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Ford Motor Co. v. United States, 405 U.S. 562 (1972)

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Ford Motor Co. v. United States, 405 U.S. 562 (1972)

From the U.S. Government Printing Office via GPO Access
 
Case:   FORD MOTOR CO. V. UNITED STATES

Case #: 405US562


       FORD MOTOR CO. V. UNITED STATES ET AL.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN

           DISTRICT OF MICHIGAN

        NO. 70-113.  ARGUED NOVEMBER 18, 1971-- DECIDED MARCH 29,

           1972 


IN THIS DIVESTURE ACTION UNDER SEC. 7 OF THE CELLER-KEFAUVER
ANTIMERGER ACT, THE GOVERNMENT CHALLENGED THE ACQUISITION BY APPELLANT,
FORD, THE SECOND LARGEST AUTOMOBILE MANUFACTURER, OF CERTAIN ASSETS OF
ELECTRIC AUTOLITE CO. (AUTOLITE), AN INDEPENDENT MANUFACTURER OF SPARK
PLUGS AND OTHER AUTOMOTIVE PARTS.  THE ACQUISITION INCLUDED THE
AUTOLITE TRADE NAME, AUTOLITE'S ONLY DOMESTIC SPARK PLUG PLANT, AND
EXTENSIVE RIGHTS TO ITS NATIONWIDE DISTRIBUTION ORGANIZATION FOR SPARK
PLUGS AND BATTERIES.  THE BRAND USED IN THE SPARK PLUG REPLACEMENT
MARKET (AFTERMARKET) HAS HISTORICALLY BEEN THE SAME AS THE ORIGINAL
EQUIPMENT (OE) BRAND.  AUTOLITE AND OTHER INDEPENDENTS HAD FURNISHED
MANUFACTURERS WITH OE PLUGS AT OR BELOW COST, SEEKING TO RECOUP THEIR
LOSSES BY PROFITABLE AFTERMARKET SALES.  FORD, WHICH PREVIOUSLY HAD
BOUGHT ALL ITS SPARK PLUGS FROM INDEPENDENTS AND WAS THE LARGEST
PURCHASER FROM THAT SOURCE, MADE THE AUTOLITE ACQUISITION IN 1961 FOR
THE PURPOSE OF PARTICIPATING IN THE AFTERMARKET.  AT ABOUT THAT TIME
GENERAL MOTORS (GM) HAD ABOUT 30% OF THE DOMESTIC SPARK PLUG MARKET. 
AUTOLITE HAD 15%, AND CHAMPION, THE ONLY OTHER MAJOR INDEPENDENT, HAD
50% (WHICH DECLINED TO 40% IN 1964, AND 44% IN 1966).  THE DISTRICT
COURT FOUND THAT THE INDUSTRY'S OLIGOPOLISTIC STRUCTURE ENCOURAGED
MAINTENANCE OF THE OE TIE AND THAT SPARK PLUG MANUFACTURERS, TO THE
EXTENT THAT THEY ARE NOT OWNED BY AUTO MAKERS, WILL COMPETE MORE
VIGOROUSLY FOR PRIVATE BRAND SALES IN THE AFTERMARKET.  THE COURT HELD
THAT THE ACQUISITION OF AUTOLITE VIOLATED SEC. 7 SINCE ITS EFFECT "MAY
BE SUBSTANTIALLY TO LESSEN COMPETITION" IN AUTOMOTIVE SPARK PLUGS
BECAUSE:  (1) "AS BOTH A PRIME CANDIDATE TO MANUFACTURE AND THE MAJOR
CUSTOMER OF THE DOMINANT MEMBER OF THE OLIGOPOLY," FORD'S PRE
ACQUISITION POSITION WAS A MODERATING INFLUENCE ON THE INDEPENDENT
COMPANIES, AND (2) THE ACQUISITION SIGNIFICANTLY FORECLOSED TO
INDEPENDENT SPARK PLUG MANUFACTURERS ACCESS TO THE PURCHASER OF A
SUBSTANTIAL SHARE OF THE TOTAL INDUSTRY OUTPUT.  AFTER HEARINGS, THE
COURT ORDERED THE DIVESTITURE OF THE AUTOLITE PLANT AND TRADE NAME
BECAUSE OF THE INDUSTRY'S OLIGOPOLISTIC STRUCTURE, WHICH ENCOURAGED
MAINTENANCE OF THE OE TIE.  THE COURT STRESSED THAT IT WAS IN THE SELF
INTEREST OF THE OE SPARK PLUG MANUFACTURERS TO DISCOURAGE PRIVATE-BRAND
SALES BUT NOTED THAT CHANGES IN MARKETING METHODS INDICATED A
SUBSTANTIAL GROWTH IN THE PRIVATE-BRAND SECTOR OF THE SPARK PLUG
MARKET, WHICH, IF ALLOWED TO DEVELOP WITHOUT UNLAWFUL RESTRAINT, MAY
ACCOUNT FOR 17% OF THE TOTAL AFTERMARKET BY 1980.  ADDITIONALLY, THE
COURT ENJOINED FORD FOR 10 YEARS FROM MANUFACTURING SPARK PLUGS;
ORDERED IT FOR FIVE YEARS TO BUY ONE-HALF ITS ANNUAL REQUIREMENTS FROM
THE DIVESTED PLANT UNDER THE "AUTOLITE" NAME, DURING WHICH TIME IT WAS
PROHIBITED FROM USING ITS OWN NAME ON SPARK PLUGS; AND FOR 10 YEARS
ORDERED IT TO CONTINUE ITS POLICY OF SELLING TO ITS DEALERS AT PRICES
NO LESS THAN ITS PREVAILING MINIMUM SUGGESTED JOBBERS' SELLING PRICE. 
IN CONTESTING DIVESTITURE, FORD ARGUED THAT UNDER ITS OWNERSHIP
AUTOLITE BECAME A MORE EFFECTIVE COMPETITOR AGAINST CHAMPION AND GM
THAN IT HAD BEEN AS AN INDEPENDENT AND THAT OTHER BENEFITS RESULTED
FROM THE ACQUISITION.  HELD: 

1.  THE DISTRICT COURT CORRECTLY HELD THAT THE EFFECT OF FORD'S
ACQUISITION OF THE AUTOLITE SPARK PLUG ASSETS AND TRADE NAME MAY BE
SUBSTANTIALLY TO LESSEN COMPETITION IN THE SPARK PLUG BUSINESS AND THUS
TO VIOLATE SEC. 7 OF THE CELLER-KEFAUVER ANTIMERGER ACT; AND THAT THE
ALLEGED BENEFICIAL EFFECTS OF THE MERGER DID NOT SAVE IT FROM
ILLEGALITY UNDER THAT PROVISION.  UNITED STATES V. PHILADELPHIA
NATIONAL BANK, 374 U.S. 321.  PP. 569-571. 

2.  THE RELIEF ORDERED BY THE DISTRICT COURT WAS PROPER.  PP. 571
578. 

(A) DIVESTITURE IS NECESSARY TO RESTORE THE PRE-ACQUISITION MARKET
STRUCTURE, IN WHICH FORD WAS THE LEADING PURCHASER FROM INDEPENDENT
SOURCES, AND IN WHICH A SUBSTANTIAL SEGMENT OF THE MARKET WAS OPEN TO
COMPETITIVE SELLING.  AFTER THE DIVESTITURE, WITH FORD AGAIN AS A
PURCHASER OF SPARK PLUGS, COMPETITIVE PRESSURES FOR ITS BUSINESS WILL
BE GENERATED AND THE ANTI-COMPETITIVE CONSEQUENCES OF ITS ENTRY AS A
MANUFACTURER WILL BE ELIMINATED.  PP. 573-575. 

(B) THE ANCILLARY INJUNCTIVE PROVISIONS ARE NECESSARY TO GIVE THE
DIVESTED PLANT AN OPPORTUNITY TO RE-ESTABLISH ITS COMPETITIVE POSITION
AND TO NURTURE THE COMPETITIVE FORCES AT WORK IN THE MARKETPLACE.  PP.
575-578. 

286 F.SUPP.  407, 315 F.SUPP.  372, AFFIRMED. 

DOUGLAS, J., DELIVERED THE OPINION OF THE COURT, IN WHICH BRENNAN,
WHITE, AND MARSHALL, JJ., JOINED AND IN WHICH (AS TO PART I AND PART OF
PART II) BLACKMUN, J., JOINED.  STEWART, J., FILED AN OPINION
CONCURRING IN THE RESULT, POST, P. 579.  BURGER, C.J., POST, P. 582,
AND BLACKMUN, J., POST, P. 595, FILED OPINIONS CONCURRING IN PART AND
DISSENTING IN PART.  POWELL AND REHNQUIST, JJ., TOOK NO PART IN THE
CONSIDERATION OR DECISION OF THE CASE. 

MR. JUSTICE DOUGLAS DELIVERED THE OPINION OF THE COURT. 

THIS IS A DIRECT APPEAL UNDER SEC. 2 OF THE EXPEDITING ACT, 32 STAT.
823, AS AMENDED, 15 U.S.C. 29, FROM A JUDGMENT OF THE DISTRICT COURT
(286 F.SUPP.  407, 315 F.SUPP.  372), HOLDING THAT FORD MOTOR CO.
(FORD) VIOLATED SEC. 7 OF THE CELLAR-KEFAUVER ANTIMERGER ACT /1/  BY
ACQUIRING CERTAIN ASSETS FROM ELECTRIC AUTOLITE CO. (AUTOLITE).  THE
ASSETS INCLUDED THE AUTOLITE TRADE NAME, AUTOLITE'S ONLY SPARK PLUG
PLANT IN THIS COUNTRY (LOCATED AT NEW FOSTORIA, OHIO), A BATTERY PLANT,
AND EXTENSIVE RIGHTS TO ITS NATIONWIDE DISTRIBUTION ORGANIZATION FOR
SPARK PLUGS AND BATTERIES.  THE PRESENT APPEAL /2/  IS LIMITED TO THAT
PORTION OF THE JUDGMENT RELATING TO SPARK PLUGS AND ORDERING FORD TO
DIVEST THE AUTOLITE NAME AND THE SPARK PLUG PLANT.  THE ANCILLARY
INJUNCTIVE PROVISIONS ARE ALSO HERE FOR REVIEW. 

I 

FORD, THE SECOND-LEADING PRODUCER OF AUTOMOBILES, GENERAL MOTORS,
AND CHRYSLER TOGETHER ACCOUNT FOR 90% OF THE AUTOMOBILE PRODUCTION IN
THIS COUNTRY.  THOUGH FORD MAKES A SUBSTANTIAL PORTION OF ITS PARTS,
PRIOR TO ITS ACQUISITION OF THE ASSETS OF AUTOLITE IT DID NOT MAKE
SPARK PLUGS OR BATTERIES BUT PURCHASED THOSE PARTS FROM INDEPENDENT
COMPANIES. 

THE ORIGINAL EQUIPMENT OF NEW CARS, INSOFAR AS SPARK PLUGS ARE
CONCERNED, IS CONVENIENTLY REFERRED TO AS THE OE TIE.  THE REPLACEMENT
MARKET IS REFERRED TO AS THE AFTERMARKET.  THE INDEPENDENTS, INCLUDING
AUTOLITE, FURNISHED THE AUTO MANUFACTURERS WITH OE PLUGS AT COST OR
LESS, ABOUT SIX CENTS A PLUG, AND THEY CONTINUED TO SELL AT THAT PRICE
EVEN WHEN THEIR COSTS INCREASED THREEFOLD.  THE INDEPENDENTS SOUGHT TO
RECOVER THEIR LOSSES ON OE SALES BY PROFITABLE SALES IN THE AFTERMARKET
WHERE THE REQUIREMENT OF EACH VEHICLE DURING ITS LIFETIME IS ABOUT FIVE
REPLACEMENT PLUG SETS.  BY CUSTOM AND PRACTICE AMONG MECHANICS, THE
AFTERMARKET PLUG IS USUALLY THE SAME BRAND AS THE OE PLUG.  SEE
GENERALLY HANSEN & SMITH, THE CHAMPION CASE:  WHAT IS COMPETITION?, 29
HARV.BUS.REV.  89 (1951). 

FORD WAS ANXIOUS TO PARTICIPATE IN THIS AFTERMARKET AND, AFTER
VARIOUS EFFORTS NOT RELEVANT TO THE PRESENT CASE, CONCLUDED THAT ITS
EFFECTIVE PARTICIPATION IN THE AFTERMARKET REQUIRED "AN ESTABLISHED
DISTRIBUTION SYSTEM WITH A RECOGNIZED BRAND NAME, A FULL LINE OF HIGH
VOLUME SERVICE PARTS, ENGINEERING EXPERIENCE IN REPLACEMENT DESIGNS,
LOW VOLUME PRODUCTION FACILITIES AND EXPERIENCE, AND THE OPPORTUNITY TO
CAPITALIZE ON AN ESTABLISHED CAR POPULATION." 

FORD CONCLUDED IT COULD DEVELOP SUCH A DIVISION OF ITS OWN BUT
DECIDED THAT COURSE WOULD TAKE FROM FIVE TO EIGHT YEARS AND BE MORE
COSTLY THAN AN ACQUISITION.  TO MAKE A LONG STORY SHORT, IT ACQUIRED
CERTAIN ASSETS OF AUTOLITE IN 1961. 

GENERAL MOTORS HAD PREVIOUSLY ENTERED THE SPARK PLUG MANUFACTURING
FIELD, MAKING THE AC BRAND.  THE TWO OTHER MAJOR DOMESTIC PRODUCERS
WERE INDEPENDENTS-- AUTOLITE AND CHAMPION.  WHEN FORD ACQUIRED
AUTOLITE, WHOSE SHARE OF THE DOMESTIC SPARK PLUG MARKET WAS ABOUT 15%,
ONLY ONE MAJOR INDEPENDENT WAS LEFT AND THAT WAS CHAMPION, WHOSE SHARE
OF THE DOMESTIC MARKTET DECLINED FROM JUST UNDER 50% IN 1960 TO JUST
UNDER 40% IN 1964 AND TO ABOUT 33% IN 1966.  AT THE TIME OF THE
ACQUISITION, GENERAL MOTORS' MARKET SHARE WAS ABOUT 30%.  THERE WERE
OTHER SMALL MANUFACTURERS OF SPARK PLUGS BUT THEY HAD NO IMPORTANT
SHARE OF THE MARKET.  /3/ 

THE DISTRICT COURT HELD THAT THE ACQUISITION OF AUTOLITE VIOLATED
SEC. 7 OF THE CELLER-KEFAUVER ANTIMERGER ACT BECAUSE ITS EFFECT "MAY BE
SUBSTANTIALLY TO LESSEN COMPETITION."  /4/  IT GAVE TWO REASONS FOR ITS
DECISION. 

