The Federal Trade Commission has granted a petition from General Motors Corporation (GM) to reopen and modify the portion of a 1979 consent order that prohibits GM from placing the name of a car division on an engine label unless the car division also manufactured the engine. The Commission determined that since the order was issued, GM has implemented a series of corporate restructurings that resulted in the removal of engine production from the nameplate divisions that existed in 1979. General Motors is based in Detroit, Michigan.
The 1979 order at issue settled allegations that General Motors engaged in unfair and deceptive practices by selling cars with engines and other equipment manufactured by a different GM division without informing purchasers. The order prohibited GM from misrepresenting the availability of any standard or optional equipment and prohibited GM from displaying a division's name on an engine unless it was manufactured by that division.
In July 1995, GM petitioned the FTC to modify Part III of the order to "permit GM to use its trade names non-deceptively by displaying the name of a GM line-make on any engine which is materially different from engines bearing other line-make names." Due to changes in GM's organizational structure, line-make names no longer appear on the engines of GM cars sold by the nameplate divisions that existed in 1979.
The Commission determined that changed conditions of fact justified reopening the proceeding and modifying the order. Because its marketing divisions (except Saturn) no longer manu- facture engines, Part II of the 1979 order prevents GM from labeling its engines with their division nameplates. GM's competitors who also have marketing divisions that are separate from their engine manufacturing divisions, in contrast, label their engine with division nameplates. The Commission, there- fore, concluded that Part III of the order has become inequitable and harmful to competition.
The Commission has modified the order to allow GM to display brand nameplates on engines that are materially different from those displaying all other brand nameplates. The order does not allow GM to display different brand nameplates on identical engines. Also, Part II.A. of the order will continue to prohibit GM from displaying a nameplate on an engine in a manner that misrepresents the manufacturing source of an engine. Finally, the Commission deleted the provisions from the modified order that have expired, concluding that elimination of these expired provisions is warranted.
The Commission vote to reopen and modify the order was 5-0.
Copies of Commission's order reopening and modifying the 1979 order, as well as other documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov