General Motors Corp. can offer its new line of X-cars, scheduled for introduction on Thursday, with radios as standard equipment despite claims by 10 independent automobile radio distributors that it would hurt their business, a federal judge in Alexandria ruled yesterday.
The country's largest automaker would lose more than the radio distributors if a temporary injunction sought by the distributors against GM were granted, said U.S. District Judge Oren R.Lewis.
"The injury to General Motors that would be created by the entry of an injunction at this late date is huge," Lewis said in a five-page opinion. "There is no way to calculate the damage to the X-car of General Motors' ($2.4 billion) investment in it."
Any injury that might result to the radio distributors between the introduction on Thursday and the final hearing on the merits next month "can be fully compensated by money damages," Lewis added.
Lewis apparently agred with one of GM's arguments that the company is trying to compete with foreign-made cars whose radios and other equipment are standard. "Past experience with customers demonstrates that cars designed to compete with well-equipped imports fail if they are not equally well equipped," Lewis said.
The compact X-cars, with front wheel drives, include the Chevrolet Citation, Pontiac Phoenix, Oldmobile Omega and Buick Skylark.
The radio dealers, which specialize in distribution and installation of automobile sound equipment, are local or regional firms from Maryland to California. They argued in a hearing last week that GM's decision to include its own radios as standard equipment in the new line of cars amounts to restraint of trade.
GM has been phasing in radios as standard equipment in some cars since the 1974 models. Sales of GM's Chevrolet Chevette doubled once they were made with radios as standard equipment, GM lawyers contended.
Besides, lawyers for the company argued, GM has been planning a massive mid-season introduction for months and has spent more than $30 million in advertising.
Lewis said "it has generally been known for many months" when the introduction would take place and the radio dealers should have brought suit against GM sooner. The radio deasers would lose 1 percent of the total sales in automotive sound equipment if the introduction and manufacture of the cars went ahead, Lewis said. Since the trial on the merits will be held on May 14, the radio dealers stand to lose less than that, Lewis added.
Andrew Miller, former Virginia attorney general who represents the radio dealers said yesterday that "no decision has been made as to what we intend to do" as a result of Lewis' ruling. The radio dealers could ask the 4th U.S. Circuit Court of Appeals to hear the case before Thursday. Miller would not comment on the opinion itself.