FIRST, PRIOR TO 1961 WHEN FORD ACQUIRED AUTOLITE IT HAD A "PERVASIVE
IMPACT ON THE AFTERMARKET," 315 F.SUPP.,AT 375, IN THAT IT WAS A
MODERATING INFLUENCE ON CHAMPION AND ON OTHER COMPANIES DERIVATIVELY. 
IT EXPLAINED THAT REASON AS FOLLOWS: 

"AN INTERESTED FIRM ON THE OUTSIDE HAS A TWOFOLD SIGNIFICANCE.  IT
MAY SOMEDAY GO IN AND SET THE STAGE FOR NOTICEABLE DECONCENTRATION. 
WHILE IT MERELY STAYS NEAR THE EDGE, IT IS A DETERRENT TO CURRENT
COMPETITORS.  UNITED STATES V. PENN-OLIN CHEMICAL CO., 378 U.S. 158 . .
. (1964).  THIS WAS FORD UNIQUELY, AS BOTH A PRIME CANDIDATE TO
MANUFACTURE AND THE MAJOR CUSTOMER OF THE DOMINANT MEMBER OF THE
OLIGOPOLY.  GIVEN THE CHANCE THAT AUTOLITE WOULD HAVE BEEN DOOMED TO
OBLIVION BY DEFENDANT'S GRASS-ROOTS ENTRY, WHICH ALSO WOULD HAVE
DESTROYED FORD'S SOOTHING INFLUENCE OVER REPLACEMENT PRICES, FORD MAY
WELL HAVE BEEN MORE USEFUL AS A POTENTIAL THAN IT WOULD HAVE BEEN AS A
REAL PRODUCER, REGARDLESS HOW IT BEGAN FABRICATION.  HAD FORD TAKEN THE
INTERNAL-EXPANSION ROUTE, THERE WOULD HAVE BEEN NO ILLEGALITY; NOT,
HOWEVER, BECAUSE THE RESULT NECESSARILY WOULD HAVE BEEN COMMENDABLE,
BUT SIMPLY BECAUSE THAT COURSE HAS NOT BEEN PROSCRIBED."  286
F.SUPP.,AT 441.  SEE ALSO FTC V. PROCTER & GAMBLE CO., 386 U.S. 568;
UNITED STATES V. PENN-OLIN CHEMICAL CO., 378 U.S. 158. 

SECOND, THE DISTRICT COURT FOUND THAT THE ACQUISITION MARKED "THE
FORECLOSURE OF FORD AS A PURCHASER OF ABOUT TEN PER CENT OF TOTAL
INDUSTRY OUTPUT."  315 F.SUPP.,AT 375.  THE DISTRICT COURT ADDED: 

     "IN SHORT, FORD'S ENTRY INTO THE SPARK PLUG MARKET BY MEANS OF

  THE ACQUISITION OF THE FACTORY IS FOSTORIA AND THE TRADE NAME

  'AUTOLITE' HAD THE EFFECT OF RAISING THE BARRIERS TO ENTRY INTO

  THAT MARKET AS WELL AS REMOVING ONE OF THE EXISTING RESTRAINTS

UPON THE ACTIONS OF THOSE IN THE BUSINESS OF MANUFACTURING SPARK

  PLUGS. 

     "IT WILL ALSO BE NOTED THAT THE NUMBER OF COMPETITORS IN THE

  SPARK PLUG MANUFACTURING INDUSTRY CLOSELY PARALLELS THE NUMBER OF

  COMPETITORS IN THE AUTOMOBILE MANUFACTURING INDUSTRY AND THE

  BARRIERS TO ENTRY INTO THE AUTO INDUSTRY ARE VIRTUALLY

  INSURMOUNTABLE AT PRESENT AND WILL REMAIN SO FOR THE FORESEEABLE

  FUTURE.  FORD'S ACQUISITION OF THE AUTOLITE ASSETS, PARTICULARLY

 WHEN VIEWED IN THE CONTEXT OF THE ORIGINAL EQUIPMENT (OE) TIE AND

  OF GM'S OWNERSHIP OF AC, HAS THE RESULT OF TRANSMITTING THE

  RIGIDITY OF THE OLIGOPOLISTIC STRUCTURE OF THE AUTOMOBILE

  INDUSTRY TO THE SPARK PLUG INDUSTRY, THUS REDUCING THE CHANCES OF

  FUTURE DECONCENTRATION OF THE SPARK PLUG MARKET BY FORCES AT WORK

  WITHIN THAT MARKET."  IBID.

SEE ALSO FTC V. CONSOLIDATED FOODS CORP., 380 U.S. 592; BROWN SHOE CO.
V. UNITED STATES, 370 U.S. 294; UNITED STATES V. DU PONT & CO., 353
U.S. 586. 

WE SEE NO ANSWER TO THAT CONCLUSION IF THE LETTER AND SPIRIT OF THE
CELLER-KEFAUVER ANTIMERGER ACT /5/  ARE TO BE HONORED.  SEE UNITED
STATES V. PHILADELPHIA NATIONAL BANK, 374 U.S. 321, 362-363; UNITED
STATES V. PENN-OLIN CHEMICAL CO., 378 U.S.,AT 170-171; BROWN SHOE CO.
V. UNITED STATES, 370 U.S.,AT 311-323. 

IT IS ARGUED, HOWEVER, THAT THE ACQUISITION HAD SOME BENEFICIAL
EFFECT IN MAKING AUTOLITE A MORE VIRGOROUS AND EFFECTIVE COMPETITOR
AGAINST CHAMPION AND GENERAL MOTORS THAN AUTOLITE HAD BEEN AS AN
INDEPENDENT.  BUT WHAT WE SAID IN UNITED STATES V. PHILADELPHIA
NATIONAL BANK, SUPRA, DISPOSES OF THAT ARGUMENT.  A MERGER IS NOT SAVED
FROM ILLEGALITY UNDER SEC. 7, WE SAID, 

"BECAUSE, ON SOME ULTIMATE RECKONING OF SOCIAL OR ECONOMIC DEBITS
AND CREDITS, IT MAY BE DEEMED BENEFICIAL.  A VALUE CHOICE OF SUCH
MAGNITUDE IS BEYOND THE ORDINARY LIMITS OF JUDICIAL COMPETENCE, AND IN
ANY EVENT HAS BEEN MADE FOR US ALREADY, BY CONGRESS WHEN IT ENACTED THE
AMENDED SEC. 7.  CONGRESS DETERMINED TO PRESERVE OUR TRADITIONALLY
COMPETITIVE ECONOMY.  IT THEREFORE PROSCRIBED ANTICOMPETITIVE MERGERS,
THE BENIGN AND THE MALIGNANT ALIKE, FULLY AWARE, WE MUST ASSUME, THAT
SOME PRICE MIGHT HAVE TO BE PAID."  374 U.S.,AT 371. 

FORD ARGUES THAT THE ACQUISITION LEFT THE MARKETPLACE WITH A GREATER
NUMBER OF COMPETITORS.  TO BE SURE, AFTER AUTOLITE SOLD ITS NEW
FOSTORIA PLANT TO FORD, IT CONSTRUCTED ANOTHER IN DECATUR, ALABAMA,
WHICH BY 1964 HAD 1.6% OF THE DOMESTIC BUSINESS.  PRIOR TO THE
ACQUISITION, HOWEVER, THERE WERE ONLY TWO MAJOR INDEPENDENT PRODUCERS
AND ONLY TWO SIGNIFICANT PURCHASERS OF ORIGINAL EQUIPMENT SPARK PLUGS. 
THE ACQUISITION THUS AGGRAVATED AN ALREADY OLIGOPOLISTIC MARKET. 

AS WE INDICATED IN BROWN SHOE CO. V. UNITED STATES, 370 U.S.,AT 323
324: 

"THE PRIMARY VICE OF A VERTICAL MERGER OR OTHER ARRANGEMENT TYING A
CUSTOMER TO A SUPPLIER IS THAT, BY FORECLOSING THE COMPETITORS OF
EITHER PARTY FROM A SEGMENT OF THE MARKET OTHERWISE OPEN TO THEM, THE
ARRANGEMENT MAY ACT AS A 'CLOG ON COMPETITION,'  STANDARD OIL CO. OF
CALIFORNIA V. UNITED STATES, 337 U.S. 293, 314, WHICH 'DEPRIVES) . . .
RIVALS OF A FAIR OPPORTUNITY TO COMPETE.'  H.R. REP. NO. 1191, 81ST
CONG., 1ST SESS. 8.  EVERY EXTENDED VERTICAL ARRANGEMENT BY ITS VERY
NATURE, FOR AT LEAST A TIME, DENIES TO COMPETITORS OF THE SUPPLIER THE
OPPORTUNITY TO COMPETE FOR PART OR ALL OF THE TRADE OF THE CUSTOMER
PARTY TO THE VERTICAL ARRANGEMENT."  MOREOVER, FORD MADE THE
ACQUISITION IN ORDER TO OBTAIN A FOOTHOLD IN THE AFTERMARKET.  ONCE
ESTABLISHED, IT WOULD HAVE EVERY INCENTIVE TO PERPETUATE THE OE TIE AND
THUS MAINTAIN THE VIRTUALLY INSURMOUNTABLE BARRIERS TO ENTRY TO THE
AFTERMARKET. 

        II 

THE MAIN CONTROVERSY HERE HAS BEEN OVER THE NATURE AND DEGREE OF THE
RELIEF TO BE AFFORDED. 

DURING THE YEAR FOLLOWING THE DISTRICT COURT'S FINDING OF A SEC. 7
VIOLATION, THE PARTIES WERE UNABLE TO AGREE UPON APPROPRIATE RELIEF. 
THE DISTRICT COURT THEN HELD NINE DAYS OF HEARINGS ON THE REMEDY AND,
AFTER FULL CONSIDERATION, CONCLUDED THAT DIVESTITURE AND OTHER RELIEF
WERE NECESSARY. 

THE OE TIE, IT HELD, WAS IN MANY RESPECTS THE KEY TO THE SOLUTION
SINCE THE PROPENSITY OF THE MECHANIC IN A SERVICE STATION OR
INDEPENDENT GARAGE IS TO SELECT AS A REPLACEMENT THE SPARK PLUG BRAND
THAT THE MANUFACTURE INSTALLED IN THE CAR.  THE OLIGOPOLISTIC STRUCTURE
OF THE SPARK PLUG MANUFACTURING INDUSTRY ENCOURAGES THE CONTINUANCE OF
THAT SYSTEM.  NEITHER GM NOR AUTOLITE SELLS PRIVATE-LABEL PLUGS.  IT IS
OBVIOUSLY IN THE SELF-INTEREST OF OE PLUG MANUFACTURERS TO DISCOURAGE
PRIVATE-BRAND SALES AND TO ENCOURAGE THE OE TIE.  THERE ARE FINDINGS
THAT THE PRIVATE-BRAND SECTOR OF THE SPARK PLUG MARKET WILL GROW
SUBSTANTIALLY IN THE NEXT DECADE BECAUSE MASS MERCHANDISERS ARE
ENTERING THIS MARKET IN FORCE.  THEY NOT ONLY SELL ALL BRANDS OVER THE
COUNTER BUT ALSO HAVE SERVICE BAYS WHERE MANY CARRY ONLY SPARK PLUGS OF
THEIR OWN PROPRIETARY BRAND.  IT IS ANTICIPATED THAT BY 1980 THE TOTAL
PRIVATE BRAND PORTION OF THE SPARK PLUG MARKET MAY THEN REPRESENT 17%
OF THE TOTAL AFTERMARKET.  THE DISTRICT COURT ADDED: 

"TO THE EXTENT THAT THE SPARK (PLUG) MANUFACTURERS ARE NOT OWNED BY
THE AUTO MAKERS, IT SEEMS CLEAR THAT THEY WILL BE MORE FAVORABLY
DISPOSED TOWARD PRIVATE BRAND SALES AND WILL COMPETE MORE VIGOROUSLY
FOR SUCH SALES.  ALSO, THE POTENTIAL ENTRANT CONTINUES TO HAVE THE
CHANCE TO SELL NOT ONLY THE PRIVATE BRAND CUSTOMER BUT THE AUTO MAKER
AS WELL."  315 F.SUPP.,AT 378. 

ACCORDINGLY THE DECREE 

(1) ENJOINED FORD FOR 10 YEARS FROM MANUFACTURING SPARK PLUGS, 

(2) ORDERED FORD FOR FIVE YEARS TO PURCHASE ONE-HALF OF ITS TOTAL
ANNUAL REQUIREMENT OF SPARK PLUGS FROM THE DIVESTED PLANT UNDER THE
"AUTOLITE" NAME, 

(3) PROHIBITED FORD FOR THE SAME PERIOD FROM USING ITS OWN TRADE
NAMES ON PLUGS, 

(4) PROTECTED NEW FOSTORIA, THE TOWN WHERE THE AUTOLITE PLANT IS
LOCATED, BY REQUIRING FORD TO CONTINUE FOR 10 YEARS ITS POLICY OF
SELLING SPARK PLUGS TO ITS DEALERS AT PRICES NO LESS THAN ITS
PREVAILING MINIMUM SUGGESTED JOBBERS' SELLING PRICE, /6/ 

(5) PROTECTED EMPLOYEES OF THE NEW FOSTORIA PLANT BY ORDERING FORD
TO CONDITION ITS DIVESTITURE SALE ON THE PURCHASER'S ASSUMING THE
EXISTING WAGE AND PENSION OBLIGATIONS AND TO OFFER EMPLOYMENT TO ANY
EMPLOYEE DISPLACED BY A TRANSFER OF NONPLUG OPERATIONS FROM THE
DIVESTED PLANT.  /7/ 

THE RELIEF IN AN ANTITRUST CASE MUST BE "EFFECTIVE TO REDRESS THE
VIOLATIONS" AND "TO RESTORE COMPETITION."  /8/  UNITED STATES V. DU
PONT & CO., 366 U.S. 316, 326.  THE DISTRICT COURT IS CLOTHED WITH
"LARGE DISCRETION" TO FIT THE DECREE TO THE SPECIAL NEEDS OF THE
INDIVIDUAL CASE.  INTERNATIONAL SALT CO. V. UNITED STATES, 332 U.S.
392, 401; UNITED STATES V. DU PONT & CO., 353 U.S.,AT 608; UNITED
STATES V. CRESCENT AMUSEMENT CO., 323 U.S. 173, 185. 

