D. Clay 19 1 1 2 1 1
27 2 2 31 19 17
(No: 16) 52 3 55 35
58 63 60
66 71 67
67 72 72
76 73
80
81
82
87
89
Total: 7 12 3 2 2
Clippinger 25 5 12 7 23 (
16 23
(No: 17) 27 78
77 79
96
Total: 1 5 4 1 _ 1
College 29 74 61 32 32 18
34 115 62 52
(No: 18) 77 116 63
117 96
97
98
Total: 3 4 6 2 1 1
(A)
Dealer
[fol. 1829]
Colliau
(No: 19)
Total:
Community
(No: 20)
Total:
Cone Bros.
(No: 21)
Total:
Cone Chevrolet
(No: 22)
Total:
(c) ()
Ford Chrys
1
2
43
60
67
7”
eeee ol seseee sl zaegeeee ce. a!
a |
(E)
AMC
SBa oo!
|
—
SDOrw w
1245
(G)
NO int
—
ce
so
1246
Dealer
[fol. 1830)
Cormier
(No: 23)
Total:
Courtesy
(No: 24)
(B)
Chev.
SSx
SISEERESSoan wo!
(C)
Ford Chrys. AMC
(D)
| @BSeese
(E)
18
43
BEER» ws!
ja uaa
RSw oa
os |
(F)
Stude.
10
il
a
1247
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1831]
Economy 1 1 1 1 1 1
11 2 2 19 12 17
(No: 27) 16 30 40 31 17
19 42 43 35 19
58 48 60
66 51 67
67 71 72
76 72
73
81
82
89
Total: 8 12 7 4 4
Enoch 5 6 8 6 7 4
8 14 9 15 23 10
(No: 28) 47 15 10 22
61 32 ll 37
78 33 29
52
53 49
55 71
61
88
Total: 6 10 8 4 2 2
Bob Erskine 18 74 61 32 32 18
77 77 62 52
(No: 29) 83 114 63
115 97
116 98
Total: 3 5 5 2 1 1
Felix 2 32 29 15 7 10
4 33 30 20 13 13
(No: 30) 9 45 41 21 15 14
24 46 42 22 16
47 47 44 23 —
54 50 45 25
55 51 47 26
59 52 48
78 53 49
80 54 50
84 55 51
56 52
57 53
58 54
59
Total: 11 15 14
3 3
4 6
8 9
9 30
10
11
15
33
37
38
10
34 18
35 38
36
37
39
68
82
83
Total: 3 8 3
McDonald & O’Boyle 26 18 2
, 52 27
(No. 33)
Total:
—s
il
(G)
(A)
Dealer
(fol. 1833]
Gwynn
(No: 37)
Total:
Robt. Hall
(No: 38)
Total:
Hansen
(No: 39)
Total:
Harbor
(No: 40)
Total:
(B)
Chev.
RaSaScr
Bs .|
(Cc) WD) (E)
Ford Chrys. AMC
ll 5 5
12 6 12
24 7
25 20
26 21
30 22
31 27
44 28
48 4l
49 43
51 46
54 50
52
13 2
11 5 39
66 6
92 7
73
74
3 5 1
9 13 4
10 14 8
17 69 24
18 70 36
60 41
85
86
95
97
9 5
7 18
8
15
37
38
#
o| S8egeee.. |
—
(F)
Stude.
10
il
wo |
1249
wo |
os |
12
=
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1834]
Hastings 10 60 69 36 22 21
39 85 70 41
(No: 41) 53 86
95
97
Total: 3 5 2 2 1 1
Hessell 3 22 24 13 8 11
14 28 25 14 9 15
(No: 42) 51 29 26 16
53 34 31 17
35 32
62
Total: 4 6 5 4 2 2
Hoehn 10 9 13 4 2 2
12 10 14 8 14 5
(No: 43) 24 17 27 23 15 9
39 18 28 24 16 13
57 30 42 41 16
59 31 47
72 43 48
84 45 51
46 52
' 58 53
60
97
Total: 8 12 10 5 4 5
Hoffman 5 78 23
36 79
(No: 44) 96
Total: — 3 2 —_ —_ 1
Eddie Hopper 21 102 84 44 29
106 88 47
(No: 45) 111 89 51
95
Total:
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. Vw
(fol. 1835]
Harvey Dallas 3 23 19 ll 9 15
51 28 24 13
(No: 46) 63 29 25 14
34 26 16
62 32 17
91 49 38
Total: 3 6 6 6 1 1
Fletcher Jones 2 32 29 15 7 10
4 33 30 20 8 13
(No: 47) 9 35 31 21 13 14
24 45 42 22 23
28 46 44 25
30 47 45 26
54 50 49
78 52 51
80 53 53
84 55 54
56 ,
57
58
59
88
Total: 10 15 10 6 3
Glen Jones 5 4 3 3 10 4
31 rj 4 6 23 6
(No: 48) 40 8 8 9
61 14 9 37
62 15 10
81 19 11
20 15
61 16
69 33
70 38
71
Total: 6 10 ll 4 2
Tom Keating 22 4 85 30 24
71 69 86 46 25
(No: 49) 81 103 87
104
105
Total:
Kenneth
(No: 51)
Total:
(C) (D) (E) (F) (G)
Chev. Ford Chrys. AMC Stude. vw
3 25 13 9 15
63 26 14 20
17
2
3
14
42
46
54
80
| eeeeseeten. ol SSkESBBS o| LASBBY
1253
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
{fol. 1837]
Harry Mann 4 17 13 8 8 5
14 18 14 16 13 ll
(No: 54) 24 34 24 20 15 13
30 35 31 22 14
47 45 32 23
51 46 42 24
57 47 44 25
80 53 45 26
84 55 49
57 51
58 53
59 54
Total: 9 12 12 8 3 4
Metropolitan 1 24 20 12 6 7
2 25 21 21 14 9
(No: 55) 4 26 22 23 15 14
9 30 27 16
12 31 28
15 43 41
24 49 42
30 50 44
37 51 45
59 54 46
72 56 47
85 57 48
58 50
51
52 ‘
53
Total: 12 13 16 4 4 3
Miller Connell 109 91 . 45 26
110
(No: 56)
Total —_ 2 1 1 — 1
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. Vw
{fol. 1838]
Milliken 10 9 13 4 2 2
34 10 14 8 8 5
(No: 57) 39 17 31 20 13 11
43 18 42 23 14 13
53 35 47 24 15
54 43 48 4l
59 45 51
46 54
47
58
59
60
95
97
Total: 7 14 8 6 5 4
Mission 16 1 1 1 1
19 2 2 2 5 17
(No: 58) 26 3 17 10 19
27 21 18 31
52 71 60 35
56 72 67
7 73 72
6 80
81
82
87
89
Total: 8 12 z 5 3 2
A. E. Nugent 4 9 13 4 2 2
9 10 14 8 13 5
(No: 59) 12 17 27 20 14 9
24 18 28 21 15 13
30 30 42 23 16 14
43 31 44 24
55 43 45 25
57 45 46 26
72 47
84
1255
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1839]
Ostrom 8 2 15 12
11 6 16 9 26
(No: 60) 61 19 40 19 /
67 20 80 28
79 42 42
65
98
99
Total: 5 8 4 5 2 —
Paramount 5 6 3 3 23 6
8 7 4 6
(No: 61) 28 8 9 9
31 14 10 28
48 19 ll 30
60 20 15 37
81 61 16
65 71
69
7
88
Total: 7 11 6 l 1
Parkwood 5 4 3 10 4
Xi 7 18
(No: 62) 31 8
40
48
71
(A) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. Vw
[fol. 1840)
Martin Pollard 20 ll 5 5 3 3
65 12 6 29 4 16
(No: 64) 72 67 7 40 18 22
68 58 24
90 59 25
93 75
94 76
77
Total: 3 7 8 3 “3
Pollard Ravens 64 68 58 29 18 16
90 59 40 24 19
(No: 65) 93 65 25 22
94 75
76
77
Total: 1 6 2 8
Ernie Porter 1 1 1 1 1
15 2 31 17 17
(No: 66) 16 43 35 19
19 60
27 67
%
levees a |
=
on
wo
wo
Total: 8
| 1257
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
(fol. 1841]
Ed. Priester 15 ll 5 5 3
38 12 6 12
(No: 68) 85 25 7 39
26 20
44 21
66 73
92
Total: 3 7 6 3 1 —
Rancho 70 13 64 33 21 19
76 65
(No: 69) 94 77
Total: 1 3 3 1 1 1
Clem Rub 69 13 64 33 21 19
76 65
(No: 70)
Total 1 2 2 1 1
S&J 31 4 3 3
49 7 4 30
(No: 71) 62 & 33
81 69
103
Total: 4 5 3 2 a —
Schonlaw 9 9 27 4 2 2
12 10 28 23 14 3
(No: 72) 24 17 42 24 15 9
43 30 46 25 16 13
55 31 47 16
59 43 48
64 45 51
84 49 52
54 53
58 58
67
90
Total: 8 12 10 4 4 5
(A) (B) (C) (D) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Studee VW
fol. 1842}
Seaboard 32 83 68 43 8
84 82
(No: 73) 100 83
Total: 1 3 3- 1 — 1
Security 22 104 85 46
82 105 86 49
(No: 74) 108 87
2 3 2 —_ —
21 84 27
36 92 50
93 51
94
95
Total: 2 5 3 1 1
Service 16 1 1 1 1
19 2 31 17 17
(No: 76) 43 19
60
67
72
1259
(A) (B) (C) (D) (E) (PF) (G)
Dealer Chev. Ford Chrys. AMC Stude. VW
[fol. 1843]
Sopp 2 6 29 15 7 10
4 32 30 19 12 14
(No: 78) 8 33 40 21 23
1l 42 44 22
28 50 45 26
30 52 71 37
47 53
80 55
56
57
59
61
88
Total: 8 13 6 6 3 2
Sorenson 60 20 16 28 26 24
65 80 42 27
(No: 79) 98 81 49
99
Total: 1 4 3 3 2 1
Southwest 4 32 24 15 7 10
14 33 29 16 8 ll
(No: 80) 28 34 30 13 13
30 35 31 21 23 14
47 45 32
51 46 42
54 47 44
78 50 45
84 52 49
53 51
55 54
57
58
59
88
Total: 9 15 11 6 4 4
Stanley 31 4 3 3 27 6
48 7 4 9
(No: 81) 49 8 15 30
61 19 16
71 20 33
69 80
70 81
98
99
Total: 5 9 7 3 1 1
(A) (B) (Cc) @) (E) (F) (G)
Dealer Chev. Ford Chrys. AMC Stude. Vw
[fol. 1844)
Steves 74 104 81 49 27 24
105 85
(No: 82) 108 86
Total: 1 3 3 1 1 1
Vista 29 74 61 32 32 18
77 114 62 52
(No: 83) 115 63
116 96
97
98
Total: 2 4 6 2 1 1
West Adams 4 9 13 4 2 2
9 10 14 8 8 5
(No: 84) 12 17 27 20 13 9
24 18 28 21 14 13
30 30 31 23 15 14
43 31 42 . 16
47 35 44 ~ 2
54 43 45
57 45 47
59 46 48
72 47 51
80 50 52
54 53
55 54
56
57
58
59
Total: 12 18 14 7 6 5
Wondries 1 ll 5 5 3 7
9 12 6 12 4
(No: 85) 12 24 rj 6
15 25 20 i7
20 26 21
37 30 22
55 31 27
44 28
48 41
49 43
51 46
54 50
Total: 8 12 12 2 4 1
(fol. 1845] [File endorsement omitted]
—
(fel. 1846] In THe Untrep States Distaicr Court
1261
Derrenpants’ Exuisrr AA
In THe Unrrep States Disrricr Court FoR THE SouTHERN
Disrricr or Catirornia, CENTRAL Division
Civil No. 62-1208-C'C
Unirep States or AMERICA, Plaintiff,
v.
