Freightliner LLC, a unit of DaimlerCrysler AG, has filed an anti-trust lawsuit against General Motor’s Allison Transmission division that claims Allison is monopolizing automatic transmissions for medium and heavy-duty on-road vehicles. Freightliner LLC—the parent of Freightliner Trucks, Freightliner Custom Chassis and Thomas Built Buses—alleges that GM engaged in “predatory” practices to stifle competitors that make manual and automated manual transmissions and to block new competitors from entering the market.
Freightliner said GM, through its Allison division, is virtually the only manufacturer of hydraulic planetary automatic transmissions and holds 99% of the U.S. market for transmission used in diesel-powered walk-in vans, full-size school buses, diesel-powered recreational vehicles and diesel-powered shuttle buses.
According to Freightliner, GM rolled out its Edge program in response to Caterpillar’s entry into the automatic Class 6 and 7 market. Freightliner alleged the program aimed “to preserve and extend GM’s monopoly position.”
Freightliner said that under the Edge program, it must expand its current 66% share of Class 6 and 7 trucks with Allison transmissions (excluding motor homes, school buses and shuttle buses) to 86% by 2010. Failure to do so will mean a reduction or elimination of discounts, warranty coverage, and product updates, Freightliner complained.
According to Freightliner, the Edge program effectively punishes Freightliner if it acquires transmissions from competitors and limits its ability to offer manual transmissions, which are cheaper and preferred over automatics by certain customers.
“GM’s predatory program requires continued exclusive dealing with GM on automatic transmissions and expands the lines in which GM has a monopoly position, squeezing out the lower-cost manual product, limiting product innovations and consumer choice,” Freightliner said.
GM denied the validity of Freightliner’s accusations.
In an emailed statement, GM said:
“The lawsuit is without merit and General Motors will vigorously defend against these claims. Allison Transmission's performance in the markets in which it competes has been superior because of the quality, competitive differences, efficiencies in lifetime costs, warranty, and fair price for a great product that is available to all. Standing behind our products, and trying to grow our business, is not a violation of antitrust law.”
The lawsuit was filed on July 28 at the U.S. District Court for Oregon, the home state of Freightliner LLC.To comment on this article, write to Terrence Nguyen at [email protected]