COMPLETE DIVESTITURE IS PARTICULARLY APPROPRIATE WHERE ASSET OR
STOCK ACQUISITIONS VIOLATE THE ANTITRUST LAWS.  UNITED STATES V. DU
PONT & CO., SUPRA, AT 328-335; UNITED STATES V. CRESCENT AMUSEMENT CO.,
SUPRA, AT 189; SCHINE CHAIN THEATRES V. UNITED STATES, 334 U.S. 110,
128; UNITED STATES V. EL PASO GAS CO., 376 U.S. 651. 

DIVESTITURE IS A START TOWARD RESTORING THE PRE-ACQUISITION
SITUATION.  FORD ONCE AGAIN WILL THEN STAND AS A LARGE INDUSTRY
CUSTOMER AT THE EDGE OF THE MARKET WITH A RENEWED INTEREST IN SECURING
FAVORABLE TERMS FOR ITS SUBSTANTIAL PLUG PURCHASES.  SINCE FORD WILL
AGAIN BE A PURCHASER, IT IS EXPECTED THAT THE COMPETITIVE PRESSURES
THAT EXISTED AMONG OTHER SPARK PLUG PRODUCERS TO SELL TO FORD WILL BE
RE-CREATED.  THE DIVESTITURE SHOULD ALSO ELIMINATE THE ANTICOMPETITIVE
CONSEQUENCES IN THE AFTERMARKET FLOWING FROM THE SECOND LARGEST
AUTOMOBILE MANUFACTURER'S ENTRY THROUGH ACQUISITION INTO THE SPARK PLUG
MANUFACTURING BUSINESS.     THE DIVESTED PLANT IS GIVEN AN INCENTIVE TO
PROVIDE FORD WITH TERMS WHICH WILL NOT ONLY SATISFY THE 50% REQUIREMENT
PROVIDED FOR FIVE YEARS BY THE DECREE BUT WHICH EVEN AFTER THAT PERIOD
MAY KEEP AT LEAST SOME OF FORD'S ONGOING PURCHASES.  THE DIVESTED PLANT
IS AWARDED AT LEAST A FOOTHOLD IN THE LUCRATIVE AFTERMARKET AND IS
PROVIDED AN INCENTIVE TO COMPETE AGGRESSIVELY FOR THAT MARKET. 

AS A RESULT OF THE ACQUISITION OF AUTOLITE, THE STRUCTURE OF THE
SPARK PLUG INDUSTRY CHANGED DRASTICALLY, AS ALREADY NOTED.  FORD, WHICH
BEFORE THE ACQUISITION WAS THE LARGEST PURCHASER OF SPARK PLUGS FROM
THE INDEPENDENT MANUFACTURERS, BECAME A MAJOR MANUFACTURER.  THE RESULT
WAS TO FORECLOSE TO THE REMAINING INDEPENDENT SPARK PLUG MANUFACTURERS
THE SUBSTANTIAL SEGMENT OF THE MARKET PREVIOUSLY OPEN TO COMPETITIVE
SELLING AND TO REMOVE THE SIGNIFICANT PROCOMPETITIVE EFFECTS IN THE
CONCENTRATED SPARK PLUG MARKET THAT RESULTED FROM FORD'S POSITION ON
THE EDGE OF THE MARKET AS A POTENTIAL ENTRANT. 

TO PERMIT FORD TO RETAIN THE AUTOLITE PLANT AND NAME AND TO CONTINUE
MANUFACTURING SPARK PLUGS WOULD PERPETUATE THE ANTICOMPETITIVE EFFECTS
OF THE ACQUISITION.  /9/ 

THE DISTRICT COURT RIGHTLY CONCLUDED THAT ONLY DIVESTITURE WOULD
CORRECT THE CONDITION CAUSED BY THE UNLAWFUL ACQUISITION. 

A WORD SHOULD BE SAID ABOUT THE OTHER INJUNCTIVE PROVISIONS.  THEY
ARE DESIGNED TO GIVE THE DIVESTED PLANT AN OPPORTUNITY TO ESTABLISH ITS
COMPETITIVE POSITION.  THE DIVESTED COMPANY NEEDS TIME SO IT CAN OBTAIN
A FOOTHOLD IN THE INDUSTRY.  THE RELIEF ORDERED SHOULD "CURE THE ILL
EFFECTS OF THE ILLEGAL CONDUCT, AND ASSURE THE PUBLIC FREEDOM FROM ITS
CONTINUANCE," UNITED STATES V. UNITED STATES GYPSUM CO., 340 U.S. 76,
88, AND IT NECESSARILY MUST "FIT THE EXIGENCIES OF THE PARTICULAR
CASE."  INTERNATIONAL SALT CO. V. UNITED STATES, 332 U.S.,AT 401. 
MOREOVER, "IT IS WELL SETTLED THAT ONCE THE GOVERNMENT HAS SUCCESSFULLY
BORNE THE CONSIDERABLE BURDEN OF ESTABLISHING A VIOLATION OF LAW, ALL
DOUBTS AS TO THE REMEDY ARE TO BE RESOLVED IN ITS FAVOR."  UNITED
STATES V. DU PONT & CO., 366 U.S.,AT 334. 

FORD CONCEDES THAT "(IF NEW FOSTORIA IS TO SURVIVE, IT MUST FOR THE
FORESEEABLE FUTURE BECOME AND REMAIN THE OE SUPPLIER TO FORD AND SECURE
AND RETAIN THE BENEFITS OF SUCH OE STATUS IN SALES OF REPLACEMENT
PLUGS."  THE ANCILLARY MEASURES ORDERED BY THE DISTRICT COURT ARE
DESIGNED TO ALLOW AUTOLITE TO RE-ESTABLISH ITSELF IN THE OE AND
REPLACEMENT MARKETS AND TO MAINTAIN IT AS A VIABLE COMPETITOR UNTIL
SUCH TIME AS FORCES ALREADY AT WORK WITHIN THE MARKETPLACE WEAKEN THE
OE TIE.  THUS FORD IS PROHIBITED FOR 10 YEARS FROM MANUFACTURING ITS
OWN PLUGS.  /10/  BUT IN FIVE YEARS IT CAN BUY ITS PLUGS FROM ANY
SOURCE AND USE ITS NAME ON OE PLUGS. 

BUT PRIOR TO THAT TIME FORD CANNOT USE OR MARKET PLUGS BEARING THE
FORD TRADE NAME.  IN VIEW OF THE IMPORTANCE OF THE OE TIE, IF FORD WERE
PERMITTED TO USE ITS OWN BRAND NAME DURING THE INTIAL FIVE-YEAR PERIOD,
THERE WOULD BE A TENDENCY TO IMPOSE THE OLIGOPOLISTIC STRUCTURE OF THE
AUTOMOTIVE INDUSTRY ON THE REPLACEMENT PARTS MARKET AND THE DIVESTED
ENTERPRISE MIGHT WELL BE UNABLE TO BECOME A STRONG COMPETITOR.  FORD
ARGUES THAT ANY PROHIBITION AGAINST THE USE OF ITS NAME IS PERMISSIBLE
ONLY WHERE THE NAME DECEIVES OR CONFUSES THE PUBLIC.  /11/  BUT THIS IS
NOT AN UNFAIR COMPETITION CASE.  THE TEMPORARY BAN ON THE USE OF THE
FORD NAME IS DESIGNED TO RESTORE THE PRE-ACQUISITION COMPETITIVE
STRUCTURE OF THE MARKET. 

THE REQUIREMENT THAT, FOR FIVE YEARS, FORD PURCHASE AT LEAST HALF OF
ITS SPARK PLUG REQUIREMENTS FROM THE DIVESTED COMPANY UNDER THE
AUTOLITE LABEL IS TO GIVE THE DIVESTED ENTERPRISE AN ASSURED CUSTOMER
WHILE IT STRUGGLES TO BE RE-ESTABLISHED AS AN EFFECTIVE, INDEPENDENT
COMPETITOR. 

IT IS SUGGESTED, HOWEVER, THAT "THE DISTRICT COURT'S ORDERS ASSURED
THAT FORD COULD NOT BEGIN TO HAVE BRAND NAME SUCCESS IN THE REPLACEMENT
MARKET FOR AT LEAST 10 TO 13 YEARS."  POST, AT 591.  THIS CONCLUSION
DISTORTS THE EFFECT OF THE DISTRICT COURT DECREE AND THE NATURE OF THE
SPARK PLUG INDUSTRY.  FORD'S OWN STUDIES INDICATE THAT IT WOULD TAKE
FIVE TO EIGHT YEARS FOR IT TO DEVELOP A SPARK PLUG DIVISION
INTERNALLY.  A MAJOR PORTION OF THIS PERIOD WOULD BE DEVOTED TO THE
DEVELOPMENT OF A VIABLE POSITION IN THE AFTERMARKET.  THE FIVE-YEAR
PROHIBITION ON THE USE OF ITS OWN NAME AND THE 10-YEAR LIMITATION ON
ITS OWN MANUFACTURING MESH NEATLY TO ALLOW FORD TO ESTABLISH ITSELF IN
THE AFTERMARKET PRIOR TO BECOMING A MANUFACTURER WHILE, AT THE SAME
TIME, GIVING AUTOLITE THE OPPORTUNITY TO RE-ESTABLISH ITSELF BY
PROVIDING A MARKET FOR ITS PRODUCTION.  THUS, THE DISTRICT COURT'S
DECREE DELAYS FOR ONLY TWO TO FIVE YEARS THE DATE ON WHICH FORD MAY
BECOME A MANUFACTURER WITH AN ESTABLISHED SHARE OF THE AFTERMARKET. 
GIVEN THE NORMAL FIVE-TO-EIGHT-YEAR LEAD TIME ON ENTRY THROUGH INTERNAL
EXPANSION, THE DISTRICT COURT'S DECREE DOES NOT SIGNIFICANTLY LESSEN
FORD'S MODERATING INFLUENCE AS A POTENTIAL ENTRANT ON THE EDGE OF THE
MARKET.  MOREOVER, IN LIGHT OF THE INTERIM BENEFITS THIS ANCILLARY
RELIEF WILL HAVE ON THE RE-ESTABLISHMENT OF AUTOLITE AS A VIABLE
COMPETITOR AND OF FORD AS A MAJOR PURCHASER, WE CANNOT AGREE WITH THE
CHARACTERIZATION OF THE RELIEF AS "HARSHLY RESTRICTIVE," POST, AT 595,
OR THE ASSERTION THAT THE DECREE, IN ANY PRACTICAL AND SIGNIFICANT
SENSE, "PROHIBITS) FORD FROM ENTERING THE MARKET THROUGH INTERNAL
EXPANSION."  POST, AT 592. 

ANTITRUST RELIEF SHOULD UNFETTER A MARKET FROM ANTI-COMPETITIVE
CONDUCT AND "PRY OPEN TO COMPETITION A MARKET THAT HAS BEEN CLOSED BY
DEFENDANTS' ILLEGAL RESTRAINTS."  INTERNATIONAL SALT CO. V. UNITED
STATES, 332 U.S.,AT 401.  THE TEMPORARY ELIMINATION OF FORD AS A
MANUFACTURER OF SPARK PLUGS LOWERS A MAJOR BARRIER TO ENTRY TO THIS
INDUSTRY.  SEE C. KAYSEN & D. TURNER, ANTITRUST POLICY-- AN ECONOMIC
AND LEGAL ANALYSIS 116 (1959).  FORCES NOW AT WORK IN THE MARKETPLACE
MAY BRING ABOUT A DECONCENTRATED MARKET STRUCTURE AND MAY WEAKEN THE
ONEROUS OE TIE.  THE DISTRICT COURT CONCLUDED THAT THE FORCES OF
COMPETITION MUST BE NURTURED TO CORRECT FOR FORD'S ILLEGAL
ACQUISITION.  WE VIEW ITS DECREE AS A MEANS TO THAT END.  /12/ 

THE THOROUGH AND THOUGHTFUL WAY THE DISTRICT COURT CONSIDERED ALL
ASPECTS OF THIS CASE, INCLUDING THE NATURE OF THE RELIEF, IS
COMMENDABLE.  THE DRAFTING OF SUCH A DECREE INVOLVES PREDICTIONS AND
ASSUMPTIONS CONCERNING FUTURE ECONOMIC AND BUSINESS EVENTS.  BOTH
PUBLIC AND PRIVATE INTERESTS ARE INVOLVED; AND WE CONCLUDE THAT THE
DISTRICT COURT WITH A SINGLE EYE TO THE REQUIREMENTS OF SEC. 7 AND THE
VIOLATION THAT WAS CLEARLY ESTABLISHED MADE A REASONABLE JUDGMENT ON
THE MEANS NEEDED TO RESTORE AND ENCOURAGE THE COMPETITION ADVERSELY
AFFECTED BY THE ACQUISITION. 

              AFFIRMED. 