GENERAL Morors Corporation; Losor CHEVROLET DraLers
AssociaTIon; DEALERS’ SERVICE, Inc.; anp Foor
CHEVROLET DEALERS AssocIATIon, Defendants.
Strputation or Facts N UMBER T'wo—May 20, 1964
(fol. 1847] Plaintiff and each of the defendants, through
their respective counsel, hereby stipulate that witnesses,
if called, would testify to the following facts:
(1) A 1961 Model 927 Chevrolet Monza Coupe (white)
(Shown in Attachment 1);
(2) A 1961 Model 927 Chevrolet Monza Coupe ( black)
(Shown in Attachments 3 and 5);
(3) A 1961 Model 1839 Chevrolet Impala Sports
Sedan (Shown in Attachments 1, 3 and 4);
(4) A 1961 Model 1837 Chevrolet Impala Sports
Coupe (Shown in Attachments 1, 3, 4 and 5).
1262
[fol. 1848] 2. As shown in Attachment 1, attached to the
rear bumper of the 1961 Model 1837 Chevrolet Impala
Sports Coupe is a Citizens Chevrolet license plate frame
and cardboard filler similar to the one pictured in Attach-
ment 2 of this stipulation.
3. Attachment 2 annexed hereto is a true and correct
photographic copy of the license plate frame and card-
board filler regularly attached to new 1961 Chevrolets by
the Citizens Chevrolet Company, Eagle Rock, California.
4. As shown in Attachments 3 and 5, pasted on the
inside of the left rear window of the 1961 Model 1837
two-door Impala Sports Coupe is a manufacturer’s sug-
gested retail price “sticker” required by federal statute
(Public Law 85-506, 85th Congress) to be attached by each
manufacturer to each new car it sells to a dealer. A
sample of the form of such sticker used by the Chevrolet
Motor Division for this purpose is attached to this stipula-
tion as Attachment 6.
5. As shown in Attachment 4, a Citizens Chevrolet
license plate frame similar to the one pictured in Attach-
ment 2 (without the cardboard filler) is attached to the
center of the rear bumper of the 1961 Model 1837 Chevro-
let Impala Sports Coupe.
[fol. 1849] 6. The advertising materials attached hereto
as Attachments 8 through 59 and described in the attached
list, marked Attachment 7, are true and accurate samples
of the advertising material of the described kinds used
by the concessionaires, discount houses and referral
services named therein during the period between January
1, 1960 and October 12, 1961.
A. Each of such advertising materials designated
as a “newspaper ad” in column 2 of such list is a
true and correct copy of a page from the newspaper
named in column 3 of such list, circulated on the date
or dates shown in column 4 thereof, containing a paid
advertisement which the concessionaire, discount
house or referral service named in column 5 of such
list caused to be so published in the said newspaper.
B. Each of such advertising materials designated
as “general ad” in column 2 of such list is a true and
correct copy of a piece of advertising or a page from
1263
Motor Division to Chevrolet dealers, Subsequent to
such distribution this brochure was hand stamped by
or at the direction of Leonard's Store as follows:
“$$$ Save $$¢
New Cars
Leonard’s
International
600 No. Sepulveda-E] Segundo”
and was distributed to the public at such Leonard’s Store.
7. The advertising materials attached hereto as Attach-
ments 60 through 63, and described below, are true and
accurate samples of the advertising material of the de-
scribed kinds used by the concessionaires, discount houses
and referral services named during the period between
January 1, 1960 and October 12, 1961,
A. Attachment 60 hereto is a true and correct copy
of a business card used by sales representatives at
and distributed to the public under the direction of
J. M. Arnoff Co. (Big “A” Store), 8341 Canoga Ave-
nue, Canoga Park, California.
[fol. 1851] B. Attachment 61 hereto is a true and
correct copy of a “fold-over” business card used by
sales representatives at and distributed to the public
under the direction of Fleet Sales Company, 3870 Cren-
shaw Boulevard, Los Angeles, California.
C. Attachments 62 and 63 hereto are true and cor-
rect copies of a portion of the “referral slip” used
by certain Chevrolet dealers and Fleet Sales Com-
pany, as described by Charles Miller and Bernard . J
Dottl in Defendants’ Designations and Affidavits.
[fol. 1852] Dated May 20, 1964.
Maxwell M. Blecher, Robert C. Weinbaum.
Maxwell M. Blecher, Attorney, Department
Justice. O’Melveny & Myers, Lawler, Felix
Hall, Aloysius F. Power, Robert A. Nitsch
Nicholas J. Rosiello. By Homer I. Mitch
Hansen & Dolle, Glenn S. Roberts. By Victor
Hansen, Attorneys for Defendants.
It is so ordered this 1st day of June, 1964.
Charles H. Carr, United States District Judge.
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1293
{fol. 1879] In tae Untrep States District Court
DerEeNDANTs’ Exuisir AP
Deacers DiversiFiep Services, Inc.
Advertising Consultants
3912 West Slauson Avenue
Los Angeles 43, California
AXminster 9-0796
Instructions
Please have the letter below copied on your Dealership’s
letterhead (an original and three copies), and have it
signed by the Owner or an Officer of your company, and
submit it to this office immediately. If you handle more
than one make of car, please include amount of gross
profit on each make of car. If the gross profit is on a
sliding scale, with more profit on some models than on
others, please so state.
(Date)
Dealers Diversified Services, Inc.
Advertising Consultants
3912 West Slauson Avenue
Los Angeles 43, California
To Whom It May Concern:
We hereby agree to sell our 1961 (make of car) at
$——- over actual invoice. We guarantee that a customer
referred by you will in no case be charged more than
the above price. If a raise in gross profit becomes neces-
sary, we shall so advise your office in writing.
All accessories and options will be sold at invoice, and
extra services at time of delivery at our cost. Our price
includes all pre-delivery service and regular new car war-
ranty, the salesman’s commission, and a $50.00 fee payable
to your office. All trades will be taken into our inventory
at cash value.
The $50.00 fee will be paid to Dealers Diversified Serv-
ices, Inc. for each new or used car sold and delivered at
(name of Dealership) by referral from Dealers Diversified
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Services, Inc., and will be paid upon receipt of your
billing.
We understand that our prices will be treated by you
in the strictest confidence, and will not be advertised or
circulated. (Name of salesman) will be the salesman
designated to handle your account. We agree that he will
send two (2) exact copies of each purchase order to your
office at time of delivery of new car, noting amount of
over-allowance on trade, if such form of discount is used.
1294
>
1295
(fol. 1880] In tHe Unrrep States Districr Court
Derenpants’ Exarsrr AQ
CHEVROLET—CENTRAL OFFICE
Division of General Motors Corporation
General Motors Building
Detroit 2, Michigan
Chevrolet
(trade mark)
November 23, 1960.
Mr. J. H. Connell
Miller Chevrolet Company
1000 West Coast Highway
Newport Beach, California
Dear John:
May I acknowledge your personal letter of November
11th to Mr. Staley, which he immediately turned over to
me as we were in the process and still are of thoroughly
investigating the increased activity of discount houses on
the Pacific Coast, and particularly in the general Los
Angeles area.
You can rest assured that we, too, are disturbed by this
situation, as are the management of General Motors Cor-
poration, and as soon as the current investigation is com-
pleted all the facts will be reviewed very carefully to
determine what position we will be able to take on this
important subject.
I was glad to learn some time ago that you are now the
operator at Newport Beach and, certainly, I want to wish
you every success.
Yours very truly, L. N. Mays, Assistant General
Sales Manager.
LNM/ec
a
1296
{fol. 1881] In tHe Unrrep States District Court
Derenpants’ Exursitr AR
Mr. K. F. Staley, Chevrolet December 2, 1960.
Detroit, Mich.
Dear Mr. Staley:
For publication, what is your policy on the matter out-
lined in the attached copy of the letter?
Sincerely, Frank Green.
[fol. 1882] Auto DeaLer Business LETTER
The “Green Sheet,” now in its third year, published
every week for all motor car dealers in Los Angeles
and Orange Counties, the world’s greatest automotive
market. Subscription $5 a month quarterly ; $50 a year
annually. Frank Green, publisher.
P.O. Box 664, Balboa, California. Phone ORiole 3-8068.
December 2, 1960.
The dealer has blood in his eye about the discount
house, finally after watching everybody fumble around
about it, and there is a groundswell running that will
do it in.
The fight is over whether or not in the future all new
cars will be sold by department stores, and whether or not
the dealer will maintain his investment in service facili-
ties, where somebody else snags the sales from him.
The stuff hit the fan finally, because too many discount
houses came in. The dealers see it as a national trend.
And before everybody goes down the tubes, they are
going to find out who stands where.
A campaign is being put on by the Motor Car Dealers
Association of Orange County, of which Dick Heffern is
the Secretary, and the membership of the group includes
enough livewires that it will get a good going over, and of
course it is the live wire that’s got it in the end.
They were stung into action, you might say, to sting
the factories into action. They turned to this as the last
resort, because one day a salesman lost a deal to a dis-
count house, and he asked his dealer what was being done
about the discount house.
1297
The review of the matter was not too complimentary,
and the salesman threw up his hands and quit his job and
went into another line of business altogether. Here is
what he found out had been done:
A law was passed that would give the Department of
Motor Vehicles a weapon with which the discount houses
could be killed. The law was hastily drawn, pushed
through against advice of counsel, worded in a way that
made it bend in the middle.
The DMV then took this law out on the hunt, looking
for a discount house to do in. The discount house‘ was
brought into court and made a shambles of the whole thing.
The law has been called unconstitutional, among other things,
and the discount houses have been found to be legal.
The Orange County guys were faced with seven dis-
count houses, nestled in among seventy-seven dealers. One
Chevrolet dealer in Los Angeles seni one of the discount
houses thirty Chevrolets in one month. ;
The discount houses did things like put on an auto
show, attracted thousands to see “all lines” had hundreds
of inquiries, and dozens of sales. A salesman looking at
this would naturally get his Irish up.
The dealers had their factory men out, some of them
went to the show, others shopped the discount houses, it
was a matter of getting the factory man to understand
and believe what was going on, and what it was doing to
seventy-seven cash customers of theirs.
(fol. 1883] The next thing that happened, the dealers
had all their salesmen sit down and write to the president
of their company, and ask him what he was doing about
the dealers who sold to the discount houses.
