A federal judge in Alexandria yesterday agreed to consider a request by 10 major car radio distributors to bar General Motors from including radios as standard equipment in its new X-cars before they are introduced later this month.
U.S. District Court Judge Oren Lewis set April 12 for a hearing on a request for a preliminary injunction against General Motors. The radio distributors argue that GM's decision to include its own radios as standard equipment in the new downsized cars amounts to restraint of trade. The automaker has been phasing in radios as standard equipment in some cars since 1973.
The radio dealers, which specialize in distribution and installation of automobile sound equipment, are local or regional firms Maryland to California.
The case, the first of its kind, challenges GM's right to make some equipment standard and would determine whether it violates antitrust laws to do so in some instances. The case could open challenges by consumers who must pay for standard equipment regardless of whether they want it.
"The question is can you be required to take a radio?" Lewis said.
"Then the case is whether a radio is an integral part of the automobile, like the motor?" Lewis asked. "If you are going to equate radios with spark-plugs, you can almost say you've got to sell an auto knocked down. I can envision a lot of economic experts talking about that subject."
A ruling against GM could mean "you can sell me a car without a battery and give me a Sears Diehard," Lewis said.
The distributors and installers claim in a lawsuit that they are trying to stop GM from introducing on April 19 its new 1980 line of cars, called the X-cars, that have as a special feature radios as standard equipment. About 60,000 such cars are alfeady in dealer showrooms waiting for their introduction amidst a special multi-million dollar advertising campaign, GM lawyers said yesterday.
The radio dealers claim they will lose millions of dollars in business if the autos are allowed to be introduced that way and it will encourage GM and other manufacturers to introduce more cars with nonoptional radios in the future. The dealers said in their suit, that on 1979 CM models sold with radios as standard equipment they have lost more than $20 million.
Lawyers for GM, however, contened in court that they are merely trying to compete with Japanese-made cars whose radios, in most cases are standard equipment.
Sales of GM's Chevrolet Chevette doubled once they were made with radios as standard equipment, said Fred Bartlit, a lawyer respresenting GM. "We are planning the biggest mid-season release ever. Because we learned we were able to beat our Japanese competition" by making radios standard equipment, "naturally we're going to do it with the X-cars."
The X-cars, sporty, front wheel drive gas stingy cars are intended to compete with the imports. They are the Chevrolet Citation, Pontiac Phoenix, Oldsmobile Omega, and Buick Skylark.