/1/  SECTION 7 PROVIDES IN PART: 

"NO CORPORATION ENGAGED IN COMMERCE SHALL ACQUIRE, DIRECTLY OR
INDIRECTLY, THE WHOLE OR ANY PART OF THE STOCK OR OTHER SHARE CAPITAL
AND NO CORPORATION SUBJECT TO THE JURISDICTION OF THE FEDERAL TRADE
COMMISSION SHALL ACQUIRE THE WHOLE OR ANY PART OF THE ASSETS OF ANOTHER
CORPORATION ENGAGED ALSO IN COMMERCE, WHERE IN ANY LINE OF COMMERCE IN
ANY SECTION OF THE COUNTRY, THE EFFECT OF SUCH ACQUISITION MAY BE
SUBSTANTIALLY TO LESSEN COMPETITION, OR TO TEND TO CREATE A MONOPOLY." 
38 STAT. 731, AS AMENDED, 64 STAT. 1125, 15 U.S.C. 18. 

/2/  WE NOTED PROBABLE JURISDICTION JUNE 7, 1971.  403 U.S. 903. 

/3/  AUTOLITE DID NOT SELL ALL OF ITS ASSETS TO FORD AND CHANGED THE
NAME OF THE PARTS OF ITS BUSINESS THAT IT RETAINED TO ELTRA CORP. WHICH
IN 1962 BEGAN MANUFACTURING SPARK PLUGS IN DECATUR, ALABAMA, UNDER THE
BRAND NAME PRESTOLITE.  BUT IN 1964 IT HAD ONLY 1.6% OF THE DOMESTIC
BUSINESS.  OTHERS INCLUDED ATLAS, SPONSORED BY STANDARD OIL OF NEW
JERSEY, WITH 1.4% OF THAT BUSINESS, AND RIVERSIDE, SPONSORED BY
MONTGOMERY WARD, WITH 0.6%. AS FURTHER STATED BY THE DISTRICT COURT: 

"MOST OF THE MANUFACTURING FOR THE PRIVATE LABELS AMONG THESE
MARKETERS IS DONE BY ELTRA AND GENERAL BATTERY AND CERAMIC CORPORATION,
THE ONLY PRODUCERS OF ANY STATUTE AT ALL AFTER THE BIG THREE."  286
F.SUPP.  407, 435. 

/4/  THE WORDS WERE SUGGESTED BY THE FEDERAL TRADE COMMISSION WHICH
TOLD THE CONGRESS: 

"UNDER THE SHERMAN ACT, AN ACQUISITION IS UNLAWFUL IF IT CREATES A
MONOPOLY OR CONSTITUTES AN ATTEMPT TO MONOPOLIZE.  IMMINENT MONOPOLY
MAY APPEAR WHEN ONE LARGE CONCERN ACQUIRES ANOTHER, BUT IT IS UNLIKELY
TO BE PERCEIVED IN A SMALL ACQUISITION BY A LARGE ENTERPRISE.  AS A
LARGE CONCERN GROWS THROUGH A SERIES OF SUCH SMALL ACQUISITIONS, ITS
ACCRETIONS OF POWER ARE INDIVIDUALLY SO MINUTE AS TO MAKE IT DIFFICULT
TO USE THE SHERMAN ACT TEST AGAINST THEM.  . . . "  S. REP. NO. 1775,
81ST CONG., 2D SESS., 5. 

THE COMMITTEE DEFINED THE WORDS "MAY BE" AS FOLLOWS: 

"THE CONCEPT OF REASONABLE PROBABILITY CONVEYED BY THESE WORDS IS A
NECESSARY ELEMENT IN ANY STATUTE WHICH SEEKS TO ARREST RESTRAINTS OF
TRADE IN THEIR INCIPIENCY AND BEFORE THEY DEVELOP INTO FULL-FLEDGED
RESTRAINTS VIOLATIVE OF THE SHERMAN ACT.  A REQUIREMENT OF CERTAINTY
AND ACTUALITY OF INJURY TO COMPETITION IS INCOMPATIBLE WITH ANY EFFORT
TO SUPPLEMENT THE SHERMAN ACT BY REACHING INCIPIENT RESTRAINTS."  ID.,
AT 6. 

/5/  CONGRESSMAN CELLER IN TESTIFYING FOR THE CELLER-KEFAUVER BILL
THAT WAS THE 1950 AMENDMENT TO SEC. 7 OF THE CLAYTON ACT SAID: 

"(THE WORTH OF THE INDIVIDUAL IS THE WORTH OF THE NATION; NO MORE
AND NO LESS.  THAT WHICH STRENGTHENS THE INDIVIDUAL BOLSTERS THE
NATION; THAT WHICH DWARFS THE INDIVIDUAL BELITTLES THE NATION." 
HEARING ON H.R. 988 ET SEQ. BEFORE SUBCOMMITTEE NO. 3 OF THE HOUSE
COMMITTEE ON THE JUDICIARY, 81ST CONG., 1ST SESS., SER.  10, PP. 14-15
(1949). 

SENATOR KEFAUVER SPOKE IN THE SAME VEIN: 

"(IF OUR DEMOCRACY IS GOING TO SURVIVE IN THIS COUNTRY WE MUST KEEP
COMPETITION, AND WE MUST SEE TO IT THAT THE BASIC MATERIALS AND
RESOURCES OF THE COUNTRY ARE AVAILABLE TO ANY LITTLE FELLOW WHO WANTS
TO GO INTO BUSINESS. 

"CHARTS AND STATISTICS WILL SHOW THAT EVERY YEAR THERE IS MORE AND
MORE CONCENTRATION, WITH MORE AND MORE CORPORATIONS PURCHASING OUT
THEIR COMPETITORS, SO THAT UNLESS THIS TREND IS HALTED WE ARE GOING TO
COME TO A PLACE WHERE THE BASIC INDUSTRIES AND BUSINESS OF AMERICA ARE
CONTROLLED BY A VERY, VERY SMALL GROUP OF A SMALL NUMBER OF
CORPORATIONS. 

"WE HAVE ALREADY REACHED THAT POINT IN A GREAT MANY OF OUR BASIC
INDUSTRIES.  THE EVIL OF THAT COURSE IS QUITE APPARENT.  WHEN PEOPLE
LOSE THEIR ECONOMIC FREEDOM, THEY LOSE THEIR POLITICAL FREEDOM. 

"WHEN THE DESTINY OF PEOPLE OVER THE LAND IS DEPENDENT UPON THE
DECISION OF TWO OR THREE PEOPLE IN A CENTRAL OFFICE SOMEWHERE, THEN THE
PEOPLE ARE GOING TO DEMAND THAT THE GOVERNMENT DO SOMETHING ABOUT IT. 

"WHEN IT REACHES THAT STAGE, IT IS GOING TO RESULT IN STATISM OF ONE
SORT OR ANOTHER; AND WHICHEVER SORT IT MAY BE, ONE IS EQUALLY AS BAD AS
ANOTHER, AS I SEE IT."  ID., AT 12. 

/6/  THE DISTRICT COURT FOUND THIS PROVISION NECESSARY IN ORDER TO
ASSEMBLE AN ADEQUATE DISTRIBUTION SYSTEM FOR THE AFTERMARKET.  WITHOUT
IT, SERVICE STATIONS AND INDEPENDENT JOBBERS WOULD BE UNABLE TO COMPETE
WITH FRANCHISED CAR DEALERS FOR THE REPLACEMENT BUSINESS.  FORD DOES
NOT CHALLENGE THIS PROVISION IN THIS COURT. 

/7/  FORD DOES NOT CHALLENGE THIS ANCILLARY PORTION OF THE DISTRICT
COURT DECREE PROTECTING THE EMPLOYEES OF THE NEW FOSTORIA PLANT. 

/8/  THE SUGGESTION THAT ANTITRUST "VIOLATORS MAY NOT BE REQUIRED TO
DO MORE THAN RETURN THE MARKET TO THE STATUS QUO ANTE," POST, AT 590,
IS NOT A CORRECT STATEMENT OF THE LAW.  IN UNITED STATES V. PARAMOUNT
PICTURES, INC., 334 U.S. 131, WE SUSTAINED BROAD INJUNCTIONS REGULATING
MOTION PICTURE LICENSES AND CLEARANCES WHICH WERE NOT RELATED TO THE
STATUS QUO ANTE.  REYNOLDS METALS CO. V. FTC, 114 U.S.APP.D.C. 2, 309
F.2D 223 (1962), CONCERNED THE ENFORCEMENT OF THE DISTRICT COURT. 

CLAYTON ACT, 15 U.S.C. 25, EMPOWER "THE ATTORNEY GENERAL, TO INSITUTE
PROCEEDINGS IN EQUITY TO PREVENT AND RESTRAIN . . . VIOLATIONS" OF THE
ANTITRUST LAWS.  THE RELIEF WHICH CAN BE AFFORDED UNDER THESE STATUTES
IS NOT LIMITED TO THE RESTORATION OF THE STATUS QUO ANTE.  THERE IS NO
POWER TO TURN BACK THE CLOCK.  RATHER, THE RELIEF MUST BE DIRECTED TO
THAT WHICH IS "NECESSARY AND APPROPRIATE IN THE PUBLIC INTEREST TO
ELIMINATE THE EFFECTS OF THE ACQUISITION OFFENSIVE TO THE STATUTE,"
UNITED STATES V. DU PONT & CO., 353 U.S. 586, 607, OR WHICH WILL "CURE
THE ILL EFFECTS OF THE ILLEGAL CONDUCT, AND ASSURE THE PUBLIC FREEDOM
FROM ITS CONTINUANCE."  UNITED STATES V. UNITED STATES GYPSUM CO., 340
U.S. 76, 88. 

/9/  "(IT WOULD BE A NOVEL, NOT TO SAY ABSURD, INTERPRETATION OF THE
ANTI-TRUST ACT TO HOLD THAT AFTER AN UNLAWFUL COMBINATION IS FORMED AND
HAS ACQUIRED THE POWER WHICH IT HAS NO RIGHT TO ACQUIRE, NAMELY, TO
RESTRAIN COMMERCE BY SUPPRESSING COMPETITION, AND IS PROCEEDING TO USE
IT AND EXECUTE THE PURPOSE FOR WHICH THE COMBINATION WAS FORMED, IT
MUST BE LEFT IN POSSESSION OF THE POWER THAT IT HAS ACQUIRED, WITH FULL
FREEDOM TO EXERCISE IT."  NORTHERN SECURITIES CO. V. UNITED STATES, 193
U.S. 197, 357. 

/10/  FORD ARGUES THAT THE 10-YEAR PROHIBITION ON ITS MANUFACTURE OF
SPARK PLUGS WILL LESSEN COMPETITION BECAUSE IT WILL REMOVE A POTENTIAL
COMPETITOR FROM THE MARKETPLACE.  THIS PROHIBITION, HOWEVER, IS MERELY
A STEP TOWARD THE RESTORATION OF THE STATUS QUO ANTE, AND IS, MOREOVER,
NECESSARY FOR AUTOLITE TO RE-ESTABLISH ITSELF. 

/11/  FORD ALSO ARGUES THAT THE RIGHT TO ITS OWN TRADE NAME IS A
CONSTITUTIONALLY PROTECTED PROPERTY RIGHT (CF. HOWE SCALE CO. V.
WYCKOFF, SEAMANS & BENEDICT, 198 U.S. 118; BROWN CHEMICAL CO. V. MEYER,
139 U.S. 540; UNITED STATES V. TROPIANO, 418 F.2D 1069, 1076 (CA2
1969), AND THAT THE REMEDIAL PROVISION OF SEC. 15 OF THE CLAYTON ACT
SHOULD NOT BE CONSTRUED TO LIMIT THE USE OF THIS RIGHT.  EVEN ON THAT
ASSUMPTION, WE COULD NOT ACCEPT THE CONCLUSION ADVANCED BY FORD. 
EVEN CONSTITUTIONALLY PROTECTED PROPERTY RIGHTS SUCH AS PATENTS MAY NOT
BE USED AS LEVERS FOR OBTAINING OBJECTIVES PROSCRIBED BY THE ANTITRUST
LAWS.  E.G., BESSER MFG. CO. V. UNITED STATES, 343 U.S. 444, 448-449;
MORTON SALT CO. V. SUPPIGER CO., 314 U.S. 488.  HERE, THE USE BY FORD
OF ITS TRADE NAME WOULD PERPETUATE THE OE TIE AND WOULD HAVE THE
PROHIBITED EFFECT OF HINDERING THE RE-ENTRY OF AUTOLITE TO THE SPARK
PLUG MARKET AS A VIABLE COMPETITOR.     "THE TRADE MARK MAY BECOME A
DETRIMENTAL WEAPON IF IT IS USED TO SERVE A HARMFUL OR INJURIOUS
PURPOSE.  IF IT BECOMES A TOOL TO CIRCUMVENT FREE ENTERPRISE AND
UNBRIDLED COMPETITION, PUBLIC POLICY DICTATES THAT THE RIGHTS ENJOYED
BY ITS OWNERSHIP BE KEPT WITHIN THEIR PROPER BOUNDS.  IF A TRADE MARK
MAY BE THE LEGAL BASIS FOR ALLOCATING WORLD MARKETS, FIXING OF PRICES,
RESTRICTING COMPETITION, THE UNFAILING DEVICE HAS BEEN FOUND TO DESTROY
EVERY VESTIGE OF INHIBITION SET UP BY THE SHERMAN ACT."  UNITED STATES
V. TIMKEN ROLLER BEARING CO., 83 F.SUPP.  284, 316 (ND OHIO 1949),
AFF'D, 341 U.S. 593 (1951). 

/12/  THE DISTRICT COURT DECREE THUS IMPLEMENTS THE CONGRESSIONAL
JUDGMENT IN FAVOR OF ATOMIZED MARKETS REFLECTED IN THE CELLER-KEFAUVER
ANTIMERGER ACT: 

"BUT WE CANNOT FAIL TO RECOGNIZE CONGRESS' DESIRE TO PROMOTE
COMPETITION THROUGH THE PROTECTION OF VIABLE, SMALL, LOCALLY OWNED
BUSINESSES.  CONGRESS APPRECIATED THAT OCCASIONAL HIGHER COSTS AND
PRICES MIGHT RESULT FROM THE MAINTENANCE OF FRAGMENTED INDUSTRIES AND
MARKETS.  IT RESOLVED THESE COMPETING CONSIDERATIONS IN FAVOR OF
DECENTRALIZATION.  WE MUST GIVE EFFECT TO THAT DECISION."  BROWN SHOE
CO. V. UNITED STATES, 370 U.S. 294, 344. 