Some factories got it back by long distance telephone
right now, some have looked out the window, N. L. Me-
Laughlin, the manager of the Long Beach Dealers Associ-
ation had the assistant public relations director of Ford
Motor Company fly out here from Detroit to talk about
the Ford quality dealer program, and to add the informa-
tion that they had already cut off the supply from one
dealer who had been furnishing the main volume of cars
to the discount houses. They could do this forthwith be-
cause Ford had a financial interest in the firm.
Other factory men drove out to talk to the salesmen, to
explain the factory interest in the problem, promise some
1298
remedy would be forthcoming as soon as it is possible to
pr’ tuee it.
Ac least one factory man bitched at the dealers for
going over his head to the big boss. He found they are
hepped up on the idea that the factory can stop it if the
factory wants to.
One of the Rambler men told his factory man that he
would buy that extra five thousand dollars in spare parts,
and the display rack, and the batch of accessories that was
being urged on him, if the factory would push a similar
batch on the discount house down the street.
A Studebaker man told his factory man that he con-
siders himself a used car dealer, and that selling new cars
is a sideline, in which he engages when there is a profit in
it, and if there is no profit in it, then the new cars will
just sit there until there IS a profit in it.
The idea captures the imagination of every dealer who
hears of it. One old-timer recommended that they go a
step farther, and follow up to the president of the manu-
facturing firm, a month later, and tell him that thirty days
have now gone by since the first letter, and what has he
done abont cutting off the supply?
What a lot of dealers hope will happen, is that the
factory man will go to the guy who is supplying the cars
to the discount houses, and Sell him on the idea that
what he is doing is not so good. They quote instances
where the factory men had the urge to be persuasive with
a dealer over some other matter, and it turned out that
the factory men can be Very persuasive when they put
their mind to it.
One part of the Orange County struggle involved hiring
the lawyer who has the reputation for being the best legal
brains in automotive matters in Southern California. He
has compiled a file two inches thick on the matter, and he
then gives the off-the-cuff opinion that fourteen states
have tried to outlaw discount houses, and they all fourteen
ended up talking to themselves.
Another part of it brought out that the discount houses
are becoming more and more national in scope, with
lawyers who draw down fifty thousand a year just to take
care of problems that are brought up by the surrounding
merchants, and land in court.
And one final note, that might give an insight into which
1299
way the wind is blowing on the factory attitude toward
dealers who supply the discount houses: The letters that
came back from the Ford factory to the salesmen,
acknowledging the complaint, were signed by the president
himself, and promised that everything would be done to
correct it, as soon as it was possible.
One dealer in Long Beach told the customer to take his
ear back to the discount house for service. The customer
did that, then came back, paid for the service he needed,
and turned around and sued the dealer for the amount.
There was the distinct feeling here that the legal beagle
at the discount house contentedly feels that the dealer’s
service department is available to discount house custom-
ers, and if you don’t believe it, just try something.
[fol. 1884] In the San Fernando Valley, where seldom is
heard a discouraging word, a big discount house went in
in Canoga Park, and Dick Stewart wrote a letter on his
Pioneer Oldsmobile stationery to the Director of the
Department of Motor Vehicles, in Sacramento, which said:
“The J. M. Arnoff Company, 8341 Canoga Avenue,
Canoga Park, California, ran an ad in the Los Angeles
Times November 24, 1960, offering in their ‘new car de-
partment, all makes, all models, complete factory war-
ranty and service. Big discounts and trade-ins accepted
at top market value.’
“This clearly is an offering to sell new cars by a com-
pany which does not have a franchise for all makes or the
parts and service facilities to function as a new car dealer.
“The legitimate auto dealers represent a tremendous
investment in this state. They employ thousands of people,
carry a large tax burden and sincerely contribute to solv-
ing the transportation problem of our millions of people
through licensed sais and maintaining proper service de-
partments to keep the cars rolling. They render a genuine
service to the community.
“We pay our licenses, our bonds, our taxes, our permits
to operate, therefore we must ask for protection from
-hose who clearly do not conform to the requirements of
being a dealer.
“Therefore we feel that our state, county and city must
be made a safe place in which legitimate business can
prosper and the vital transportation needs of the publie
be served properly.
1300
“We do hereby respectfully request that your office:
1. Take immediate and continuing action to stop this
and all other operations of this type.
2, Conduct an investigation of all leasing companies
operating in Los Angeles and when it is found that they
are engaged in the business of selling new or used cars
as well as leasing, that action be taken to stop them from
operating as a new or used car dealer.
3. Counsel with newspapers and secure their cooperation
in refusing to run ads offering new and used cars for sale
except from a properly licensed dealer or an individual.
“We feel that this requested action is urgent and neces-
sary for the protection of all automobile dealers and in
the interests of the motoring public.”
The same day, Dick distributed to a number of other
dealers a letter which read: “Dear Dealer: The enclosed
letter, with copies of the ad, was sent to the following
offices: State of California, Department of Motor Vehicles,
3500 South Hope Street, Los Angeles, Calif.; Walter L.
Peterson, City Clerk, City Hall, Los Angeles, Calif.;
Mayor Norris Poulson, City Hall, Los Angeles, Calif. ;
Governor Pat Brown, State of California, Sacramento,
Calif.; Police Commissioner, City of Los Angeles, 150 N,
Los Angeles St., Los Angeles, Calif.; District Attorney,
Los Angeles County, 211 Temple Street, Los Angeles,
Calif.; Board of Supervisors, Los Angeles County, 211
Temple Street, Los Angeles, Calif.; Director, Department
of Motor Vehicles, State of California, Sacramento, Calif.
“If you feel that the cause is right, to try and protect
your business, won't you write a letter expressing your
views and mail to some or all of the above offices or other
offices that may help. Will you contact several other
dealers in your community and urge them to write letters
also.
“A group effort could produce results.”
Dick Stewart has been in the automobile business in the
San Fernando Valley for twenty-five years or so. His
Pioneer Olds place is in North Hollywood, 4610 Lanker-
shim Boulevard, Stanley 7-8115.
FG
1301
[fol. 1885] Ly rae Unrrep States Disrricr Court
Derenpvants’ Exumrr AS
December 15, 1960.
Mr. Frank Green, Publisher
Auto Dealer Business Letter
P. O. Box 664
Balboa, California
Dear Mr. Green:
Recently, you wrote the executives of the Divisions of
General Motors at their Central Offices in Michigan as
Well as to some of the Zone Managers in Los Angeles.
Your letter to these individuals attached a copy of the
“Auto Dealer Business Letter” issued on December 2 and
requested “For publication, what is your policy on the
matter outlined in the attached copy of the Letter?”
Kor your information, the activities of membership dis-
count outlets in Orange County, California, were brought
to the attention of the managements of the General Mo-
tors Corporation as well as to its Divisions, by General
Motors dealers and their retail organizations located in
the area, In addition, we have been kept informed of
these activities by the local field organizations of General
Motors.
This is a matter of deep concern to us in General
Motors as well as to our Divisions. We are in the process
of reviewing this matter with the individual General
Motors dealers in the Los Angeles and Orange County
areas.
The position and attitude of General Motors toward
such activities has been conveyed to the individual dealers
who have expressed their concern to us, and in addition
[fol. 1886] the loeal wholesale organizations of each of
our Divisions will diseuss this situation in detail with the
individual dealers,
Over a long period of years, the position of General
Motors has been unchanging as to practices which have
crept into the business from time to time, that represent
1302
a threat to the fundamental structure of our system of
distribution. We will continue our efforts to protect the
good will of our products by every available legal means.
Will you please regard this letter as reply to each of the
letters that you have addressed to executives of our Car
Divisions, whether located at their Central Offices or in
Los Angeles.
Very truly yours, J. M. Roche, Vice President.
bk
1303
[fol. 1887] Ly tae Untrep States District Court
Derenpants’ Exurerr AV
GENERAL Motors Corporation
Detroit 2, Michigan
December 28, 1960.
General Sales Managers U.S. Car Divisions
You are familiar with the increasing activity on the part
of membership discount houses operating new ear sales
departments. This condition has prompted certain South-
ern California dealers and their retail salesmen to send
letters and telegrams to Mr. Gordon and to Divisional
executives expressing their deep concern over this latest
development which is having a direct effect on the normal
retail sales of new cars. We have sent you copies of cor-
respondence we received in this connection along with
copies of replies that were made to your dealers.
This matter was reviewed at the meeting of the Dis-
tribution Group on December 21, 1960, and it was felt
that a letter containing similar information should be
sent to all dealers over the signature of the General Sales
Managers of the Car Divisions. We are attaching a copy
of a suggested letter which the Divisions may use in con-
nection with this matter. The suggested letter has been
developed for the Chevrolet Division, but of course can
be readily adapted for use by the other Divisions.
We would like to suggest that this letter be dated and
sent out to each of your dealers on December 30, 1960, so
that letters from all Divisions will arrive at approximate-
ly the same time on January 3, 1961. Will you kindly
send us five copies of the letter which you send to your
dealers.
J. M. Roche.
gz
Attach.
Pad
1304
[fol. 1888] Capmiac Moror Car Dtvision
General Motors Corporation
Detroit 32, Michigan.
Office of the General Sales Manager
December 30, 1960.
To Cadillae Distributors and Dealers
We are taking this means of aecquainting Cadillac dis-
tributors and dealers with the problems incident to mem-
bership discount outlets offering new Cadillac cars for
sale to members and their friends and the position of
Cadillae with respect to this growing activity. We have
received letters and telegrams from some dealers and
employes of dealerships expressing deep concern as to
the effects of this type of competition on their business.
The substance of these communications, while varying
in content, implies that Cadillae Motor Car Division as a
manufacturer is either not aware of these practices or,
that knowing about the situation refuses to recognize
such practices as “unfair competition” to enfranchised
dealers, as well as an unsound method for potential
customers to invest in new Cadillae products. Some have
even suggested that Cadillac condones these practices as a
means of obtaining additional sales.
All these implications are entirely unwarranted, and
reflect a lack of understanding by some of the Cadillac
Quality Dealer Program and the continuity of our efforts
to implement the Program.
Cadillac Motor Car Division does not and has not sold
its new passenger cars for resale to any outlets other than
authorized Cadillac dealers. Frankly, I believe every
Cadillae dealer knows this, but it appears that some of
their employes may not be quite as well informed.
The reported recent expansion of the activities of so-
called membership discount houses into the field of motor
vehicle retail sales has been brought to our attention by
members of the Cadillac field organization.
Inquiries have been made, and we are advised that these
discount outlets either. (1) purchase their Cadillac motor
vehicles from Cadillac dealers for resale to members and
their friends, or (2) by prearrangement with some Cadil-
1305
lac dealers, they are in a position to make a deal with a
customer for a price and then refer the customer to
the Cadillac dealer for delivery of the vehicle at the
price established by the discount house. In the latter
event, the delivering Cadillac dealer reportedly pays a
[fol. 1889] substantial portion of the gross profit realized
on the deal to the discount establishment for division
among the operator of the discount house, the operator
of the automobile concession, and the automobile salesman.
