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Federal Register / Vol. 48, No. 250/ Wednesday, December 28. 1983 / Proposed Rules

existing and doing business under the laws of Delaware, with its principal offices at 30 West Grand Boulevard, Detroit, Michigan, as well as its cfficers. employees, agents, its parents, divisions, subsidiaries, successors, assigns, and the officers, employees or agents of GM's parents, divisions, subsidiaries. successors and assigns.

2. "Toyota" means Toyota Motor Corporation, a corporation organized, existing and doing business under the laws of Japan, with its principal offices at 1. Toyota Cho, Toyota City, Aichi Prefecture 471. Japan, as well as its officers, employees, agents, its parents, divisions, subsidiaries, successors, assigns, and the officers, employees or agents of Toyota's parents, divisions, subsidiaries, successors and assigns. 3. The term "New Automobiles" means new passenger automobiles menufactured or sold in or shipped to the United States or Canada, and includes light trucks and vans.

4. The term "Module" means an integrated manufacturing facility, comprising, at a minimum, body, paint and final assembly functions, capable of producing not more than approximately 250.000 New Automobiles per year.

5. The term "Joint Venture" means any corporation, partnership or other entity jointly owned, controlled, managed or directed by GM and Toyota, or by both GM and Toyota and any other entity or entities, that engages in the manufacture or sale of New Automobiles. The term "Joint Venture" includes the successors and assigns of a Joint Venture, and any entity formed subsequent to a Joint Venture for purposes similar to the purposes of a Joint Venture.

6. Information is presumptively "public" if it is reported in a publication other than one authored by GM or Toyota.

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operation beyond the earlier of twelve years after the start of production or December 31, 1997; provided, however, that nothing in this paragraph prohibits respondents from continuing any entity beyond twelve years for the limited purposes of winding up the affairs of the Joint Venture (which shall not include manufacturing New Automobiles). disposing of its assets, and providing for continuing warranty or product or service responsibilities for Joint Venture products.

IV

It is further ordered that respondents shall not exchange or discuss between themselves, or with any Joint Venture. non-public information in connection with New Automobiles relating to current or future:

1. Prices of GM or Toyota New Automobiles or component parts of New Automobiles, except pursuant to a supplier-customer relationship entered into in the ordinary course of business; 2. Costs of GM or Toyota products, except as provided in Paragraph V of this order,

3. Sales or production forecasts or plans for any product other than the product of the Joint Venture; or

V

4. Marketing plans for any product.

It is further ordered that respondents shall not, except as may be necessary to accomplish, and solely in connection with, the legitimate purposes or functioning of any Joint Venture, exchange or discuss between themselves, or with any Joint Venture, non-public information in connection with New Automobiles relating to current or future:

1. Model changes, design changes, or product designs relating to the product of the Joint Venture;

2. Sales or production forecasts or plans as they relate to the product of the Joint Venture; or

3. Costs of GM or Toyota products supplied to the Joint Venture.

VI

It is further ordered that each respondent shall, and respondents shall cause any Joint Venture to:

1. Maintain complete files and records of all correspondence and other communications, whether in the United States or elsewhere, between and among GM. Toyota and the Joint Venture concerning information described in Paragraph V;

2. Maintain logs of all meetings and nonwritten communications, whether in the United States or elsewhere, between and among GM, Toyota, and the Joint

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Venture concerning information described in paragraph V, including in such logs the names and corporate positions of all participants, the dates and locations of the meetings or other communications and a summary or description of such information:

3. For a period of six years, retain and make available to the Federal Trade Commission on request the complete files, records and logs required by subparagraphs 1 and 2; and

4. Annually, on the anniversary date of this Order, furnish a copy of this Order to each management employee of the Joint Venture and each management employee of GM and Toyota with responsibilities for the Joint Venture. and furnish to the Federal Trade Commission a signed statement provided by each such employee affirming that he or she had read a copy of this Order, understand it, and intends to comply fully with its provisions.

VII

It is further ordered that each respondent shall, within sixty days from the date of issuance of this Order, and annually thereafter, submit in writing to the Commission a report setting forth in detail the manner and form in which it intends to comply, is complying and has complied with the terms of this Order.. and such additional information relating thereto as may from time to time reasonably be required.

VIII

It is further ordered that each respondent shall notify the Commission at least thirty days prior to any change in itself or in any Joint Venture that affects compliance with the obligations arising out of this Order, such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporations or Joint Venture.