MR. JUSTICE POWELL AND MR. JUSTICE REHNQUIST TOOK NO PART IN THE
CONSIDERATION OR DECISION OF THIS CASE. 

MR. JUSTICE STEWART, CONCURRING IN THE RESULT. 

THE SPARK PLUG INDUSTRY AS IT STOOD PRIOR TO FORD'S ACQUISITION OF
AUTOLITE WAS HARDLY CHARACTERIZED BY VIGOROUS COMPETITION.  FOR 25
YEARS, THE INDUSTRY HAD CONSISTED OF AC, OWNED BY AND SUPPLYING
ORIGINAL EQUIPMENT (OE) PLUGS TO GENERAL MOTORS; CHAMPION, INDEPENDENT
AND SUPPLYING FORD; AUTOLITE, INDEPENDENT AND SUPPLYING CHRYSLER; AND A
NUMBER OF SMALL PRODUCERS WHO HAD NO OE SALES AND ONLY A MINUSCULE
SHARE OF THE AFTERMARKET.  /1/  THE HABIT AMONG MECHANICS OF INSTALLING
REPLACEMENT PLUGS CARRYING THE SAME BRAND AS THE AUTOMOBILE'S ORIGINAL
PLUGS, REINFORCED BY THE UNWILLINGNESS OF SERVICE STATIONS TO STOCK
MORE THAN TWO OR THREE BRANDS, /2/  MADE POSSIBLE THE "OE TIE," WHICH
RENDERED ANY LARGE-SCALE ENTRY INTO THE AFTERMARKET VIRTUALLY
IMPOSSIBLE WITHOUT FIRST OBTAINING A LARGE OE CUSTOMER.  MOREOVER,
PRICE COMPETITION WAS MINIMAL, BOTH IN THE OE MARKET (WHERE ANY
REDUCTION IN THE SIX-CENT PRICE WOULD IMMEDIATELY BE MATCHED BY
RIVALS), AND IN THE AFTERMARKET (WHERE SPARK PLUGS ACCOUNTED FOR SUCH A
SMALL PERCENTAGE OF THE NORMAL TUNEUP CHARGE THAT PRICE DIFFERENTIALS
DID NOT HAVE A SIGNIFICANT IMPACT UPON CONSUMER CHOICE). 

THE DISTRICT COURT FOUND THAT THE ACQUISITION OF AUTOLITE'S SPARK
PLUG ASSETS BY FORD FURTHER LESSENED COMPETITION IN THE INDUSTRY IN TWO
WAYS:  IT FORECLOSED FORD AS A POTENTIAL PURCHASER OF SPARK PLUGS FROM
INDEPENDENT PRODUCERS, AND IT ELIMINATED WHAT THE DISTRICT COURT FOUND
TO HAVE BEEN FORD'S "MODERATING EFFECT" UPON CHAMPION'S PRICING
POLICIES IN THE AFTERMARKET.  THESE FINDINGS STANDING ALONE MIGHT
PROVIDE A BASIS FOR CONCLUDING THAT THE ACQUISITION VIOLATED SEC. 7,
BUT, AS THE CHIEF JUSTICE DEMONSTRATES IN HIS DISSENTING OPINION, POST,
AT 591-592, THE REMEDY ORDERED WILL NOT RESTORE THE PRE-ACQUISITION
MARKET FORCES UPON WHICH THE DISTRICT COURT FOCUSED.  FOR, UNDER THE
COURT'S INJUNCTIONS, FORD WILL BE NEITHER A POTENTIAL MARKET ENTRANT,
NOR A POTENTIAL PURCHASER OF HALF ITS OE REQUIREMENTS FROM PRODUCERS
OTHER THAN AUTOLITE, FOR A SUBSTANTIAL PERIOD OF TIME AFTER THE
DIVESTITURE TAKES PLACE. 

IN MY JUDGMENT, BOTH THE FINDING OF A SEC. 7 VIOLATION AND THE
REMEDY ORDERED MAY BE BETTER RATIONALIZED IN TERMS OF PROBABLE FUTURE
TRENDS IN THE SPARK PLUG MARKET, VISIBLE AT THE TIME OF THE
ACQUISITION.  THE DISTRICT COURT OBSERVED THAT "A COURT CANNOT SHUT ITS
EYES TO CONTEMPORARY OR PREDICTABLE FACTORS CONDUCIVE TO CHANGE IN THE
COMPETITIVE STRUCTURE."  286 F.SUPP.  407, 442.  THIS WAS A PROPER
INQUIRY BECAUSE WE HAVE HELD THAT SEC. 7 "REQUIRES NOT MERELY AN
APPRAISAL OF THE IMMEDIATE IMPACT OF THE MERGER UPON COMPETITION, BUT A
PREDICTION OF ITS IMPACT UPON COMPETITIVE CONDITIONS IN THE FUTURE." 
UNITED STATES V. PHILADELPHIA NATIONAL BANK, 374 U.S. 321, 362.  /3/ 

THE DISTRICT COURT FOUND THAT THE GROWTH OF SERVICE-CENTERS OPERATED
BY MASS MERCHANDISERS CARRYING PRIVATE LABEL BRANDS MIGHT EVENTUALLY
LOOSEN THE OE TIE AND THE TIGHT OLIGOPOLY IN THE SPARK PLUG MARKET THAT
IT HAD FOSTERED.  HAD FORD ENTERED THE MARKET THROUGH INTERNAL
EXPANSION, EITHER CHAMPION OR AUTOLITE WOULD HAVE BEEN LEFT WITHOUT AN
OE ENTRY, BUT WOULD NEVERTHELESS HAVE OWNED AN ESTABLISHED BRAND NAME
WITH AN EXISTING DISTRIBUTION SYSTEM, TOGETHER WITH A LARGE PRODUCTION
CAPACITY.  EVEN THE THREAT OF BEING SO STRANDED, NOT TO MENTION ITS
REALIZATION, WOULD HAVE GIVEN BOTH CHAMPION AND AUTOLITE AN INCENTIVE
TO COMPETE AS SUPPLIERS TO PRIVATE LABEL SELLERS, AS THESE SELLERS
BEGAN TO REPRESENT A SIGNIFICANT SHARE OF THE MARKET, AND TO UNDERMINE
THE OE TIE.  FORD'S ACQUISITION OF AUTOLITE DID MORE THAN FORECLOSE IT
AS A POTENTIAL OE CUSTOMER, OR ELIMINATE ITS "MODERATING EFFECT" UPON
CHAMPION'S PRICING POLICIES:  IT ELIMINATED ONE OF THE ONLY TWO
INDEPENDENT PRODUCERS WITH A SUFFICIENT SHARE OF THE AFTERMARKET TO
GIVE IT A CHANCE TO COMPETE EFFECTIVELY WITHOUT AN OE TIE.  THUS, THE
ACQUISITION HAD THE PROBABLE EFFECT OF INDEFINITELY POSTPONING THE DAY
WHEN EXISTING MARKET FORCES COULD PRODUCE A MEASURABLE DECONCENTRATION
IN THE MARKET. 

WHILE THE DISTRICT COURT DID NOT JUSTIFY THE DIVESTITURE IN PRECISELY
THESE TERMS, I THINK ITS PREDICTION OF FUTURE TRENDS IN THE SPARK PLUG
INDUSTRY IS AN ADEQUATE BASIS TO SUPPORT THE REMEDY ORDERED.  THE CHIEF
JUSTICE'S OPINION, POST, AT 591-592, IS CORRECT IN ITS ASSERTION THAT
THE ANCILLARY INJUNCTIONS ARE ANTICOMPETITIVE IN THE SHORT RUN, AND
THAT THE DISTRICT COURT TOOK EXTRAORDINARY MEASURES TO MOTHER THE
DIVESTED PRODUCER FOR THE NEXT DECADE.  BUT I CANNOT SAY THAT THESE
INJUNCTIONS ARE NOT REASONABLY CALCULATED TO ESTABLISH THE NEW AUTOLITE
PRODUCER AS A VIABLE FIRM AND THUS TO RESTORE THE PRE-ACQUISITION
MARKET STRUCTURE, INSOFAR AS IT IS NOW POSSIBLE TO DO SO.  A
DIVESTITURE DECREE WITHOUT ANCILLARY INJUNCTIONS WOULD NOT
AUTOMATICALLY RESTORE THE STATUS QUO ANTE, AS THE CHIEF JUSTICE'S
OPINION SEEMS TO ASSUME.  THE ELECTRIC AUTOLITE COMPANY, FROM WHICH
FORD ACQUIRED THE ASSETS IN QUESTION HERE, WILL NOT BE RECREATED BY THE
DIVESTITURE, AND IT IS REASONABLE TO ASSUME THAT A NEW OWNER OF THE
AUTOLITE TRADE NAME AND THE NEW FOSTORIA PLANT WILL REQUIRE A PERIOD OF
TIME TO BECOME AS EFFECTIVE A COMPETITOR AS WAS ELECTRIC AUTOLITE PRIOR
TO THE ACQUISITION. 

THOUGH THE ECONOMICS OF THE MARKET ARE SUCH THAT THE DIVESTITURE
CANNOT BE ASSURED OF SUCCESS, IT DOES AT LEAST HAVE A CHANCE OF
BRINGING INCREASED COMPETITION TO THE SPARK PLUG INDUSTRY.  AND WHILE
DIVESTITURE REMEDIES IN SEC. 7 CASES HAVE NOT ENJOYED SPECTACULAR
SUCCESS IN THE PAST, REMEDIES SHORT OF DIVISTITURE HAVE BEEN UNIFORMLY
UNSUCCESSFUL IN MEETING THE GOALS OF THE ACT.  SEE ELZINGA, THE
ANTIMERGER LAW:  PYRRHIC VICTORIES, 12 J.LAW & ECON.  43 (1969). 

/1/  BOTH CHAMPION AND AUTOLITE SUPPLIED OE PLUGS TO AMERICAN
MOTORS, WHICH IN 1961 HAD ROUGHLY 5% OF THE DOMESTIC AUTOMOBILE
MARKET. 

/2/  ACCORDING TO A 1966 SURVEY, ONLY 11% OF ALL METROPOLITAN AREA
SERVICE STATIONS STOCKED ANY BRAND OF SPARK PLUG OTHER THAN CHAMPION,
AC, OR AUTOLITE, AND ONLY 30% STOCKED ALL THREE OF THE LEADING BRANDS. 

/3/  FORD ARGUES THAT THE ACQUISITION ALLOWED AUTOLITE TO COMPETE
MORE EFFECTIVELY AGAINST THE TWO LARGER BRANDS, CHAMPION AND AC.  SINCE
THIS ARGUMENT IS ADDRESSED TO THE EFFECT OF THE ACQUISITION UPON
COMPETITION, THE COURT OBVIOUSLY PROVIDES NO ANSWER TO THE ARGUMENT
WHEN IT QUOTES PHILADELPHIA NATIONAL BANK FOR THE PROPOSITION THAT
ARGUMENTS UNRELATED TO THE MERGER'S EFFECT UPON COMPETITION ARE
IRRELEVANT IN A SEC. 7 CASE.  BUT FORD'S ARGUMENTS THAT AUTOLITE WAS A
MORE EFFECTIVE COMPETITOR AFTER THE ACQUISITION RESTS PRINCIPALLY ON
THE FACT THAT AUTOLITE'S MARKET SHARE INCREASED AFTER 1961 WHILE
CHAMPION'S DECREASED.  THIS DEVELOPMENT, HOWEVER, CAN BE ATTRIBUTED FOR
THE MOST PART TO THE FACT THAT AUTOLITE NOW PROVIDES OE PLUGS TO FORD,
RATHER THAN TO THE SMALLER CHRYSLER.  AUTOLITE'S INCREASED MARKET
SHARE, THEREFORE, IS MORE LIKELY ATTRIBUTABLE TO THE OE TIE THAN TO ANY
INCREASE IN ITS COMPETITIVE VIGOR. 

MR. CHIEF JUSTICE BURGER, CONCURRING IN PART AND DISSENTING IN
PART. 

IN ADDITION TO REQUIRING DIVESTITURE OF AUTOLITE, THE DISTRICT COURT
MADE ANCILLARY INJUNCTIVE PROVISIONS THAT GO FAR BEYOND ANY THAT HAVE
BEEN CITED TO THE COURT.  FORD IS FORBIDDEN TO MANUFACTURE SPARK PLUGS
FOR 10 YEARS; FORD IS ORDERED TO PURCHASE ONE-HALF OF ITS TOTAL ANNUAL
REQUIREMENT OF SPARK PLUGS FROM THE DIVESTED COMPANY UNDER THE
"AUTOLITE" NAME, AND FORD IS FORBIDDEN FOR THE SAME PERIOD TO USE ITS
OWN TRADE NAME ON ANY SPARK PLUGS.  THESE PROVISIONS ARE DIRECTED TO
PREVENT FORD FROM MAKING AN INDEPENDENT ENTRY INTO THE SPARK PLUG
MARKET AND, IN EFFECT, TO REQUIRE IT TO SUBSIDIZE AUTOLITE FOR A PERIOD
OF TIME.  DESPITE THE DRACONIAN QUALITY OF THIS RESTRICTION ON FORD, I
CAN FIND NO JUSTIFICATION IN THE DISTRICT COURT'S FINDINGS FOR THIS
REMEDY.  I DISSENT FROM THE BROAD SWEEP OF THE DISTRICT COURT'S
REMEDIAL DECREE.  I WOULD REMAND FOR FURTHER CONSIDERATION OF THE
REMEDIAL ASPECTS OF THIS CASE. 