Where the motor vehicles are purchased from a Cadillac
dealer and resold as new-used cars, the transaction is
nothing more than what has generally become to be recog-
nized in the trade as a “bootleg” sale. On numerous
occasions during the past several years, the management
of General Motors Corporation has gone on record with
the General Motors distributor and dealer organization
expressing its deep concern with respect to this practice,
which is recognized as being most detrimental to the good
will which has been established over the years for, and identi-
fied with, the dealer, the manufacturer and the product.
When a customer purchases a new-used Cadillac car
from one of the so-called discount houses, he reportedly
does not receive a Cadillac Dealer New Car Warranty as
would the original purchaser of the vehicle. Further-
more, the discount house normally provides no service
facilities for the after-purchase needs of the customer.
In attempting to trade upon the capital facilities of
authorized dealers, the discount house seller reportedly
tells the customer to take his car to any authorized
Cadillac dealer for his service requirements. If the pur-
chaser is not satisfied with the service he receives from
the authorized dealer, he then blames Cadillac because,
as an owner of a Cadillac product, he expects the same
high degree of service which owners of Cadillac vehicles
have learned to enjoy over the years from the Cadillac
dealer organization.
While the management of General Motors Corporation
has repeatedly pointed out the pitfalls of the “quick-
profit” bootleg sale to its dealer organization, it has at
the same time recognized the right of every dealer to
lawfully resell his merchandise to anyone.
On May 3, 1957, the President of General Motors Cor-
belie
1306
poration sent all General Motors dealers a copy of his
letter-reply to a protest against bootlegging from the
Automobile Dealers Association of Indiana. The follow-
ing quotation is from that letter:
“For several years it has been quite clear to those
who have kept informed as to the interpretation of
the antitrust laws that the Department of Justice has
taken a firm position, both in statements and opinions,
that any restriction upon the right of a dealer having
{fol. 1890] title to motor vehicles to sell such motor
vehicles to anyone, anywhere at any price, was a
violation of the antitrust laws. Judicial opinions
handed down over these years tended to confirm this
interpretation.
“This ‘right of the dealer to sell the motor vehicles
to which he has title’ asthe pleases, is the key to these
problems. It is the exercise of this right which first
moves the motor vehicles into the bootleg channel.
Even if there were extenuating circumstances which
motivated the movement of cars into the bootleg
channel, unquestionably there are many such sales
by authorized dealers made solely for the purpose of
obtaining a quick profit.”
The procedure whereby some discount outlets, which
offer new cars for sale, make a deal with a customer, and
then, as prearranged with an authorized dealer, turn the
transaction over to that dealer for closing and delivery
of the vehicle, is being improperly characterized by some
selling dealers as a “referral.” Such arrangements, how-
ever, are far different from the casual practice in the
industry whereby salesmen encourage referrals from
friends and others who chance upon a prospective new car
customer. The reports we have received indicate that
these discount outlets are advertising new cars for sale at
established business locations, frequently far removed
from the location of the selling dealer. In effect, they
in some instances represent the establishment of a second
and unauthorized sales outlet or location contrary to the
provisions of the Cadillac Selling Agreements.
More importantly, arrangements of this type tend to
downgrade the enfranchised dealer as a new car merchant
1307
in the eyes of the public. It is difficult to understand how
any dealer who has invested thousands of dollars in capi-
tal equipment to merchandise new cars can be a party to
an arrangement which permits a discount outlet to dis-
credit his merchandising ability by offering new cars for
sale at purported “savings” to the customer, and then not
only assume the obligation for the sale but also share his
gross profit on the transaction with the discount house.
Cadillac Motor Car Division recognizes the problems
raised by the discount house new car merchandising activ-
ities. They are critical problems for the public, the
franchised dealers, and the manufacturers. New car sales
(fol. 1891] by these outlets do not represent one iota of
additional business for the dealer organization or the
factories. They represent no savings to the public but
only result in a dilution of the gross profit on each trans-
action which would otherwise be made by the franchised
dealers who have the service facilities and trained mechan-
ics to insure the customer’s enjoyment of his investment
in a new car. Most importantly, they threaten the good
will of the dealer organization, the manufacturer, and
the product.
The Cadillac field organization will give special atten-
tion to these problems. They propose to personally dis-
cuss this matter with dealers in those areas where such
activity is reported to exist and ask them to review their
operations in the light of the critical nature of the
problem as it affects the good will of the product they
sell, the entire franchise system of distribution, and the
validity of any arrangement they may have with a dis-
count house under the provisions of their Cadillac Selling
Agreement.
Let me assure you that we will continue our efforts to
protect the good will of our products by every available
legal means.
You may wish to review this letter with your salesmen,
so that they too will more fully understand the position
of Cadillac with respect to the matters outlined herein.
Very truly yours, F. H. Murray, General Sales
Manager.
FHMurray :mm
1308
[fol. 1892] Buick Moror Division,
General Motors Corporation,
Flint 2, Michigan’
December 30, 1960.
To all Buick Dealers
We are taking this means of acquainting all Buick deal-
ers with the problems incident to membership discount
outlets offering new Buick cars for sale to members and
their friends and the position of Buick with respect to this
growing activity. We have received letters and telegrams
from some dealers and employes of dealerships expressing
deep concern as to the effects of this type of competition
on their business.
The substance of these communications, while varying
in content, implies that Buick Motor Division as a manu-
facturer is either not aware of these practices or, that
knowing about the situation refuses to recognize such
practices as “unfair . »mpetition” to enfranchised dealers,
as well as an unsound method for potential customers to
invest in new Buick products. Some have even suggested
that Buick condones these practices as a means of obtain-
ing additional sales.
All these implications are entirely unwarranted, and
reflect a lack of understanding by some individuals of the
Buick Quality Dealer Program and the continuity of our
efforts to implement the Program.
Buick Motor Division does not and has not sold its new
passenger cars for resale to any outlets other than author-
-ized Buick dealers. Frankly, I believe every Buick dealer
knows this, but it appears that some of their employes
may not be quite as well iiformed.
The reported recent expansion of the activities of so-
called membership discount houses into the field of motor
vehicles retail sales has been brought to our attention by
members of our wholesale organization.
Inquiries have been made, and we are advised that these
discount outlets either (1) purchase their Buick motor
vehicles from Buick dealers for resale to members and
their friends, or (2) by prearrangement with some Buick
dealers, they are in a position to make a deal with a cus-
Mi
1309
tomer for a price and then refer the customer to the
Buick dealer for delivery of the vehicle at the price estab-
lished by the discount house. In the latter event, the
delivering Buick dealer reportedly pays a substantial
portion of the gross profit realized on the deal to the
discount establishment for division among the operator of
the discount house, the operator of the automobile con-
cession, and the automobile salesman.
[fol. 1893] Where the motor vehicles are purchased from
a Buick dealer and resold as new-used cars, the transac-
tion is nothing more than what has generally become to
be recognized in the trade as a “bootleg” sale. On
numerous oceasions during the past several years, the
management of General Motors Corporation has gone on
record with the General Motors dealer organization ex-
pressing its deep concern with respect to this practice,
which is recognized as being most detrimental to the good
will which has been established over the years for, and
identified with, the dealer, the manufacturer andthe
product.
When a customer purchases a new-used Buick ear from
one of the so-called discount houses, he reportedly does
not receive a Buick Dealer New Car Warranty as would
the original purchaser of the vehicle. Furthermore, the
discount house normally provides no service facilities for
the after-purchase needs of the customer. In attempting
to trade upon the capital facilities of authorized dealers,
the discount house seller reportedly tells the eustomer to
take his car to any authorized Buick dealer for his service
requirements. If the purchaser is not satisfied with the
service he received from the authorized dealer, he then
blames Buick because, as an owner of a Buick product, he
expects the same high degree of service which owners of
Buick vehicles have learned to enjoy over the years from
the Buick dealer organization,
While the management of General Motors Corporation
has repeatedly pointed out the pitfalls of the “qnick-
profit” bootleg sale to its dealer organization, it has at the
same time recognized the right of every dealer to lawfully
resell his merchandise to anyone,
On May 3, 1957, the President of General Motors Cor-
poration sent all General Motors dealers a copy of his
1310
letter-reply to a protest against bootlegging from the
Automobile Dealers Association of Indiana. The follow-
ing quotation is from that letter:
“For several years it has been quite clear to those
who have kept informed as to the interpretation of
the antitrust laws that the Department of Justice has
taken a firm position, both in statements and opinions,
that any restriction upon the right of a dealer having
title to motor vehicles to sell such motor vehicles to
anyone, anywhere at any price, was a violation ef the
antitrust laws. Judicial opinions handed down over
these years tended to confirm this interpretation.
“This ‘right of the dealer to sell the motor vehicles
to which he has title’ as he pleases, is the key to
these problems. It is the exercise of this right which
first moves the motor vehicles into the bootleg chan-
nel. Even if there were extenuating circumstances
which motivated the movement of cars into the boot-
leg channel, unquestionably there are many such sales
by authorized dealers made solely for the purpose of
obtaining a quick profit.”
[fol. 1894] The procedure whereby some discount out-
lets, which offer new cars for sale, make a deal with a
customer, and then, as prearranged with an authorized
dealer, turn the transaction over to that dealer for closing
and delivery of the vehicle, is being improperly character-
ized by some selling dealers as a “referral”. Such arrange-
ments, however, are far different from the casual practice
in the industry whereby salesmen encourage referrals
from friends and others who chance upon a prospective
new car customer. The reports we have received indicate
that these discount outlets are advertising new cars for
sale at established business locations, frequently far re-
moved from the location of the selling dealer. In effect,
they in some instances represent the establishment of a
second and unauthorized sales outlet or location contrary
to the provisions of the Buick Dealer Selling Agreements.
More importantly, arrangements of this type tend to
downgrade the enfranchised dealer as a new car merchant
in the eves of the public. It is difficult to understand how
any dealer who has invested thousands of dollars in capi-
1311
tal equipment to merchandise new cars can be a party to
an arrangement which permits a discount outlet to dis-
credit his merchandising ability by offering new cars for
sale at purported “savings” to the customer, and then not
only assume the obligation for the sale but also share his
gross profit on the transaction with the discoun: house.
Buick Motor Division recognizes the problems raised by
the discount house new car merchandising activities. They
are critical problems for the public, the franchised dealers,
and the manufacturers. New ear sales by these outlets do
not represent one iota of additional business for the deal-
er organization or the factories. They represent no sav-
ings to the public but only result in a dilution of the
gross profit on each transaction which would otherwise be
made by the franchised dealers who have the service
facilities and trained mechanies to insure the customer’s
enjoyment of his investment in a new car. Most impor-
tantly, they threaten the good will of the dealer orga-
nization, the manufacturer, and the product.
The Buick wholesale organization will give special at-
tention to these problems. They propose to personally
discuss this matter with each of their dealers in those
areas where such activity is reported to exist and ask
them to review their operations in the light of the critical
nature of the problem as it affects the good will of the
product they sell, the entire franchise system of dis-
tribution, and the validity of any arrangement they may
have with a discount house under the provisions of their
Buick Dealer Selling Agreement.
Let me assure you that we will continue our efforts to
protect the good will of our products by every available
legal means.
