The Wayward Buses

The long-trumpeted Justice Department suit accusing General Motors of illegally monopolizing the manufacture and sale of buses (TIME, March 19) was finally announced last week with a touch of TV hoopla (see NATIONAL AFFAIRS). The 13-page complaint filed in Detroit's Federal District Court charged that G.M.'s bus division (annual sales: $55 million) conspired with four major bus operators to corner 84% (2,724 units) of the bus market last year. Its largest competitor, the Flxible Co., sold only 215.

G.M., according to the Justice Department, exercised illegal control by 1) putting a G.M. officer in as board chairman of a principal competitor; 2) extending preferential prices to favored customers; 3) refusing to sell buses to competitors of favored customers; and 4) inducing officials of municipal bus lines to write restrictive specifications to exclude bids from other manufacturers. As a result, said the complaint, more than 20 G.M. competitors have withdrawn from bus-building since 1925, and no new company has come into the field since 1946. The Government asked the court to "perpetually" prohibit G.M.'s monopolistic practices, and to enjoin G.M. from supplying more than 50% of the bus requirements of four principal bus operators (Greyhound Corp., National City Lines, New York City Omnibus Corp., Public Service Coordinated Transport).

Said G.M. President Harlow Curtice: "General Motors engages in no discrimination as regards prices, terms and conditions in the sale of its buses." G.M.'s leadership, he said, is based simply on the fact that its buses operate "from 1.5-c- to 2.5-c- per mile cheaper than competitors' buses. The economics of the motor-coach industry are such that a fraction of a cent operating cost per mile can spell the difference between success and failure of the operator. It would appear that the action seeks to regiment the customer--in effect telling him that he is not free to buy the product where he can get it to his best advantage."

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