AN UNDERSTANDING OF THE DISTRICT COURT'S FINDINGS AS TO THE SPARK
PLUG MARKET SHOWS THREE REASONS WHY IT WAS IN ERROR IN REQUIRING FORD
TO SUPPORT AUTOLITE.  FIRST, THE COURT DID NOT FIND THAT THE WEAKNESS
OF AN INDEPENDENT AUTOLITE'S COMPETITIVE POSITION RESULTED FROM FORD'S
ACQUISITION.  RATHER, A READING OF ITS FINDINGS MAKES APPARENT THAT THE
PRECARIOUSNESS OF AUTOLITE'S EXPECTED POST-DIVESTMENT POSITION RESULTS
FROM PRE-EXISTING FORCES IN THE MARKET.  THEREFORE, THE DRASTIC
MEASURES EMPLOYED TO STRENGTHEN AUTOLITE'S POSITION AT FORD'S EXPENSE
CANNOT BE JUSTIFIED AS A REMEDY FOR ANY WRONG DONE BY FORD.  SECOND,
THE REMEDY WILL PERPETUATE FOR A TIME THE VERY EVILS UPON WHICH THE
DISTRICT COURT BASED A FINDING OF AN ANTITRUST VIOLATION.  THIRD, THE
COURT'S OWN FINDINGS INDICATE THAT THE REMEDY IS NOT LIKELY TO SECURE
AUTOLITE'S COMPETITIVE POSITION BEYOND THE TERMINATION OF THE
RESTRICTIONS.  THEREFORE, THERE IS NO ASSURANCE THAT THE JUDICIAL
REMEDY WILL HAVE THE DESIRED IMPACT ON LONG-RUN COMPETITION IN THE
SPARK PLUG MARKET. 

THE COURT MAKES TWO CRITICAL ERRORS IN ORDER TO AVOID THE EFFECT OF
THIS REASONING.  IT REJECTS THE FACTFINDING BY THE DISTRICT COURT IN
ORDER TO UPHOLD ITS REMEDIAL ORDER; AND IT REPEATS THAT COURT'S ERROR
BY DISCUSSING THE ASSISTANCE NECESSARY TO RESTORE AUTOLITE TO THE
STATUS QUO ANTE WITHOUT EVER DELINEATING THAT PRIOR STATE OF AFFAIRS OR
INDICATING HOW FORD, BY ACQUIRING AUTOLITE AND HOLDING IT FOR A NUMBER
OF YEARS, HAD UNDERMINED ITS ABILITY TO REASSUME ITS FORMER INDEPENDENT
COMPETITIVE POSITION. 

THE DISTRICT COURT MADE EXTENSIVE FINDINGS ON THE NATURE OF THE
SPARK PLUG MARKET.  SOME OF THESE FINDINGS APPEAR IN THE COURT'S
OPINION, BUT SOME FACTORS THAT SEEM CRUCIAL TO ME ARE EITHER OMITTED OR
NOT ADEQUATELY SET FORTH.  THEREFORE I WILL SKETCH THESE FINDINGS AT
SOME RISK OF REPETITION. 

BEYOND DOUBT, THE SPARK PLUG MARKET HAS BEEN OVERWHELMINGLY
DOMINATED BY THREE MANUFACTURERS FOR A LONG PERIOD:  AC, OWNED BY
GENERAL MOTORS, WHICH HAD ABOUT 30% OF THE MARKET IN 1961; CHAMPION,
WHICH HAD SUPPLIED FORD SINCE 1910 AND HAD APPROXIMATELY 50% OF THE
MARKET IN 1961; AND AUTOLITE, WHICH HAD SUPPLIED CHRYSLER SINCE 1941
AND HAD 15% OF THE MARKET IN 1961.  TOGETHER THESE THREE COMPANIES HAD
OVER 95% OF THE TOTAL MARKET IN 1961. 

THE REASON FOR THE CONTINUED DOMINATION OF THE MARKET BY THE THREE
BIG PLUG MANUFACTURERS IS THE PERVASIVE FEATURE OF THE PLUG MARKET
KNOWN AS THE "OE ORIGINAL EQUIPMENT) TIE."  THIS DENOMINATES THE
PHENOMENON THAT MECHANICS WHO REPLACE SPARK PLUGS IN A CAR ENGINE HAVE
TENDED, ALMOST EXCLUSIVELY, TO USE THE BRAND OF PLUG INSTALLED BY THE
AUTO BUILDER AS ORIGINAL EQUIPMENT.  THOUGH NOT REQUIRED BY SPARK PLUG
TECHNOLOGY, MECHANICS HAVE FOLLOWED THIS PRACTICE BECAUSE OF A STRONG
DESIRE TO AVOID ANY CHANCE OF INJURING AN ENGINE BY PUTTING A
MISMATCHED PLUG INTO IT.  FURTHER, BECAUSE PLUGS ARE LOW-PROFIT ITEMS,
THOSE WHO INSTALL THEM TEND TO CARRY AN INVENTORY OF A SMALL NUMBER OF
BRANDS.  MOST CARRY ONLY TWO AND SOME CARRY THREE BRANDS, AND THEY
CHOOSE THE BRANDS INSTALLED BY THE BIG AUTO MANUFACTURERS AS ORIGINAL
EQUIPMENT.  THUS, IT TAKES A POSITION AS SUPPLIER TO A LARGE AUTO MAKER
TO GAIN RECOGNITION IN THE SPARK PLUG REPLACEMENT MARKET.  THE
GOVERNMENT CONCEDED IN THE DISTRICT COURT, FOR INSTANCE, THAT AMERICAN
MOTORS, WITH 5% OF THE AUTO MARKET, WOULD NOT BE ABLE TO CREATE MARKET
ACCEPTANCE FOR AN INDEPENDENT BRAND OF PLUG BY INSTALLING IT AS
ORIGINAL EQUIPMENT IN ITS CARS. 

BECAUSE OF THE COMPETITIVE IMPORTANCE OF HAVING THEIR PLUGS
INSTALLED AS ORIGINAL EQUIPMENT BY ONE OF THE THREE AUTO COMPANIES,
PLUG MANUFACTURERS HAVE OVER A LONG PERIOD BEEN WILLING TO SELL OE
PLUGS FOR INITAL INSTALLATION BY AUTO MANUFACTURERS AT A PRICE BELOW
THEIR PRODUCTION COST.  THE LONGSTANDING PRICE FOR OE PLUGS, ABOUT 6
CENTS, IS NOW APPROXIMATELY ONE-THIRD OF THE COST OF PRODUCING THESE
PLUGS.  SUCH BELOW-COST SELLING IS PROFITABLE FOR THE PLUG COMPANIES
BECAUSE OF THE FOOTHOLD IT GIVES THEM IN COMPETING FOR THE NORMAL FIVE
OR SIX SETS OF REPLACEMENT PLUGS NECESSARY IN THE LIFESPAN OF AN
AUTOMOBILE.  THIS PRICING POLICY HAS BEEN PARTIALLY RESPONSIBLE FOR THE
SEMIPERMANENT RELATIONS BETWEEN THE PLUG MANUFACTURERS AND THE AUTO
MANUFACTURERS:  IT IS ONLY THOSE PLUG COMPANIES THAT PROFIT FROM THE OE
TIE OVER THE LONG RUN THAT CAN AFFORD THIS BELOW-COST SALE TO THE AUTO
COMPANIES.     THE STRENGTH OF THE OE TIE IS DEMONSTRATED BY THE
INABILITY OF WELL-KNOWN AUTO SUPPLY MANUFACTURERS TO GAIN A SIGNIFICANT
SHARE OF THE SPARK PLUG MARKET IN THE ABSENCE OF AN OE TIE.  AS THE
DISTRICT COURT FOUND, NO COMPANY WITHOUT THE OE TIE 

"EVER SURPASSED THE 2% LEVEL.  SEVERAL HAVE COME AND GONE. 
FIRESTONE TIRE AND RUBBER COMPANY MERCHANDISED 'FIRESTONE'
REPLACEMENTS FOR 35 YEARS BEFORE IT GAVE UP IN 1964.  ALTHOUGH IT OWNED
SOME 800 ACCESSORY STORES AND SUCCESSFULLY WHOLESALED OTHER ITEMS TO
MORE THAN 50,000 SHOPS AND FILLING STATIONS, IT COULD NOT SURMOUNT THE
PATENT DISCRIMINATION AGAINST BRANDS NOT BLESSED WITH DETROIT'S
APPROBATION.  GOODYEAR TIRE AND RUBBER COMPANY QUIT IN ONLY THREE
YEARS.  GLOBE UNION, A FABRICATOR WHICH HAD BARELY 1% OF THE NATION'S
SHIPMENTS, WITHDREW IN 1960."  286 F.SUPP.  407, 434-435.  TWO SMALL
MANUFACTURERS SURVIVE, PRODUCING PLUGS FOR PRIVATE-LABEL BRANDS.  THUS
"ATLAS" PLUGS, SPONSORED BY THE STANDARD OIL COMPANIES, HAS 1.4% OF THE
REPLACEMENT MARKET; "PRESTOLITE" AND SEARS, ROEBUCK'S "ALLSTATE" EACH
HAVE 1.2%; AND MONTGOMERY WARD'S "RIVERSIDE" LABEL HAS 0.6% OF THE
REPLACEMENT MARKET. 

AN INDENDENT ENTRY INTO THE PLUG MARKET BY FORD, WITH THE EXPECTED
SUBSTITUTION OF ITS OWN PLUGS AS ORIGINAL EQUIPMENT IN ITS CARS, WOULD
HAVE NECESSARILY DEPRIVED ONE OF THE TWO SIGNIFICANT INDEPENDENT PLUG
PRODUCERS OF ITS OE STATUS.  THE DISTRICT COURT FOUND THAT, BECAUSE OF
THE IMPORTANCE OF THE OE TIE, THE PLUG PRODUCER DEPRIVED OF THIS
SUPPORT WOULD MOST LIKELY HAVE LOST ANY SIGNIFICANT POSITION IN THE
MARKET.  /1/  AUTOLITE, WITH ONLY 15% OF THE MARKET BEFORE THE
ACQUISITION, WOULD CERTAINLY HAVE LOST ANY SIGNIFICANT POSITION IN THE
MARKET IF AN INDEPENDENT ENTRY BY FORD HAD LED CHRYSLER TO SHIFT ITS
PATRONAGE FROM AUTOLITE TO CHAMPION.  THE DISTRICT COURT ASSERTED THAT
A CHAMPION WITHOUT OE STATUS WOULD HAVE HAD SOME CHANCE OF MAINTAINING
A SIGNIFICANT MARKET POSITION BECAUSE OF ITS SIZE, ALTHOUGH IT GAVE NO
REASON FOR THINKING CHAMPION'S SIZE IMMUNIZED IT FROM DEPENDENCE ON OE
STATUS.  BEFORE 1961, CHAMPION HAD JUST UNDER 50% OF THE MARKET.  AS A
RESULT OF CHAMPION'S MOVE TO CHRYSLER IN 1961, ITS POSITION IN THE
MARKET DROPPED TO 33% BY 1966.  THE DISTRICT COURT FOUND NO BASIS FOR
PREDICTING WHICH OF THE TWO BIG INDEPENDENTS WOULD HAVE WON SUCH A
COMPETITION FOR CONTINUED OE STATUS. 

THUS, AN INDEPENDENT ENTRY BY FORD WOULD NOT LIKELY HAVE INCREASED
THE NUMBER OF SIGNIFICANT COMPETITORS IN THE SPARK PLUG MARKET. 
RATHER, IT WOULD SIMPLY HAVE SUBSTITUTED FORD FOR ONE OF THE TWO
SIGNIFICANT INDEPENDENT MANUFACTURERS.  THE RESULT OF THIS EXPECTATION
IS THAT THE DISTRICT COURT DID NOT BASE ITS FINDING OF ILLEGALITY ON
THE GROUND TYPICALLY PRESENT WHEN A POTENTIAL ENTRANT ENTERS AN
OLIGOPOLISTIC MARKET BY ACQUISITION RATHER THAN INTERNAL EXPANSION,
I.E., THAT SUCH A MOVE HAS DEPRIVED THE MARKET OF THE PRO-COMPETITIVE
EFFECT OF AN INCREASE IN THE NUMBER OF COMPETITORS.  HERE AN
INDEPENDENT ENTRY WOULD NOT HAVE INCREASED THE NUMBER OF COMPETITORS
BUT SIMPLY WOULD HAVE EXCHANGED ONE COMPETITOR FOR ANOTHER.  IN NOTING
THIS PARADOXICAL FACT, THE DISTRICT COURT CONCLUDED THAT "FORD MAY WELL
HAVE BEEN MORE USEFUL AS A POTENTIAL THAN IT WOULD HAVE BEEN AS A REAL
PRODUCER, REGARDLESS HOW IT BEGAN FABRICATION."  /2/  286 F.SUPP.,AT
441. 

NOT FINDING THAT FORD'S ENTRY BY ACQUISITION HAD DEPRIVED THE SPARK
PLUG MARKET OF ANY PRO-COMPETITIVE EFFECT OF AN INDEPENDENT ENTRY, THE
DISTRICT COURT RELIED ON TWO OTHER GROUNDS FOR FINDING A VIOLATION OF
THE ANTITRUST LAWS.  FIRST, IT CONCLUDED THAT AS A POTENTIAL ENTRANT ON
THE EDGE OF THE MARKET WHICH WAS ALSO A MAJOR PURCHASER IN THE MARKET,
FORD EXERCISED A "MODERATING" INFLUENCE ON THE MARKET; THE SECOND BASIS
FOR DETERMINING THE ACQUISITION ILLEGAL WAS THE FINDING THAT THE
ACQUISITION "FORECLOSED" OTHER COMPANIES FROM COMPETING FOR THE
BUSINESS OF SUPPLYING FORD WITH SPARK PLUGS. 