You may wish to review this letter with your salesmen,
so that they will more fully understand the position of
Buick with respect to the matters outlined herein.
Very truly yours, E. C. Kennard, General Sales
Manager.
ECK :bb
1312
(fol. 1895] CurvroLetT—CrntrRAL OFFICE
Division of General Motors Corporation
General Motors Building
Detroit 2, Michigan
December 29, 1960.
To all Chevrolet Dealers
We are taking this means of acquainting all Chevrolet
dealers with the problems incident to membership discount
outlets offering new Chevrolet cars for sale to members
and their friends and the position of Chevrolet with re-
spect to this growing activity. We have received letters
and telegrams from some dealers and employes of dealer-
ships expressing deep concern as to the effects of this type
of competition on their business.
The substance of these communications, while varying
in content, implies that Chevrolet Motor Division as a
manufacturer is either not aware of these practices or,
that knowing about the situation refuses to recognize such
practices as “unfair competition” to enfranchised dealers,
as well as an unsound method for potential customers to
invest in new Chevrolet products. Some have even sug-
gested that Chevrolet condones these practices as a means
of obtaining additional sales.
All these implications are entirely unwarranted, and
reflect a lack of understanding by some of the Chevrolet
Quality Dealer Program and the continuity of our efforts
to implement the Program.
Chevrolet Motor Division does not and has not sold its
new passenger cars and trucks for resale to any outlets
other than authorized Chevrolet dealers. Frankly, I be-
lieve every Chevrolet dealer knows this, but it appears
that some of their employes may not be quite as well
informed.
The reported recent expansion of the activities of so-
called membership discount houses into the field of motor
vehicle retail sales has been brought to our attention by
members of our wholesale organization.
Inquiries have been made, and we are advised that these
discount outlets either (1) purchase their Chevrolet motor
vehicles from Chevrolet dealers for resale to members
1313
and their friends, or (2) by prearrangement with some
Chevrolet dealers, they are in a position to make a deal
with a customer for a price and then refer the customer to
the Chevrolet dealer for delivery of the vehicle at the
price established by the discount house. In the latter
event, the delivering Chevrolet dealer reportedly pays a
(fol. 1896] substantial portion of the gross profit realized
on the deal to the discount establishment for division
among the operator of the discount house, the operator
of the automobile concession, and the automobile salesman.
Where the motor vehicles are purchased from a
Chevrolet dealer and resold as new-used cars, the transac-
tion is nothing more than what has generally become to
be recognized in the trade as a “bootleg” sale. On numer-
ous occasions during the past several years, the manage-
ment of General Motors Corporation has gone on record
with the General Motors dealer organization expressing
its deep concern with respect to this practice, which is
recognized as being most detrimental to the good will
which has been established over the years for, and identi-
fied with, the dealer, the manufacturer and the produet.
When a customer purchases a new-used Chevrolet car
from one of the so-called discount houses, he reportedly
does not receive a Chevrolet Dealer New Car Warranty
as would the original purchaser of the vehicle. Further-
more, the discount house normally provides no service
facilities for the after-purchase needs of the customer. In
attempting to trade upon the capital facilities of author-
ized dealers, the discount house seller reportedly tells the
customer .o take his car to any authorized Chevrolet deal-
er for his service requirements. If the purchaser is not
satisfied with the service he receives from the authorized
dealer, he then blames Chevrolet because, as an owner of
a Chevrolet product, he expects the same high degree of
service which owners of Chevrolet vehicles have learned
to enjoy over the years from the Chevrolet dealer
organization.
While the management of General Motors Corporation
has repeatedly pointed out the pitfalls of the “quick-
profit” bootleg sale to its dealer organization, it has at the
same time recognized the right of every dealer to lawfully
resell his merchandise to anyone.
1314
On May 3, 1957, the President of General Motors Cor-
poration sent all General Motors dealers a copy of his
letter-reply to a protest against bootlegging from the
Automobile Dealers Association of Indiana. The follow-
ing quotation is from that letter:
“For several years it has been quite clear to those
[fol. 1897] who have kept informed as to the inter-
pretation of the antitrust laws that the Department of
Justice has taken a firm position, both in statements
and opinions, that any restriction upon the right of a
dealer having title to motor vehicles to sell such mo-
tor vehicles to anyone, anywhere at any price, was
a violation of the antitrust laws. Jvdicial opinions
handed down over these years tended to confirm this
interpretation.
“This ‘right of the dealer to sell the motor vehicles
to which he has title’ as he pleases, is the key to these
problems. It is the exercise of this right which first
moves the motor vehicles into the bootleg channel.
Even if there were extenuating circumstances which
motivated the movement of cars into the bootleg
channel, unquestionably there are many such sales by
authorized dealers made solely for the purpose of
obtaining a quick profit.”
The procedure whereby some discount outlets, which
offer new cars for sale, make a deal with a customer, and
then, as prearranged with an authorized dealer, turn the
transaction over to that dealer for closing and delivery of
the vehicle, is being improperly characterized by some
selling dealers as a “referral.” Such arrangements, how-
ever, are far different from the casual practice in the
industry whereby salesmen encourage referrals from
friends and others who chance upon a prospective new car
customer. The reports we have received indicate that
these discount outlets are advertising new cars for sale
at established business locations, frequently far removed
from the location of the selling dealer. In effect, they
in some instances represent the establishment of a second
and unauthorized sales outlet or location contrary to the
provisions of the Chevrolet Dealer Selling Agreements.
More importantly, arrangements of this type tend to
1315
downgrade the enfranchised dealer as a new car merchant
in the eyes of the public. It is diffieult to understand how
any dealer who has invested thousands of dollars in capi-
tal equipment to merchandise new cars can be a party to
an arrangement which permits a discount outlet to dis-
credit his merchandising ability by offering new cars for
sale at purported “savings” to the customer, and then not
only assume the obligation for the sale but also share his
gross profit on the transaction with the discount house.
[fol. 1898] Chevrolet Motor Division recognizes the
problems raised by the discount house new car merchan-
dising activities. They are critical problems for the
public, the franchised dealers, and the manufacturers.
New car sales by these outlets do not represent one iota
of additional business for the dealer organization or the
factories. They represent no savings to the publie but
only result in a dilution of the gross profit on each trans-
action which would otherwise be made by the franchised
dealers who have the service facilities and trained
mechanics to insure the eustomer’s enjoyment of his in-
vestment in a new ear. Most importantly, they threaten
the good will of the dealer organization, the manufactur-
er, and the product.
The Chevrolet wholesale organization will give special
attention to these problems. They propose to personally
discuss this matter with each of their dealers in those
areas where such activity is reported to exist and ask
them to review their operations in the light of the critical
nature of the problem as it affects the good will of the
product they sell, the entire franchise system of distribu-
tion, and the validity of any arrangement they may have
with a discount house under the provisions of their
Chevrolet Dealer Selling Agreement.
Let me assure you that we will continue our efforts to
protect the good will of our products by every available
legal means.
You may wish to review this letter with your salesmen,
so that they too will more fully understand the position
of _aevrolet with respect to the matters outlined herein.
Very truly yours, K. FE. Staley, General Sales
Manager.
1316
{fol. 1899] OLDSMOBILE
Division of General Motors Corporation
Lansing 21, Michigan
December 30, 1960.
To all Oldsmobile Dealers:
We are taking this means of acquainting all Oldsmobile
dealers with the problems incident to membership discount
outlets offering new Oldsmobile cars for sale to members
and their friends and the position of Oldsmobile with
respect to this growing activity. We have received letters
and telegrams from some dealers and employes of dealer-
ships expressing deep concern as to the effects of this
type of competition on their business,
The substance of these communications, while varying
in content, implies that Oldsmobile Division as a manu-
facturer is either not aware of these practices or, that
knowing about the situation refuses to recognize such
practices as “unfair competition” to enfranchised dealers,
as well as an unsound method for potential customers to
invest in new Oldsmobile products. Some have even sug-
gested that Oldsmobile condones these practices as a
means of obtaining additional sales.
All these implications are entirely unwarranted, and
reflect a lack of understanding by some of the Oldsmobile
Quality Dealer Program and the coniizuity of our efforts
to implement the Program.
Oldsmobile Division does not and has not sold its new
passenger cars and trucks for resale to any outlets other
than authorized Oldsmobile dealers. Frankly I believe
every Oldsmobile dealer knows this, but it appears that
some of their employes may not be quite as well informed.
The reported recent expansion of the activities of so-
called membership discount houses into the field of motor
vehicle retail sales has been brought to our attention by
members of our wholesale organization.
Inquiries have been made, and we are advised that these
discount outlets either (1) purehase their Oldsmobile
motor vehicles from Oldsmobile dealers for resale to mem-
bers and their friends, or (2) by prearrangement with
some Oldsmobile dealers, they are in a position to make
1317
a deal with a customer for a price and then refer the
customer to the Oldsmobile dealer for delivery of the
vehicle at the price established by the discount house. In
the latter event, the delivering Oldsmobile dealer report-
edly pays a substantial portion of the gross profit realized
on the deal to the discount establishment for division
among the operator of the discount house, the operator of
the automobile concession, and the automobile salesman.
[fol. 1900] Where the motor vehicles are purchased from
an Oldsmobile dealer and resold as new-used cars, the
transaction is nothing more than what has generally
become to be recognized in the trade as a “bootleg” sale.
On numerous occasions during the past several years,
the management of General Motors Corporation has gone
on record with the General Motors dealer organization
expressing its deep concern with respect to this practice,
which is recognized as being most detrimental to the
good will which has been established over the years for,
and identified with, the dealer, the manufacturer and the
product.
When a customer purchases a new-used Oldsmobile car
from one of the so-called discount houses, he reportedly
does not receive an Oldsmobile Dealer New Car Warranty
as would the original purchaser of the vehicle. Further-
more, the discount house normally provides no service
facilities for the after-purchase needs of the eustomer. In
attempting to trade upon the capital facilities of author-
ized dealers, the discount house seller reportedly tells the
customer to take his car to any authorized Oldsmobile
dealer for his service requirements. If the purchaser is
not satisfied with the service he receives from the au-
thorized dealer, he then blames Oldsmobile because, as an
owner of an Oldsmobile product, he expects the same
high degree of service which owners of Oldsmobile ve-
hicles have learned to enjoy over the years from the
Oldsmobile dealer organization.
While the management of General Motors Corporation
has repeatedly pointed out the pitfalls of the “quick-
profit” bootleg sale to its dealer organization, it has at
the same time recognized the right of every dealer to
lawfully resell his merchandise to anyone,
On May 3, 1957, the President of General Motors Cor-
1318
poration sent all General Motors dealers a copy of his
letter-reply to a protest against bootlegging from the
Automobile Dealers Association of Indiana. The follow
ing quotation is from that letter:
“For several years it has been quite clear to those
who have kept informed as to the interpretation of
the antitrust laws that the Department of Justice has
taken a firm position, both in statements and opinions,
that any restriction upon the right of a dealer having
title to motor vehicles to sell such motor vehicles to
anyone, anywhere at any price, was a violation of the
antitrust laws. Judicial opinions handed down over
these years tended to confirm this interpretation.
