A Detroit manufacturer of diesel engines and its corporate affiliates spun a web of conspiracy to shut out their competitors, according to a class-action lawsuit that 10 truck dealers filed in a Pennsylvania federal court last week.
Detroit Diesel Corp. (DDC) and its distributors boycotted Volvo and International Truck dealerships by revoking their licenses to perform warranty work on Detroit-brand engines. The move was a "retaliation" against dealers that had stopped buying the engines after DaimlerChrysler purchased DDC in October 2000, the suit alleges.
The engine buyout helped Stuttgart, Germany-based DaimlerChrysler integrate its trucking businesses. Detroit Diesel supplies engine equipment to Freightliner, Sterling and Western Star trucks, which also are Daimler-owned companies. The trucks are used for hauling construction materials and other freight.
Before the buyout, Detroit sold engines to other truck manufacturers and dealers, including International and Volvo. But beginning in 2001, Detroit stripped away their warranty rights and started overcharging them for parts by 35.5%. Meanwhile, Daimler dealers enjoyed hefty discounts, says the February 10 suit, claiming that such actions violated the Sherman Antitrust Act.
"DDC did not merely announce the price increases, but engaged in coercive tactics," the complaint says. "These actions were not taken individually, but jointly, and with the understanding and agreement
that all would act in a similar anti-competitive fashion." Attempts to reach Detroit Diesel officials for comments failed.
The plaintiffs are asking the court for a jury trial that would bring injunctive relief, as well as three times the cost of damages.