WITH RESPECT TO AUTOLITE ITSELF, THE DISTRICT COURT MADE SEVERAL
RELEVANT FINDINGS.  FIRST, IT FOUND THAT AUTOLITE IS A FIXED-PRODUCTION
PLANT.  IN OTHER WORDS, IT CAN BE PROFITABLE ONLY TURNING OUT
APPROXIMATELY THE NUMBER OF PLUGS IT NOW MANUFACTURES.  IT COULD NOT,
FOR INSTANCE, REDUCE ITS PRODUCTION BY HALF AND SELL THAT AT A PROFIT. 
SECOND, IT MADE EXTENSIVE FINDINGS WITH RESPECT TO AUTOLITE'S
DISTRIBUTION SYSTEM: 

"FORD RECEIVED SIX REGIONAL OFFICES, PERSONNEL AND A LIST OF
ELECTRIC AUTOLITE'S WAREHOUSERS AND JOBBERS.  ALL OF THESE HAVE BEEN
AND STILL ARE AT LIBERTY TO DEAL WITH ANYONE THEY WISH.  EACH OLD
DIRECT ACCOUNT HAD TO BE VISITED INDIVIDUALLY AND, IF IT CONSENTED, BE
RE-SIGNED BY DEFENDANT (FORD).  WITHIN A FEW MONTHS, 52 DID ENTER INTO
NEW IGNITION CONTRACTS.  HOWEVER, 50 OF THESE FOR THE PREVIOUS YEAR HAD
ALSO BEEN . . . (DISTRIBUTORS OF OTHER FORD PRODUCTS).  BY MID-1966,
DIRECT ACCOUNTS TOTALED 156, OF WHICH 104 IN 1960 HAD BEEN PLEDGED TO
NEITHER FORD NOR AUTOLITE.  THE SAME BLOC OF 50 HAD BEEN COMMITTED TO
BOTH.  THE NET INCREASE TRACEABLE WITH ANY SEMBLANCE OF ACCURACY TO THE
ACQUISITION IS TWO FIRST-LAYER MIDDLEMEN . . . . "  286 F.SUPP.,AT
422.  AS TO DIFFICULTIES THAT A DIVESTED AUTOLITE MIGHT HAVE IN
ESTABLISHING AN INDEPENDENT DISTRIBUTION SYSTEM, THE DISTRICT COURT
MENTIONED ONLY ONE:  /3/  IF FORD WERE TO OFFER ITS OWN PLUGS TO ITS
CAR DEALERS AT A FAIRLY LOW PRICE, ONE WHICH INDEPENDENT JOBBERS COULD
NOT MEET, AUTOLITE WOULD HAVE DIFFICULTY INDEPENDENTLY ESTABLISHING ITS
DISTRIBUTION SYSTEM.  THE JOBBERS WOULD BE LESS INTERESTED IN HANDLING
AUTOLITE'S LINE SINCE THE FORD DEALERS WOULD NOT WANT AUTOLITE AT THE
JOBBERS' PRICE AND, WITH THIS DEMAND CUT OUT, THE JOBBERS WOULD BE LESS
INTERESTED IN PUSHING AUTOLITE GENERALLY. 

THERE IS ANOTHER SET OF RELEVANT FACTS FOUND BY THE DISTRICT COURT. 
THE DISTRICT JUDGE FOUND THAT "THERE IS A RISING WIND OF NEW FORCES IN
THE SPARK PLUG MARKET WHICH MAY PROFOUNDLY CHANGE IT."  315 F.SUPP. 
372, 377.  ON THE BASIS OF THE TESTIMONY OF AN EXECUTIVE OF ONE OF THE
PRODUCERS OF PLUGS FOR PRIVATE LABELS, THE COURT FOUND THAT THE PRIVATE
BRAND SECTOR WOULD GROW DURING THE NEXT 10 YEARS.  THIS HIGHLY
SPECULATIVE OBSERVATION OF THE DISTRICT COURT WAS BASED ON A FINDING
THAT THE MASS MERCHANDISERS ARE BEGINNING TO ENTER THE PLUG MARKETING
FIELD IN FORCE.  NOT ONLY DO THE MASS MERCHANDISERS MARKET PRIVATE
BRAND PLUGS OVER THE COUNTER, BUT THEY ARE ALSO BUILDING SERVICE BAYS. 
AND IN THESE BAYS MANY CARRY ONLY THEIR OWN PROPRIETARY BRAND OF SPARK
PLUGS.  THIS WITNESS PREDICTED THAT THE MASS MERCHANDISERS WOULD
INCREASE THEIR SHARE OF THE AFTERMARKET FROM 4.4% TO 10% BY 1980.  HE
FURTHER PREDICTED THAT OIL COMPANIES WOULD ENTER THE REPLACEMENT
MARKET, RESULTING IN A TOTAL OF 17% OF THE REPLACEMENT MARKET BEING
SUPPLIED BY PRIVATE-LABEL PLUGS BY 1980.  THE COURT CONCLUDED THAT
THESE FORCES "MAY WELL LEAD TO (THE MARKET'S) EVENTUAL DECONCENTRATION
BY INCREASING THE NUMBER OF POTENTIAL CUSTOMERS FOR A NEW ENTRANT INTO
THE PLUG MANUFACTURING BUSINESS AND REDUCING THE NEED FOR ORIGINAL
EQUIPMENT IDENTIFICATION."  315 F.SUPP.,AT 378. 

IN ITS SEPARATE OPINION ON REMEDIES, THE DISTRICT COURT CORRECTLY
STATED THE RELEVANT LAW; THE PURPOSE, AND LIMIT OF ANTITRUST REMEDIES,
IS TO 

"FREE THESE FORCES (WITHIN THE MARKET) FROM THE UNLAWFUL RESTRAINT
IMPOSED UPON THEM SO THAT THEY MAY RUN THEIR NATURAL COURSE."  315
F.SUPP.,AT 377.  THE VIOLATORS MAY NOT BE REQUIRED TO DO MORE THAN
RETURN THE MARKET TO THE STATUS QUO ANTE.  SEE UNITED STATES V.
PARAMOUNT PICTURES, INC., 334 U.S. 131, 152-153 (1948); REYNOLDS METALS
CO. V. FTC, 114 U.S.APP.D.C. 2, 309 F.2D 223 (1962) (BURGER, J.). 
APPLYING THIS GENERAL PROVISION TO THE INSTANT SITUATION, THE DISTRICT
COURT CORRECTLY STATED: 

     "THE COURT WISHES TO NOTE HERE THAT ALTHOUGH IT FINDS THAT

DIVESTITURE IS THE ONLY EFFECTIVE REMEDY, IT DOES NOT AGREE WITH

  THE GOVERNMENT THAT THE REMEDY SHOULD BE AFFIRMATIVELY DESIGNED

  TO 'BREAK THE OE TIE.'  THE REMEDY IS DESIGNED TO CORRECT THE

  VIOLATIONS OF SECTION 7 FOUND BY THE COURT.  THE OE TIE, AS SUCH,

  DOES NOT VIOLATE SECTION 7."  315 F.SUPP.,AT 378. 

THE DISTRICT COURT THEN CONCLUDED THAT, IN ADDITION TO DIVESTITURE OF
THE AUTOLITE PLANT AND TRADE NAME, CERTAIN INJUNCTIVE PROVISIONS WERE
REQUIRED "TO GIVE (AUTOLITE) AN OPPORTUNITY TO ESTABLISH ITS
COMPETITIVE POSITION."  IBID.  IT THEREFORE ORDERED THAT FORD BE
PROHIBITED FROM MANUFACTURING SPARK PLUGS FOR A PERIOD OF 10 YEARS.  IT
FURTHER ORDERED THAT FOR A PERIOD OF FIVE YEARS FORD WOULD BE REQUIRED
TO PURCHASE ONE-HALF OF ITS TOTAL ANNUAL NEEDS OF SPARK PLUGS FROM
AUTOLITE, BEARING THE AUTOLITE LABEL.  FOR THIS FIVE-YEAR PERIOD FORD
WAS ALSO ORDERED NOT TO USE OR MARKET A SPARK PLUG UNDER A TRADE NAME
OWNED BY OR LICENSED TO IT.  THE EFFECT OF THESE ORDERS WAS TWOFOLD. 
THEY ASSURED AUTOLITE OF A PURCHASER FOR A LARGE PART OF ITS PRODUCTION
FOR FIVE YEARS.  AND THEY PREVENTED FORD FROM IMMEDIATELY ENTERING THE
COMPETITION FOR A SHARE OF THE AFTERMARKET WITH A PLUG UNDER ITS OWN
NAME; IT COULD NOT EVEN LABEL A PLUG UNDER ITS OWN NAME FOR FIVE YEARS
AND COULD NOT MANUFACTURE ITS OWN PLUG FOR 10 YEARS.  GIVEN THE
FINDINGS OF THE COURT THAT EVEN WITH THE STATUS OF SUPPLIER OF ORIGINAL
EQUIPMENT (WITH THE COMPANY'S OWN BRAND NAME ON PLUGS) TO A MAJOR AUTO
MANUFACTURER IT WOULD TAKE A NEW ENTRANT INTO THE SPARK PLUG MARKET
FIVE TO EIGHT YEARS TO ESTABLISH A POSITION FOR ITS BRAND IN THE
REPLACEMENT MARKET, THE DISTRICT COURT'S ORDERS ASSURED THAT FORD COULD
NOT BEGIN TO HAVE BRAND-NAME SUCCESS IN THE REPLACEMENT MARKET FOR AT
LEAST 10 TO 13 YEARS.  /4/ 

IN MY VIEW THESE DRASTIC REMEDIAL PROVISIONS ARE NOT WARRANTED BY
THE COURT'S FINDINGS AS TO THE GROUNDS ON WHICH FORD'S ACQUISITION
VIOLATED THE ANTITRUST LAWS.  FURTHER, IN LIGHT OF THE DISTRICT COURT'S
OWN FACTFINDINGS, THESE REMEDIES WILL HAVE SHORT RUN ANTICOMPETITIVE
IMPACT AND THEY GIVE NO ASSURANCE THAT THEY WILL SUCCEED IN AUTOLITE TO
ESTABLISH ITS COMPETITIVE POSITION. 

THE REMEDIAL PROVISIONS ARE UNRELATED TO RESTORING THE STATUS QUO
ANTE WITH RESPECT TO THE TWO VIOLATIONS FOUND BY THE DISTRICT COURT,
THE ENDING OF FORD'S STATUS AS A POTENTIAL ENTRANT WITH A MODERATING
INFLUENCE ON THE MARKET AND THE FORECLOSURE OF A SIGNIFICANT PART OF
THE PLUG MARKET.  INDEED, THE REMEDIES MAY WELL BE ANTI-COMPETITIVE IN
BOTH RESPECTS.  FIRST, THE DISTRICT COURT'S ORDER ACTUALLY UNDERCUTS
THE MODERATING INFLUENCE OF FORD'S POSITION ON THE EDGE OF THE MARKET. 
IT IS THE POSSIBILITY THAT A COMPANY ON THE SIDELINES WILL ENTER A
MARKET THROUGH INTERNAL EXPANSION THAT HAS A MODERATING INFLUENCE ON
THE MARKET.  BY PROHIBITING FORD FROM ENTERING THE MARKET THROUGH
INTERNAL EXPANSION, THEREFORE, THE REMEDY ORDER WIPES OUT, FOR THE
DURATION OF THE RESTRICTION, THE PRO-COMPETITIVE INFLUENCE FORD HAD ON
THE MARKET PRIOR TO ITS ACQUISITION OF AUTOLITE.  SECOND, THE COURT'S
ORDER DOES NOT FULLY UNDO THE FORECLOSURE EFFECT OF THE ACQUISITION. 
DIVESTMENT ALONE WOULD RETURN THE PARTIES TO THE STATUS QUO ANTE.  FORD
WOULD THEN BE FREE TO DEAL WITH AUTOLITE OR ANOTHER PLUG PRODUCER OR TO
ENTER THE MARKET THROUGH INTERNAL EXPANSION.  YET THE COURT HAS ORDERED
FORD TO BUY AT LEAST HALF ITS REQUIREMENTS FROM AUTOLITE FOR FIVE
YEARS.  THUS, THE ORDER ITSELF FORECLOSES PART OF FORD'S NEEDS FROM THE
FORCES OF COMPETITION. 

THE ABOVE PROBLEMS MIGHT BE MINOR IF THE DISTRICT COURT'S REMEDY
WERE JUSTIFIABLE IN TERMS OF RETURNING AUTOLITE TO THE STATUS QUO ANTE
BY OVERCOMING SOME HARM TO ITS ABILITY TO COMPETE ACCOMPLISHED BY
FORD'S ACQUISITION.  BUT ON THIS ISSUE THE DISTRICT COURT OPINION AND
THE MAJORITY OF THIS COURT ARE CONFUSED.  ALTHOUGH THE DISTRICT COURT
ASSERTED THAT AUTOLITE NEEDED THE AID OF ITS INJUNCTIVE REMEDIES TO
ESTABLISH ITS COMPETITIVE POSITION, THE COURT MADE NO FINDINGS IN ITS
REMEDY OPINION AS TO THE SOURCE OF AUTOLITE'S COMPETITIVE WEAKNESS. 
THEREFORE IT NEVER REACHED THE ISSUE WHETHER THE SOURCE OF WEAKNESS HAD
ANYTHING TO DO WITH THE VIOLATIONS ATTRIBUTED TO FORD.  INSTEAD, THE
COURT'S OPINION PROCEEDED FROM THE RECOGNITION OF COMPETITIVE PROBLEMS
IMMEDIATELY TO THE PRESCRIPTION OF A REMEDY. 