“This ‘right of the dealer to sell the motor vehicles
to which he has title’ as he pleases, is the key to these
problems. It is the exercise of this right which first
moves the motor vehicles into the bootleg channel.
Sven if there were extenuating circumstances which
motivated the movement of cars into the bootleg
channel, unquestionably there are many such sales
by authorized dealers made solely for the purpose
of obtaining a quick profit.”
[fol. 1901] The procedure whereby some discount out-
lets, which offer new cars for sale, make a deal with a
customer, and then, as prearranged with an authorized
dealer, turn the transaction over to that dealer for clos-
ing and delivery of the vehicle, is being improperly
characterized by some selling dealers as a “referral.”
Such arrangements, however, are far different from the
casual practice in the industry whereby salesmen encour-
age referrals from friends and others who chance upon a
prospective new car customer. The reports we have re-
ceived indicate that these discount outlets are advertising
new cars for sale at established business locations, fre-
quently far removed from the location of the selling deal-
er. In effect, they in some instances represent the estab-
lishnient of a second and unauthorized sales outlet or
location contrary to the provisions of the Oldsmobile
Dealer Selling Agreements.
More importantly, arrangemen's of this type tend to
1319
downgrade the enfranchised dealer as a new car merchant
in the eyes of the public. It is difficult to understand
how any dealer who has invested thousands of dollars in
capital equipment to merchandise new ears can be a party
to an arrangement which permits a discount outlei to
discret his merchardising ability by offering new cars for
sale at purported “savings” to the customer, and then
not only assume the obligation for the sale but also share
his gross profit on the transaction with cae discount house.
Oldsmobile Division recognizes the problems raised by
the discount house new ear merchandising activities. They
are critical problems for the public, the franchised dealers,
and the manufacturers. New car sales by these outlets do
not represent one iota of additional business for the dealer
organization or the factories. They represent no savings
to the public but only result in a dilution of the gross profit
on each transaction which would otherwise be made by the
franchised dealers who have the service facilities and
trained mechanics to insure the eustomer's enjoyment of
his investment in a new car. Most importantly, they
threaten the good will of the dealer organization, the manu-
facturer, and the product.
The Oldsmobile wholesale organization will give speciai
attention to these problems. They propose to personally
diseuss this matter with each of their dealers in those areas
where such activity is reported to exist and ask them to
review their operations in the light of the critical nature
of the problem as it affects the good will of the product
they sell, the entire franchise system of distribution, and
the validity of any arrangement they may have with a
discount house under the provisions of their Oldsmobile
Dealer Selling Agreement.
Let me assure you that we will continue our efforts to
protect the good will of our products by every available
legal means.
You may wish to review this letter with your salesmen,
so that they too will more fully understand the position of
Oldsmobile with respect to the matters outlined herein.
Very truly yours, Emmett P. Feely, General Sales
Manager.
1320
{fol. 1902] GeneraL Motors Corporation
Pontiac, Michigan
Pontiac Moror Division
December 30, 1960.
To all Pontiac Dealers:
We are taking this means of acquainting all Pontiac
dealers with the problems incident to membership discount
outlets offering new Pontiac cars for sale to members and
their friends and the position of Pontiac with respect to
this growing activity. We have received letters and tele-
grams from some dealers and employes of dealerships
expressing deep concern as to the effects of this type of
competition on their business.
The substance of these communications, while varying
in content, implies that Pontiac Motor Division as a
manufacturer is either not aware of these practices or,
that knowing about the situation refuses to recognize such
practices as “unfair competition” to enfranchised dealers,
as well as an unsound method for potential customers to
invest in new Pontiac products. Some have even sug-
gested that Pontiac condones these practices as a means
of obtaining additional sales.
All these implications are entirely unwarranted, and
reflect a lack of understanding by some of the Pontiac
Quality Dealer Program and the continuity of our efforts
to implement the Program.
Pontiac Motor Division does not and has not sold its
new passenger cars for resale to any outlets other than
authorized Pontiac dealers. Frankly, I believe every Pon-
tiac dealer knows this, but it appears that some of their
employes may not be quite as well informed.
The reported recent expansion of the activities of so-
called membership discount houses into the field of motor
vehicle retail sales has been brought to our attention by
members of our wholesale organization.
Inquiries have been made, and we are advised that these
discount outlets either (1) purchase their Pontiac motor
vehicles from Pontiac dealers for resale to members and
their friends, or (2) by prearrangement with some Pontiac
dealers, they are in a position to make a deal with a cus-
1321
tomer for a price and then refer the customer to the
Pontiac dealer for delivery of the vehicle at the price
established by the discount house. In the latter event,
the delivering Pontiac dealer reportedly pays a substan-
tial portion of the gross profit realized on the deal to the
discount establishment for division among the operator of
the discount house, the operator of the automobile con-
cession, and the automobile salesman.
(fol. 1903] Where the motor vehicles are purchased from
a Pontiac dealer and resold as new-used cars, the transac-
tion is nothing more than what has generally become to
be recognized in the trade as a “bootleg” sale. On nu-
merous occasions during the past several years, the map
agement of General Motors Corporation has gone on rec-
ord with the General Motors dealer organization express-
ing its deep concern with respect to this practice, which
is recognized as being most detrimental to the good will
which has been established over the years for, and identi-
fied with, the dealer, the manufacturer and the product.
When a customer purchases a new-used Pontiac car
from one of the so-called discount houses, he reportedly
does not receive a Pontiac New Car Warranty as would
the original purchaser of the vehicle. Furthermore, the
discount house normally provides no service facilities for
the after-purchase needs of the customer. In attempting
to trade upon the capital facilities of authorized dealers,
the discount house seller reportedly tells the customer to
take his car to any authorized Pontiac dealer for his
service requirements. If the purchaser is not satisfied
with the service he receives from the authorizd dealer,
he then blames Pontiac because, as an owner of a Pontiac
product, he expects the same high degree of service which
owners of Pontiac vehicles have learned to enjoy over
the years from the Pontiac dealer organization.
While the management of General Motors Corporation
has repeatedly pointed out the pitfalls of the “quick-
profit” bootleg sale to its dealer organization, it has at
the same time recognized the right of every dealer to
lawfully resell his merchandise to anyone.
On May 3, 1957, the President of General Motors Cor-
poration sent all General Motors dealers a copy of his
letter-reply to a protest against bootlegging from the
1322
Automobile Dealers Association of Indiana. The follow-
ing quotation is from that letter:
“For several years it has been quite clear to those
who have kept informed as to the interpretation of
the antitrust laws that the Department of Justice has
taken a firm position, both in statements and opinions,
that any restriction upon the right of a dealer having
title to motor vehicles to sell such motor vehicles to
anyone, anywhere at any price, was a violation of the
antitrust laws. Judicial opinions handed down over
these years tended to confirm this interpretation.
“This ‘right of the dealer to sell the motor vehicles
to which he has title’ as he pleases, is the key to
these pruhlems. It is the exercise of this right which
first moves the motor vehicles into the bootleg chan-
nel. Even if there were extenuating circumstances
which motivated the movement of cars into the boot-
leg channel, unquestionably there are many such sales
by authorized dealers made solely for the purpose of
obtaining a quick profit.”
The procedure whereby some discount outlets, which
offer new cars for sale, make a deal with a customer, and
then, as prearranged with an authorized dealer, turn the
transaction over to that dealer for closing and delivery
of the vehicle, is being improperly characterized by some
selling dealers as a “referral.” Such arrangements,
however, are far different
[fol. 1904] From the casual practice in the industry
whereby salesmen encourage referrals from friends and
others who chance upon a prospective new car customer.
The reports we have received indicate that these discount
outlets are advertising new cars for sale at established
business locations, frequently far removed from the loca-
tion of the selling dealer. In effect, they in some in-
stances represent the establishment of a second and
unauthorized sales outlet or location contrary to the provi-
sions of the Pontiac Dealer Selling Agreements.
More importantly, arrangements of this type tend to
downgrade the enfranchised dealer as a new car merchant
in the eves of the public. It is difficult to understand how
any dealer who has invested thousands of dollars in capi-
1323
tal equipment to merchandise new cars can be a party to
an arrangement which permits a discount outlet to dis-
credit his merchandising ability by offering new cars for
sale at purported “savings” to the customer, and then not
only assume the obligation for the sale but also share his
gross profit on the transaction with the discount house.
Pontiac Motor Division recognizes the problems raised
by the discount house new car merchandising activities.
They are critical problems for the public, the franchised
dealers and the manufacturers. New car sales by these
outlets do not represent one iota of additional business
for the dealer organization or the factories. They repre-
sent no savings to the public but only result in a dilution
of the gross profit on each transaction which would other.
wise be made by the franchised dealers who have the
service facilities and trained mechanics to insure the
customer’s enjoyment of his investment in a new ear.
Most importantly, they threaten the good will of the
dealer organization, the manufacturer, and the product.
The Pontiac wholesale organization will give special
attention to these problems. They propose to personally
discuss this matter with each of their dealers in those
areas where such activity is reported to exist and ask
them to review their operations in the light of the critical
nature of the problem as it affects the good will of the
product they sell, the entire franchise system of distribu-
tion, and the validity of any arrangement they may have
with a discount house under the provisions of their Pon-
tiac Dealer Selling Agreement.
Let me assure you that we will continue our efforts to
protect the good will of our products by every available
legal means.
You may wish to review this letter with your salesmen,
so that they too will more fully understand the position
of Pontiac with respect to the matters outlined herein.
Very truly yours, Frank V. Bridge, General Sales
Manager.
1324
[fol. 1905] Is rae Unrrep States Disreicr Court
Derenpants’ Exuisir AW
Mr. J. M. Roche, 14-146 G.M. Bldg.
K. E. Staley, A-246 G.M. Bldg.
December 29, 1960.
This is to advise that the letter on “discount houses”
referred to in your memorandum of December 28th, 1960
to General Sales Managers was mailed to all Chevrolet
Dealers on December 29th, 1960.
The five copies of this letter which you requested are
attached.
Very truly yours, ——, ——.
KES mw
Attachs.
1325
(fol. 1906] In THe Unrrep States District Court
Derenpants’ Exursrr AX
February 15, 1961.
Mr. John S. Gordon, President
General Motors Building
New York City, New York
Dear Sir:
For the past seven years the Fleet Sales Company has
provided qualified prospects for new cars dealers in the
Los Angeles Area. We have developed a particular
method which has been successful in locating and qualify-
ing new car prospects for those dealers wishing to avail
themselves of our services. This is our sole function.
As you well know, factory pressure has been brought to
bear on General Motors dealers suggesting that they cease
to do business with “discount houses”. Unfortunately and
wrongly, we have been included in this group.
It is not practical for us to remain in business unless
we prospect for all makes of cars and certainly we could
not survive without Chevrolet. Therefore, unless our pros-
pecting service is approved or at least left up to each
dealer to freely decide for himself, you will be forcing us
out of existence.
We would be most happy to discuss this matter with you
in your office, our office, by telephone or any place you may
suggest at your earliest convenience in order +o clarify
any misconceptions you may have regarding our function.
Very truy yours, James Fahy, Partner, Virgil Dunn,
Partner.
