AUTOS: Price Fixing in Cars?

After a four-month investigation of price fixing by auto dealers in major cities, the Justice Department last week got its first indictments. Named by a District of Columbia grand jury were 17 Ford, 14 Chevrolet and eleven Oldsmobile dealers. The charges: setting minimum prices on new cars for several years, as well as agreeing to refrain from price advertising and pegging prices of parts, accessories and service. In addition, Ford and Olds dealers were charged with setting minimum gross profits per sale ($225 for a Ford, $450 for an Olds). The Ford Motor Co. itself was accused of cooperating with a price-fix conspiracy by fixing resale prices of Ford parts.

Ford denied the charge, said it apparently grew out of a 1954 program of Ford dealers to make sure that wholesale parts were sold only to bona fide customers. But there was no agreement on the prices to customers. For the dealers, Dean Chaffin, president of the National Automobile Dealers Association, scoffed at the indictment. Said he: “If there was any attempt to fix prices, it was certainly a colossal failure. As every new-car buyer knows, for the past several years the retail prices of new cars have been the prices the customers have negotiated.” Nevertheless, the Justice Department plans to continue its price-fixing probe in New York, San Francisco and other cities.