Johnson Controls Sues Exide Over Sears Account
Alternate Fuel Cars Can Use the Carpool Lane
U.S. Aftermarket Continues to Grow

JOHNSON CONTROLS SUES EXIDE OVER SEARS ACCOUNT

Johnson Controls has filed suit against Exide Corporation and three of its former highest-ranking officers, Arthur Hawkins, Alan Gauthier and Douglas Pearson.

The lawsuit alleges that the commercial bribery of a former Sears, Roebuck and Co. battery buyer was a cause of Johnson Controls losing its battery supply contract with Sears in 1994.

As of that date, Johnson Controls had been the principal supplier of batteries to Sears for approximately 40 years.

The records of a Florida Attorney General's investigation of Exide were made available to Johnson Controls attorneys for review beginning in February 2000. These records revealed evidence of commercial bribery by Exide. Johnson Controls attorneys independently reviewed the evidence of Exide’s conduct. The records included sworn testimony of numerous former Exide employees. Exide admitted in December 1999 court filings that its former officers had paid certain bribes.

The investigation yielded evidence that during the period leading up to the award of the 1994 contract, Exide’s former chief executive officer promised to make payments to the buyer if Exide received the contract. After the contract was awarded, Exide began making the payments described in the complaint. These findings led to the conclusion that Johnson Controls should file a lawsuit for violation of the federal Robinson-Patman Act arising from Exide's commercial bribery.

Johnson Controls gave Exide advance notice of the lawsuit in early June and offered Exide the opportunity to discuss settlement.

Several days after an initial June 8, 2000 settlement discussion, Exide's current chief executive officer, Robert Lutz, rejected the offer to continue these discussions, claiming it was unethical for Johnson Controls to offer to settle the lawsuit.

After Exide’s decision to discontinue settlement discussions, Johnson Controls filed the bribery lawsuit at the end of June.

The complaint, which was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, seeks compensatory damages and punitive damages to be determined at trial.

Johnson Controls began supplying batteries to Sears again in 1997.

ALTERNATE FUEL CARS CAN USE THE CARPOOL LANE

In an effort to promote the use of "cleaner" vehicles, carpool lanes have been opened to drivers of alternatively fueled cars and vans.

Under a new law that took effect on July 1, the drivers of most alternatively fueled cars and vans will have access to California's high occupancy vehicle (HOV) lanes regardless of the number of occupants aboard.

Enacted last year by the California Legislature as AB 71, the new law extends the HOV privilege to drivers of vehicles that weigh 14,000 pounds or less and run exclusively on alternative fuels such as natural gas, propane, or electricity.

Owners of qualifying vehicles must register with the DMV and display a special DMV-issued decal. The registration and decal will also help California Highway Patrol enforce existing HOV lane laws.

Those affected by the new law include fleets owned by SuperShuttle, the United States Post Office, the City of Los Angeles, American Taxi and United Parcel Service as well as individual drivers who have purchased the vehicles for their personal use.

For more information on registering an alternatively fueled vehicle for a DMV-issued decal, visit the agency’ web site at www.dmv.ca.gov, or call your local DMV and ask them to mail DMV Form 156.

U.S. AFTERMARKET CONTINUES TO GROW

The automotive aftermarket in the United States continues to grow, according to a recent report by the Automotive Aftermarket Industry Association.

The AAIA found that the aftermarket expanded 4.4% in 1999 to $155 billion. Sales grew the fastest in the heavy-duty truck segment as miles driven rose to meet the demands of the booming economy.

Overall, the service and repair market accounted for 66% of the automotive aftermarket sales. The do-it-yourself market for parts and accessories accounted for 22 percent of aftermarket sales.

In keeping with these sales numbers, the AAIA found that fewer Americans are working on their own vehicles. They discovered that overall DIY activity dropped from 42% in 1993 to 37% in 1999. The number of DIYers tackling heavy repairs and maintenance fell sharply from 28% in 1994 to 8% in 1999.

A copy of the study, the Aftermarket Factbook, is available from the AAIA at a cost of $50 for members and $100 for non-members.

For more information, contact the AAIA at (301) 654-6664 or on-line at www.aftermarket.org.

Originally published in the October 2000 issue of Automotive Booster Magazine.
Copyright 2000 by KAL Publications Inc.