Copies to: E. N. Cole, General Mgr., R. M. O'Connor,
Chevrolet Zone Mgr., R. M. Cash, Chevrolet Regional Man-
ager.
(fol. 1907] Is tHe Unrrep States District Court
Derenpants’ Exuisir AY
GENERAL Motors CorPoraTION
Inter-Organization Letters Only
March 23. 1961.
To: Mr. Lawrence Averill
Assistant General Sales Manager
Address: Chevrolet Motors Division
A-268
Dear Larry:
You will recall our conversation relative to a letter John
F. Gordon, President, received from Mr. James Fahy,
Fleet Sales Company, Los Angeles complaining that “fac-
tory pressure has been brought to bear on General Motors
dealers suggesting they cease doing business with discount
houses”. Copies of Mr. Fahy’s letter were sent to Messrs.
FE. N. Cole, R. M. O’Connor and R. M. Cash.
Attached is copy of our reply to Mr. Fahy as drafted
by the Legal Department. We are forwarding copies of
this correspondence to Messrs. Cole and O’Connor.
Sincerely, A. H. Belfie, Merchandising Manager.
AHB:jf
Attach.
1327
[fol. 1908] GBH
Genera. Motors CorPoraTION
General Motors Building
3044 West Grand Boulevard
Detroit 2, Michigan
Department of Justice, March 29 1961,
Division of Records, Anti-Trust
March 23, 1961.
Mr. James Fahy
Mr. Virgil Dunn
Fleet Sales Company
3870 Crenshaw Boulevard
Los Angeles 8, California
Gentlemen:
Your letter of February 15, 1961, addressed to Mr. John
F. Gordon, President, General Motors Corporation, has
been referred to the undersigned for attention and reply.
This will also serve as an acknowledgement of the copies
of that letter which you sent to Mr. E. N. Cole, General
Manager, Chevrolet, Mr. R. M. Cash, Chevrolet Regional
Manager, and Mr. R. M. O'Connor, Chevrolet Zone Man-
ager.
I have no knowledge of what you term “factory pres-
sure” having been brought to bear on General Motors
dealers suggesting that they cease to do business with
“discount houses”.
Every General Motors dealer has a Selling Agreement
which provides among other things, that the dealer shall
furnish a place of business satisfactory as to appearance
and location and adequate in size for new motor vehicle
sales and service operations; and that once established
in facilities and at a location mutually satisfactory to the
dealer and General Motors, the dealer will not establish
a new or different location, branch sales office, or place of
business without the prior written approval of General
Motors.
It was brought to our attention that some dealers had
entered into arrangements with discount houses operating
from advertised locations, far removed from the dealers’
1328
locations—under which the discount houses were paid a
commission for advertising and sell cars on behalf of the
dealers. The dealers were advised that such arrangements
were subject to investigation by General Motors Corpora-
tion in the light of the provisions of the Dealer Selling
Agreements.
[fol. 1909] This notice to dealers reminding them of the
lawful obligations which they had assumed as a part of
their Selling Agreements is not to be confused with the
idea of “factory pressure” as implied in your letter.
Every dealer knows, and has been so advised by Gen-
eral Motors, that as an independent merchant he is law-
fully entitled to sell his inventory to anyone, anywhere, at
any price. In doing so, however, he is not privileged to
breach a lawful provision in the Selling Agreement which
he has executed without rendering himself responsible for
such breach.
Very truly yours, A. H. Belfie, Merchandising Man-
ager.
AHB:jf
[fol. 1910] [File endorsement omitted]
1329
[fol. 1911] In rae Unrren States District Court
DerenpDANTs’ Exuisir AZ
In tHe Unitrep States District Court ror THE
SoutHern Disrrict or Catirornia, CentRAL Drvision
Civil No. 62-1208-CC
StrPu.aTion or Facts Number Toree—May 20, 1964
Untrep States or America, Plaintiff,
v.
GENERAL Motors Corporation, Loson CHEVROLET DEALERS
Association; Derauers’ Service, Inc.; and Fooruinn
CueEvroteT Deauers Association, Defendants.
[fol. 1912] Plaintiff and each of the defendants, through
their respective counsel, hereby stipulate that witnesses,
if called, would testify to the following facts:
1. GM Exhibits A and B are accurate photographic
copies of maps prepared and copyrighted in 1961 by Renie
Map Service, Los Angeles, California and are accurately
scaled and topographically correct representations of those
portions of Los Angeles, Orange and San Bernardino
Counties, California, shown thereon as they were during
the period January 1, 1960 through October 12, 1961.
Colored numbered dots have been affixed to each of said
maps. (Reduced photographic copies of said Exhibits are
attached to this stipulation as Attachments A and B,
respectively. )
2. The blue numbered dots shown on GM Exhibits A
and B accurately reflect the geographic location of each
Chevrolet dealer described in Paragraph 17 of the Stipula-
tion of Facts No. 1 in these proceedings, located in the
Chevrolet Los Angeles Metropolitan Area (as defined in
Paragraph 17, Exhibit 4.2 of said Stipulation) during the
1330
said period of January 1, 1960 through October 12, 1961.
The number on each blue dot represents the name of the
Chevrolet dealer described opposite the same number in
GM Exhibit C, a copy of witch is attached hereto as
Attachment C.
[fol. 1913] 3. The red numbered dots shown on GM
Exhibit A accurately reflect the geographic locations of
those discount houses and referral services, set forth in
Paragraph 28 of the Stipulation of Facts No. 1 in these
proceedings, located within said Los Angeles Metropolitan
Area. The number on each red dot represents the name
of the discount house or referral service described opposite
the same number in GM Exhibit D, a copy of whieh is at-
tached hereto as Attachment D.
4. GM Eyhibit FE, a copy of which is attached hereto
as Attachment FE, is an accurate listing as of September
1961, obtained from R. L. Polk & Co., Detroit, Michigan,
of every Ford, Mercury and Comet new car dealer (here-
after: “Ford Dealer”) and its location, located in said Los
Angeles Metropolitan Area. Each black numbered dot
shown on said GM Exhibit B accurately reflects the geo-
graphic location of each such Ford Dealer in said area.
Each number on each black dot represents the name of the
Ford Dealer described opposite the same number in said
GM Exhibit EF.
5. GM Exhibit F, a copy of which is attached hereto
as Attachment F, is an accurate listing as of September
1961, obtained from R. L. Polk & Co., Detroit, Michigan, of
every Plymouth and Dodge dealer (hereafter: “Chrysler
Dealer”) and its location, located in said Los Angeles
Metropolitan Area, Fach orange numbered dot shown on
[fol. 1914] said GM Exhibit B accurately reflects the geo-
graphic location of each such Chrysler Dealer in said area.
‘ach number on each orange dot represents the name of
the Chrysler Dealer described opposite the same number
in said GM Exhibit F.
6. GM Exhibit G, a copy of which is attached hereto
as Attachment G, is an accurate listing as of September
1961, obtained from R. L. Polk & Co., Detroit, Michigan,
1331
of every Rambler dealer and its location, located in said
Los Angeles Metropolitan Area. Each green numbered
dot shown on said GM Exhibit B accurately reflects the
geographic location of each such Rambler dealer in said
area, Each number on each green dot represents the name
of the Rambler dealer described opposite the same number
in GM Exhibit G.
7. GM Exhibit H, a copy of which is attached hereto as
Attachment H, is an accurate listing as of September
1961, obtained from R. L. Polk & Co., Detroit, Michigan,
of every Studebaker dealer and its location, located in
said Los Angeles Metropolitan Area. Each brown num-
bered dot shown on said GM Exhibit B accurately reflects
the geographic location of each such Studebaker dealer in
said area. Each number on each brown dot represents
the name of the Studebaker dealer described opposite the
same number in GM Exhibit H.
[fol. 1915] 8. GM Exhibit I, a copy of which is attached
hereto as Attachment I, is an accurate listing as of Sep-
tember 1961, obtained from R. L. Polk & Co., Detroit,
Michigan, of every Volkswagen dealer and its location,
located in said Los Angeles Metropolitan Area. Each
magenta numbered dot shown on said GM Exhibit B
accurately reflects the geographic location of each such
Volkswagen dealer in said area. Each number of each
magenta dot represents the name of the Volkswagen
dealer described opposite the same number in GM Ex-
hibit I.
9. GM Exhibit J, a copy of which is attached hereto
as Attachment J, is an accurate and complete tabulation
and compilation prepared from Exhibit B, showing by
identifying number, esch Chevrolet dealer, Ford dealer,
Chrysler dealer, Rambler dealer, Studebaker dealer and
Volkswagen dealer located within a five mile radius of
each Chevrolet dealer indexed in Exhibit C.
1332
[fol. 1916] Dated: May 20, 1964.
Maxwell M. Blecher, Robert C. Weinbaum. By:
Maxwell M. Blecher, Attorney, Department of
Justice. O’Melveny & Myers, Lawler, Felix &
Hall, Aloysius F. Power, Robert A. Nitschke,
Nicholas J. Rosiello. By Homer I. Mitchell,
Hansen & Dolle, Glenn S. Roberts. By: Victor
R. Hansen, Attorneys for Defendants.
It is so ordered this 1st day of June, 1964.
Charles H. Carr, United States District Judge.
1333
(fol.1917] I~ rue Unirep States District Court
’
Derenpants’ Exnrir BA
Summary of Profitability in the Service and Parts Departments in 1960 for
the 76 Los Angeles Metropoli
tan Area Chevrolet Dealers
Median
Net Profit
or (Loss)
Number Percent in Serv.
of of & Parts
Dealers Dealers Depts
No. % 3
ERE ST ER Naa eelt ran he 23 30 11,900
Non-profitable................ 53 70 (20, 500)
Eee ee 76 100 (14, 100)
(fol. 1918] In tHe Unrrep States District Court
Derenpants’ Exuisir BB
Estimated Reduction in New Car Volume to Eliminate All P
rofit for Volume
of Los Angeles Metropolitan Area Chevrole Ts
t Deale
Dealer Volume Class Reduction to Eliminate Profit
(Before Reduction)
% Reduction No. Cars Per Year
Me ts ye eee 12% 36
eee RMK dee we 17% 68
eRe een yo 33% 165
eR epee 21% 126
700
atrah aie a deine aera 30% 210
[fol. 1919] In tHe Unrrep States District Court
Derenpants’ Exuisir BC
Estimated Reduction in New Car Selling Price to Eliminate All Profit for Volume
Classes of Los Angeles Metropolitan Area Chevrolet Dealers
Price Reduction to Eliminate Profit
Dealer Volume % Reduction Dollars Per Car
eS ee 1.0% $27
Ms = loieacd varios 1.4% $38
Gr apes ewcoe Ws 2.9% $77
RR a 1.8% $48
. er: 2.6% $69
[fol. 1920] Is tHe Unrrep Srares District Court
Derenpants’ Exuisir BD
Median Gross Profit Per New Chevrolet Pavone Ove Sold in 1960 by Les
Angeles Metropolitan Area Chevrolet Dealers o Sold Through Discount
Houses or Referral Services
(Current Models Only)
Median Gross
Number Sold Profit Per Car
Referral- Referral-
Discount Discount
Dealer Regular House Regular House
(No.) (No.) ($) ($)
ee ee 5,970 1,336 220 235
a ads Vvcen sees 643 355 249 254
CN awa besee son 600 239 231 251
RS ons oe v6 oe as 1,259 262 195 223
NS Orr a 1,573 104 223 227
ASRS AE Se 668 93 232 221
aso chooks 789 138 230 224
1335
(fol. 1921] Ly THe Unrrep States District Court
Derenpants’ Exuisir BE
Taken From Hirscu, Intropuction to Mopern STATISTICs,
p 45 (The Macmillan Company, 1957)
oe AU
Oocvicanes
ie esac,
Reprinted from Collier's by Permission, copyright 1953, The Crowell-Collier Publish
ing Company.
