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Re: You're correct but out of date (archive)

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Posted by . on September 28, 1999 at 15:19:00:

In Reply to: Your correct but irrelevent posted by MikeW on September 28, 1999 at 11:16:04:

: I'm not arguing that Saturn doesn't have to compete against Toyota, Honda, and even Chevy. They do. What I'm saying is that since the antitrust laws were written over half a century ago, they have been interpreted to mean that a manufacturer can't dictate retail pricing to their dealers. Again, that why the stick on the car says 'Manufacturer SUGGESTED retail price'. Now it seems that GM is trying to (and succeeding) enforce MSRP. So what changed to allow them to do this?

New legal and economic theories that basically say that the bottomline in antitrust should be whether or not consumers get hurt. The courts and the feds have *a lot* of room to interpret the statutes. They can interpret it strictly or leniently. They're choosing to go lenient these days, could easily change.

If you've been following the Microsoft case, notice that the overriding point being argued by both sides is "Did Microsoft's practices damage the consumer?"

: As far as the rest of their product line goes, Saturn gave them an opportunity reengineer the entire organization of a brand. One of the things they did was restrict the number of dealers. If you notice, there isn't a Saturn dealer on every street corner, as opposed to, say, Chevrolet, which does have a dealer on every street corner. More dealers = more competition between dealers = lower prices.

You're getting mixed up again. What affects the *average* price of Chevrolet's most of all is not the number of Chevrolet dealers, it's the number of dealers from Chevy's competitors. i.e. Ford, Buick, Chrysler, Dodge, etc. Even if there was only one Chevy dealer, if it is surrounded by Fords, Chryslers, Dodges, etc. then that Chevy dealer cannot jack up his prices without losing money. Okay, he can do it but only to that one dimbulb customer who has to have a Chevy at any price.

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