IN FACT, A FAIR READING OF THE FINDINGS OF THE DISTRICT COURT SHOWS
THAT THE ACQUISITION DID NOT INJURY AUTOLITE'S COMPETITIVE POSITION. 
AUTOLITE'S OE STATUS WAS CONTINUED AND ITS SHARE OF THE AFTERMARKET WAS
INCREASED FROM 12.5% TO 19%.  THUS, ITS TRADEMARK IS AT LEAST AS STRONG
NOW AS WHEN FORD ACQUIRED THE COMPANY.  NOR DID THE ACQUISITION AND
HOLDING OF AUTOLITE INJURE ITS DISTRIBUTION SYSTEM.  THE DISTRICT COURT
FOUND THAT AUTOLITE DID NOT OWN A DISTRIBUTION SYSTEM.  IT MERELY HAD
SHORT-TERM CONTRACTS WITH JOBBERS WHO DISTRIBUTED ITS PLUGS TO THOSE
WHO INSTALL THEM IN CARS OR SELL THEM TO THE PUBLIC.  ALMOST ALL OF
THESE JOBBERS HAD CONCURRENT DISTRIBUTION RELATIONS WITH FORD.  IN
FACT, BETWEEN 1961 AND 1966 FORD TRIPLED THE NUMBER OF JOBBERS HANDLING
AUTOLITE PLUGS.  FROM THE OPINION BELOW, IT APPEARS THAT FORD HAS DONE
NOTHING THAT WILL PREVENT AN INDEPENDENT AUTOLITE FROM SEEKING TO
MAINTAIN THESE DISTRIBUTION CHANNELS.  THE ONLY POSSIBLE FINDING OF
INJURY TO BE SQUEEZED OUT OF THE ACQUISITION RELATED TO THE FACT THAT
AUTOLITE HAS BEEN SHORN OF ITS STATUS AS OE SUPPLIER OF CHRYSLER.  BUT
THIS IS INCONCLUSIVE.  AUTOLITE HAD NOTHING MORE IN ITS POSITION AS OE
SUPPLIER TO CHRYSLER THAN IT WOULD IF FORD VOLUNTARILY CHOSE TO USE
AUTOLITE PLUGS AFTER THE DIVESTMENT:  A RELATIONSHIP BASED ON SHORT
TERM CONTRACTS THE AUTO MANUFACTURER COULD REFUSE TO RENEW AT ANY
TIME.     THE FINDINGS OF THE DISTRICT COURT INDICATE THAT AUTOLITE'S
PRECARIOUS POSITION DID NOT RESULT FROM ITS ACQUISITION BY FORD.  PRIOR
TO THE ACQUISITION BOTH CHAMPION AND AUTOLITE WERE IN A CONTINUALLY
PRECARIOUS POSITION IN THAT THEIR CONTINUED LARGE SHARE OF THE MARKET
WAS TOTALLY DEPENDENT ON THEIR POSITIONS AS OE SUPPLIERS TO AUTO
MANUFACTURERS.  THE VERY FACTOR THAT ASSURED THAT THEY FACED NO SERIOUS
COMPETITION IN THE SHORT RUN ALSO ASSURED THAT IN THE LONG RUN THEIR
OWN POSITION WAS DEPENDENT ON THEIR RELATIONSHIP WITH A LARGE AUTO
MANUFACTURER.  THUS, THE THREAT TO AUTOLITE POSED BY A SIMPLE
DIVESTITURE IS THE SAME THREAT IT HAD LIVED WITH BETWEEN 1941 AND 1961
AS AN INDEPENDENT ENTITY:  IT MIGHT BE LEFT WITHOUT ANY OE SUPPLY
RELATIONSHIP WITH A MAJOR AUTO MANUFACTURER, AND THEREFORE ITS MARKET
POSITION BASED ON THIS RELATIONSHIP MIGHT DECLINE DRASTICALLY. 

TODAY'S OPINION ERRS WHEN IT STATES, ANTE, AT 571, THAT THE DISTRICT
JUDGE FOUND THE OE TIE THE "KEY TO THE SOLUTION" OF THIS PROBLEM. 
ALTHOUGH THE COURT INDEED FOUND THIS TIE A PERVASIVE FACTOR IN THE
MARKET, IT ALSO FOUND THAT THE PHENOMENON WAS NOT CREATED BY FORD AND
THAT IT DID NOT CONSTITUTE A SEC. 7 VIOLATION.  THEREFORE THE COURT
ERRS IN JUSTIFYING THE ANCILLARY REMEDIES AS NECESSARY TO OVERCOME THE
OE TIE.  EVEN IF SUCH A REMEDY MIGHT OVERCOME THE OE TIE, WHICH I
QUESTION, THERE IS NO JUSTIFICATION FOR BURDENING FORD WITH THE
RESTRICTIVE ORDER. 

FURTHER, THE ONLY CONCLUSION TO BE DRAWN FROM THE TRIAL FINDINGS IS
THAT THE REMEDY IS UNLIKELY TO RESULT IN A SECURE MARKET POSITION FOR
AUTOLITE AT THE END OF THE RESTRICTED PERIOD.  ONCE AGAIN IT WILL BE
DEPENDENT FOR ITS SURVIVAL ON WHETHER IT CAN MAINTAIN AN OE SUPPLY
STATUS.  THE DISTRICT COURT'S SUGGESTION THAT AUTOLITE CAN FIND A NICHE
SUPPLYING PRIVATE-BRAND LABELS IS UNPERSUASIVE.  IT CANNOT BE PREDICTED
WITH ANY CERTAINTY THAT THESE SALES OUTLETS WILL GROW TO THE EXTENT
PREDICTED BY ONE PERSON IN THAT LINE OF THE BUSINESS.  FURTHER, EVEN IF
THEY DO, THIS IS NO ASSURANCE OF AUTOLITE'S SURVIVAL.  THERE ARE
ALREADY SEVERAL COMPANIES IN THE BUSINESS OF PRODUCING PLUGS FOR
PRIVATE LABELS.  AUTOLITE WILL HAVE TO COMPETE WITH THEM.  THE RESULTS
WILL NOT BE HELPFUL.  ONE POSSIBILITY IS THAT AUTOLITE WOULD COMPLETELY
MONOPOLIZE THE PRIVATE-BRAND MARKET TO THE EXTENT OF ABOUT 17% OF THE
REPLACEMENT MARKET.  THIS IS AS UNCOMPETITIVE AS IT IS UNLIKELY.  THE
MORE REASONABLE LIKELIHOOD IS THAT AUTOLITE MIGHT BE ABLE TO GAIN A
POSITION PRODUCING, FOR INSTANCE, 5% OF THE REPLACEMENT MARKET PLUGS. 
BUT THIS WOULD BE USELESS BECAUSE THE DISTRICT COURT'S FINDINGS MAKE
CLEAR THAT AUTOLITE'S FIXED-PRODUCTION PLANT CANNOT SUPPLY SUCH A SMALL
SHARE OF THE MARKET AT A PROFIT. 

IN THE FINAL ANALYSIS IT APPEARS TO ME THAT THE DISTRICT COURT,
SEEING THE IMMEDIATE PRECARIOUSNESS OF AUTOLITE'S POSITION AS A
DIVESTED ENTITY, DESIGNED REMEDIES TO SUPPORT AUTOLITE WITHOUT
CONTEMPLATING WHETHER IT WAS EQUITABLE TO RESTRICT FORD'S FREEDOM OF
ACTION FOR THESE PURPOSES OR WHETHER THERE WAS ANY REAL CHANCE OF
AUTOLITE'S EVENTUAL SURVIVAL.  I FEAR THAT THIS IS A SITUATION WHERE
THE FORM OF PRESERVING COMPETITION HAS TAKEN PRECEDENCE OVER AN
UNDERSTANDING OF THE REALITIES OF THE PARTICULAR MARKET.  THEREFORE I
DISSENT FROM TODAY'S AFFIRMANCE OF THE DISTRICT COURT'S HARSHLY
RESTRICTIVE REMEDIAL PROVISIONS.  /5/ 

/1/  OF COURSE, THE DECLINE WOULD TAKE A NUMBER OF YEARS, SINCE IT
WOULD BE SPREAD OVER THE LIFE OF THE CARS ON THE ROAD BEARING THE
PRODUCER'S PLUGS AS ORIGINAL EQUIPMENT-- PROBABLY FIVE TO EIGHT YEARS. 

/2/  MR. JUSTICE STEWART, CONCURRING IN THE RESULT, RELIES ON
FACTUAL ASSUMPTIONS THAT SEEM TO ME DIRECTLY CONTRARY TO FINDINGS MADE
BY THE DISTRICT COURT.  WHILE THAT COURT FOUND FUTURE DEVELOPMENTS
MIGHT ARISE IN THE PLUG MARKET THAT WOULD ENABLE AN INDEPENDENT
AUTOLITE WITHOUT OE STATUS TO SURVIVE, IT ALSO FOUND THAT AN
INDEPENDENT ENTRY BY FORD IN 1960, OR EVEN AS OF THE DATE OF THE
PROJECTED DIVESTITURE, WOULD HAVE LEFT AUTOLITE DOOMED BECAUSE THE
MARKET WOULD NOT YET BE READY TO OFFER IT AN INDEPENDENT NICHE.  BY
SLIGHTING THESE FINDINGS, MR. JUSTICE STEWART IS ABLE TO AVOID THE
QUESTION WHETHER FORD SHOULD HAVE TO BEAR THE BURDEN OF MAINTAINING
AUTOLITE'S LIFE UNTIL A TIME WHEN MARKET CHANGES MIGHT SUPPORT IT WHEN
IT IS CLEAR THAT AN EARLIER INDEPENDENT ENTRY BY FORD WOULD HAVE LEFT
IT MORIBUND.  HE FURTHER OVERLOOKS THE PROBLEMS DISCUSSED BELOW AS TO
THE UNLIKELIHOOD OF AUTOLITE'S SUCCESS, ITS FIXED-PRODUCTION NEEDS
VERSUS THE SMALL SIZE OF THE MARKET FREE OF THE OE TIE. 

/3/  THE DISTRICT COURT MADE NO MENTION OF WHETHER A DIVESTED
AUTOLITE WOULD HAVE THE SIX REGIONAL OFFICES AND PERSONNEL THAT IT HAD
IN 1960.  GIVEN THE DISTRICT COURT'S SOLICITUDE FOR AUTOLITE'S HEALTH,
I CAN ONLY ASSUME THAT IT EXPECTED AUTOLITE TO BE SENT OUT WITH
WHATEVER IT HAD BROUGHT IN. 

/4/  THE MAJORITY OPINION ERRS IN ITS EVALUATION, ANTE, AT 577, OF
THE EFFECT OF THE RESTRICTIONS ON FORD'S ABILITY TO ESTABLISH ITSELF IN
THE AFTERMARKET.  THE DISTRICT COURT OPINION MAKES CLEAR THAT GAINING A
POSITION IN THE REPLACEMENT MARKET TAKES FIVE TO EIGHT YEARS AFTER THE
BRAND OF PLUGS IS FIRST INSTALLED AS ORIGINAL EQUIPMENT:  18 MONTHS TO
THREE YEARS BEFORE THE FIRST CARS NEED PLUG REPLACEMENTS PLUS SEVERAL
ANNUAL CAR POPULATIONS REQUIRING THIS BRAND BEFORE SERVICE CENTERS
WOULD BE MOTIVATED TO STOCK IT.  THUS, THE PROHIBITION AGAINST FORD'S
USING ITS OWN NAME FOR FIVE YEARS DELAYS THE BEGINNING OF AN
INDEPENDENT FORD ENTRY AND RESULTS IN ASSURING THAT FORD COULD NOT GAIN
A POSITION IN THE AFTERMARKET FOR 10 TO 13 YEARS AFTER THE EFFECTIVE
DATE OF THE DIVESTITURE. 

/5/  THIS CASE ILLUSTRATES THE UNSOUNDNESS OF THE DIRECT APPEAL
PERMITTING IN CASES OF THIS KIND UNDER 15 U.S.C. 29.  IN A FACTUALLY
COMPLICATED CASE LIKE THIS, WE WOULD BE IMMEASURABLY AIDED BY THE
SCREENING PROCESS PROVIDED BY A COURT OF APPEALS REVIEW.  LIMITED
EXPEDITING OF SUCH CASES, UNDER THE DISCRETION OF THIS COURT, WOULD
SATISFY ALL NEEDS JUSTIFYING DIRECT REVIEW IN THIS COURT. 

MR. JUSTICE BLACKMUN, CONCURRING IN PART AND DISSENTING IN PART. 

I CONCUR IN PART I OF THE COURT'S OPINION AND IN THAT PORTION OF
PART II THAT APPROVES DIVESTITURE AS PART OF THE REMEDY.  I CANNOT
AGREE, HOWEVER, THAT PROHIBITING FORD FROM USING ITS OWN NAME OR ITS
TRADE NAME ON ANY SPARK PLUGS FOR FIVE YEARS AND ENJOINING IT ENTIRELY
FROM MANUFACURING PLUGS FOR 10 YEARS IS JUST, EQUITABLE, OR NECESSARY. 
INSTEAD, THE STRINGENCY OF THOSE REMEDIAL PROVISIONS STRIKES ME AS
CONFISCATORY AND PUNITIVE.  THE COURT'S OPINION, ANTE, AT 566,
RECOGNIZES THAT FORD COULD DEVELOP ITS OWN SPARK PLUG DIVISION
INTERNALLY AND PLACE ITSELF IN THE SAME POSITION GENERAL MOTORS HAS
OCCUPIED FOR SO LONG, BUT THAT THIS WOULD TAKE FROM FIVE TO EIGHT
YEARS.  THE RESTRAINT ON FORD'S ENTERING THE SPARK PLUG AREA IS THUS
FOR A PERIOD LONGER THAN IT WOULD TAKE FORD TO ACHIEVE A POSITION IN
THE MARKET THROUGH INTERNAL DEVELOPMENT.  AND TO DENY IT THE USE OF ITS
OWN NAME IS TO DENY IT A PROPERTY RIGHT THAT HAS LITTLE TO DO WITH THIS
LITIGATION. 

WHITNEY NORTH SEYMOUR ARGUED THE CAUSE FOR APPELLANT.  WITH HIM ON
THE BRIEFS WERE ELEANOR M. FOX, MICHAEL R. GOLDENBERG, GEORGE H.
HEMPSTEAD III, AND L. HOMER SURBECK. 

DEPUTY SOLICITOR GENERAL FRIEDMAN ARGUED THE CAUSE FOR THE UNITED
STATES.  WITH HIM ON THE BRIEF WERE SOLICITOR GENERAL GRISWOLD,
ASSISTANT ATTORNEY GENERAL MCLAREN, WM. TERRY BRAY, IRWIN A. SEIBEL,
AND WILLIAM H. MCMANUS. 

MELVIN LASHNER FILED A BRIEF FOR ZENITH VINYL FABRICS CORP. AS
AMICUS CURIAE.



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