“Average annual income here's about $12,000. There's fifty of us
clears $2,000 and one fellow makes half « million”
In the example depicted the Average as determined by
the Mep1an is $2,000 while the Average as determined by
the Arrrumetic Mean is $11,765.
1337
In THe Unrrep States District Covurr
(fol 1922)
Derenpants’ Exurir BF
++
7
4
J
|
TTT
IN
DOT,
ee
rpuipeae go
mea
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H4++4
j
~ +5 ams oa Se &
'
ee:
j
+
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Regression Equation:
}-$-$1- ae e : i Ae
4 + 4 ae - + +-
+ st 8 tA ett
es ocneeeon ne t 7 | = bit ;
4 t+ ae bo jet. {
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SS ey eo ee Cees
é ar
NUMBER REFERS TO THE NUMBER OF DEALERS
WITHIN THE VOLUME CLASS AND INCLUDED
THE AVERAGE VALUE REPRESENTED BY THE
8 Ba pee ii
EEEEEREEH EHt
4h i mS me Be
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a 4 wah
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ae
ee
5
'
jt}.
j
-Lt .
Los Angeles Metropolitan Area Chevrolet Dealers)
l N
(Based on 1960 Financial Statements of the 73
1960 COMBINED GROSS PROFIT FOR NEW AND USED CAR DEPARTMENTS
1 oh
(# ,000° 'T$) SamueienE Wes Guan, Gry tan Wea 110ua S80HD
Paar er Pe eT ae
oe Se ES hs ee ee a ee ee
we ee ee
ren oe ee eS
8
es
8
@
8
ie)
8
=
7
i
Bx, mee |
ri |
‘ 2 ee
BURHRADD Re IT ce i
a OE iy raw Sede | oe
4 cj one, Wis re ms 8
4 i | i |
; ee Se St 1 i a Oe a eS ee | a bcheahindssd j
i H ij j ; H st '
a4 Sak Ima + rir; I + 4 To oo oe ime -| = a
4 414 eae eae eee eae ei 444 aH} head DLS ie S| *
i ' aj i ji ee ; ase 3 Ae oa
pn on ey t , ss ia em i “ttt T 77 mt rs 4 ' -4-5 44 1
Oh Be 36 a RE Toh SAs i |
oe i a tt 2eeec eng we ie §
a oe 33) ee a 4 sa On Bet ma t. wl + mG
ae a Pt RRERES & rT To
4 4 Reet eeen SEs SR ERS a J 1+ ee + ie | it r +i .: 44 ‘
ae SUUSUCUGGe POUGOuChue Gagne CaGce COB RNGRORSpAn dpanae ne
{ SS000 SSSR SESE ROSS eee SOON GREE Eee Ree ee VE oe,
BRM aw My Sas Ee i BE ie 9 ' -}- +} |
In tHE Unrrep States District Court
Derenpants’ Exursrr BG
—
GROSS PROFIT FOR SERVICE
P.
/
= +} —-- -
7
|
i
!
!
!
ae Se a
= a
RTMENT VOLUME
E NUMBER OF DEALERS
ie iam, REFERS TO
Bete WITHIN THE |
ae THE AVERAGE
—— } acne ms
|
|| % Ree baa
1960 COMBINED GROSS PROFIT FOR SERVICE AND PARTS DEPARTMENTS 7 Ltt i}
(Based on 1960 Financial Statements of the 73 > ga Be hes ie He waSs ae
Los Angeles Metropolitan Area Chevrolet Dealers) Ri Gy Se | |
; e 7 | j a. eo
q Ve = UF : a ee ee ap
wesc 1H a ghcade
i |! « | | Ae
| e ae |
. 4 sam Seana Be addin ae
=~ {| | Pa | | |
oy : j ' j i . i
B83 | a | i Linear Regression Equation
st _.¥ =-$624,800 + $279,200 Log x
~~ lo i H ; ;
E oy Sd os Es ——) Soon ae @ ad
a
a
JOLUME CLASS AND INCLUDED IN
VALUE REPRESENTED BY THE DOT.
a
i i
i iii
!
i ‘
|
= , i
|
| |
ee Se ee eee ae mei oe nen _——
io
0 1500
2000
1338
—
I
1200
ob + afin eon H 4 =
Ee Ht PE Ht ee
t+ 4 ia t+ 4 = : .
{
i
j
j
|
|
Derenvants’ Exurrr BH
In tHE Unrrep Srares District Courr
Los Angeles Metropolitan Area Chevrolet Dealers)
ae a
(Based on 1960 Financial Statements of the 73
1960 NET MISCELLANEOUS INCOME OF THE ENTIRE DEALERSHIP
: Maes EMEAS LEE ERED SeSeS Sease goaRA & 6
' pee —— . 4 ee
+ (8,000‘1I$) dIHSUATvVad AYLINA FHL SOS fe x oe
Rees Fee 40 HAOONI SMOANVTTROSIN TAN |
b.} “<3 He ie : or a | ar Ne abe to ran ’ {: 2: © eee \ : z 4 } +4--LP bein a 8
ro} re) e.. ro) ro) ro) fo) on
a N @ co = WN :
4 aA os
600
500
400
[fol. 1925]
In THE Unirep States District Courr
Derenpants’ Exuisir BI
* eee 1960 COMBINED VARIABLE SELLING EXPENSES FOR THE NEW AND USED CAR DEPARTMENTS |
see |
gree BETH SER : ay (hres "a
2 get Nase (Sased on 1960 Financial Statements of the 73 a. Odo : | =
7 bh Los Angeles Metropolitan Aree Chevrolet Dealers) a es as
ee eee | | |
BL | | | te Se |
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ae | A Gah as» ae oe ee | |
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| | Linear Regregsion Equation:
| _¥ =-$13,009 + $175 xX !
NEW CAR DEPARTMENT VOLUME
| . i ot ok ee!
800 1000 1200 1400 1600 1800 2000
In tHe Unrrep Srares District Court
Derenpants’ Exursit BJ
—+ :
(Based on 1960 Financial Statements of the 73
Los Angeles Metropolitan Area Chevrolet Dealers)
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B00
{fol. 1927] In tHE Unrrep States District Courr
Derenpants’ Exurerr BK
| ayers “1960 COMBINED SEMI-FIXED EXPENSES OF THE SERVICE AND PARTS DEPARTMENTS
(Based on 1960 Financial Statements of the 73
Los Angeles Metropolitan Area Chevrolet Dealers)
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1343
Derenpants’ Exurerr BL
In THE Untrep Srares District Covrr
(fol. 1928}
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[fol.1929] Uv tHe Unrrep Srares District Court
Derenpants’ Exurerr BM
Mori ot a how ie: Roles Volume Upes Ton neeles Metropolitan Area Cheyrolet
Per Cent Reduction
10 12
Financial Reference Number of of New C Car %
Item Exhibit 300 264
($000’s) Poor Dh ath (3000's)
Grom profit on new and used cars. . BF 113.8 108.2 102.7 100.5
Gross profit on parts and service.. BG 66.8 668 66.8 66.8
Mi us net income........
Ce stetwesrveowvee
ee 2. ee
Oe es
SOP CS Perecesesweesceserses
ee
1346
{fol. 1930] In tHe Unrrep Srares Disrricr Court
Derenpants’ Exureir BN
Effect of a Loss in Sales Volume Upon a Los Angeles Metropolitan Area Chevrolet
Dealer of the 400 New Car Volume Class
Per Cent Reduction
5% 10% 15% 17%
Number of New Car Sales
Financial Reference
Item Exhibit 400 380 360 340 332
($000’s) ($000’s) ($000’s) ($000’s) ($000’s)
Gross profit on new and
anes Le ahaa BF 150.8 143.4 136.0 128.6 125.6
Splat Paola is BG 101:7° 103.7 101.7. 101.7 - 14.7
Miscellaneous net income. BH 24.8 23.7 22.6 21.6 21.1
Total gross profit. . . 277.3 268.8 260.3 251.9 248.4
Variable selling expenses.. BI 57.0 53.5 50.0 46.5 45.1
Semi-fixed new and used
car expemses.......... BJ 63.6 62.3 61.1 59.8 59.3
lll BK 89.5 89.5 89.5 89.5 89.5
parts expenses........ 5 ; 4 ; '
Fixed expenses.......... BL 55.0 55.0 55.0 55.0 55.0
Total expenses...... 265.1 260.3 255.6 250.8 248.9
Net profit before bonuses
and income taxes..... 12.2 5 4.7 & (0.5)
aes sie Breakeven
point
1.547
[fol. 1931] In toe Unrrep States Disreict Court
Derenpants’ Exuisir BO
Effect of a Loss in Sales Volume Upon a Los Angeles Metropolitan Area Chevrolet
Dealer of the 500 New Car Volume Class
Per Cent Reduction
10% 20% 30% 33%
Number of New Car Sales
Financial Reference
Item Exhibit 500 450 400 350 335
($000’s) ($000’s) ($000’s) ($000’s) ($000’s)
Gross profit on new and
ee BF 187.8 169.3 150.8 132.3 126.7
I pare aurea dace shen BG 128.8 128.8 128.8 128.8 128.8
Miscellaneous net income. BH 30.2 27.5 24.8 22.1 21.3
Total gross profit. . . 346.8 325.6 304.4 283.2 276.8
Variable selling expenses. BI 74.5 65.8 57.0 48.2 45.6
Semi-fixed new and used
car expenses.......... BJ 78.3 75.2 72.0 68.9 68.0
a a. ae we teks 08.2 108.2
parts expenses........ 108. 108. 108. 108. 108.
Fixed expenses.......... BL 55.0 55.0 55.0 55.0 55.0
Total expenses...... 316.0 304.2 292.2 280.3 276.8
Net profit before bonuses
and income taxes..... 30.8 21. 12. 2. —0-
ae Breakeven
1348
(fol. 1932] Is tHe Untrep Srares District Court
Derenpants’ Exuisir BP
Effect of a Loss in Sales Volume U ne Metropolisen Area Chevseies
Dealer of the Noo aan olume C!
Per Cent Reduction
10% 20% 21%
Number of New Car Sales
Financial Reference
Item Exhibit 600 540 480 474
($000’s) ($000’s) ($000’s) ($000’s)
Seven pends om ane el vend come. BF 224.8 202.6 180.4 178.2
oe fit on parts and service... BG 150.9 150.9 150.9 150.9
us net income........ BH 35.6 32.4 29.1 28.8
Tota
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