IX

It is further ordered that the prohibitions of this Order shall terminate five years after the

termination of manufacturing or sales of New Automobiles by all Joint Ventures. Appendix A

Complaint

The Federal Trade Commission, having reason to believe that General Motors Corporation ("GM" or "General Motors") and Toyota Motor Corporation ("Toyota") intend to acquire shares in a Joint Venture corporation in violation of section 7 of the Clayton Act, as amended (15 U.S.C. 18), and section 5 of

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Federal Register / Vol. 48, No. 250 / Wednesday, December 28, 1983 / Proposed Rules

the Federal Trade Commission Act, as amended (15 U S.C. 45). and it appearing that a proceeding by the Commission in respect thereof would be in the public interest, the Commission hereby issues its Compliants. pursuant to section 11 of the Clayton Act (15 U.S.C. 21) and section 5(b) of the Federal Trade Commission Act (15 U.S.C. 45(b)). stating its charges as follows:

1. Definition

1. For the purpose of this Complaint, the following definition shall apply: "new automobiles" means new passenger automobiles manufactured or sold in the United States or Canada, and includes light trucks and vans.

II. General Motors Corporation

2. General Motors is a Delaware corporation with headquarters at 3044 West Grand Boulevard, Detroit, Michigan.

III. Toyota Motor Corporation

3. Toyota is a Japanese corporation with headquarters at 1. Toyota Cho, Toyota City, Aichi Prefecture 471, Japan. IV. Jurisdiction

4. At all times relevant herein, each of the companies named in this complaint has been engaged in or affected commerce as "commerce" is defined in section 1 of the Clayton Act, as amended (15 U.S.C. 12), and section 4 of the Federal Trade Commission Act, as amended (15 U.S.C. 44).

V. The Proposed Joint Venture

5. Pursuant to an agreement reflected in a Memorandum of Understanding (hereinafter "Memorandum") executed by GM and Toyota on February 17, 1983, attached to this Complaint as Exhibit 1, GM and Toyota have agreed to form a Joint Venture corporation (hereinafter "Joint Venture"). GM and Toyota will each acquire one-half of the shares in the Joint Venture and will each designate one-half of the Board of Directors of the Joint Venture. The Joint Venture will be managed principally by persons designated by Toyota. The Joint Venture will manufacture new automobiles that will be designed by Toyota in consultation with GM and will be sold to CM, and may also manufacture new automobiles that would be sold to Toyota.

VI. Trade and Commerce

6. The relevant product market is the manufacture or sale of small new automobiles, which includes automobiles commonly referred to as subcompact, compact, and intermediate sized automobiles.

7. The relevant geographic market is the United States and Canada.

8. Concentration in the relevant product and geographic markets is high. 9. Both GM and Toyota are substantial competitors in the relevant product and geographic markets.

VII. Effects of the Proposed Joint
Venture

10. The effect of the Joint Venture may be substantially to lessen competition or tend to create a monopoly in the relevant markets in violation of section 7 of the Clayton Act, as amended (15 U.S.C. 18), or may be unfair methods of competition in violation of section 5 of the Federal Trade Commission Act, as amended (15 U.S.C. 45), in the following

ways:

(a) The output of the Joint Venture is likely to be significantly expanded beyond the single module, capable of producing not more than 250,000 new automobiles per year, an expansion that would not be reasonably necessary to accomplish any of the legitimate purposes of the Joint Venture; and

(b) The Joint Venture would provide no adequate safeguards against the use of the Joint Venture, or the relationships between GM and Toyota that are occasioned by the Joint Venture, for the transmission of competitively significant information beyond the minimum degree reasonably necessary to accomplish the legitimate purposes of the Joint Venture.

11. Each of the effects identified in paragraph 10, singly or in combination, would significantly increase the likelihood of noncompetitive cooperation between GM and Toyota, the effect of which may be substantially to lessen competition in the relevant markets, and would not be reasonably necessary to obtain any legitimate, procompetitive benefits of the Joint Venture.

VIII. Violations Charged

The parties' agreement to the proposed Joint Venture constitutes a violation of section 5 of the Federal Trade Commission Act, as amended (15 U.S.C. 45), and, if consummated, would constitute a violation of section 7 of the Clayton Act, as amended (15 U.S.C. 18). Wherefore, the premises considered, the Federal Trade Commission on this - day of issues its Complaint against said Respondents.

Exhibit 1-Toyota Motor CorporationGeneral Motors Corporation, Memorandum of Understanding February 17, 1983.

The Commission has deleted certain portions of this Agreement. Both GM

and Toyota have stated that disclosure of the deleted information, which the companies have maintained in strictest confidence, could likely cause serious competitive injury to the joint venture if publicly released. The Commission has determined that this information constitutes "commercial or financial information which was received from any person and which is privileged or confidential" within the meaning of section 6(f) of the FTC Act, 15 U.S.C. 46(f). Accordingly, the Commission is prohibited by that provision from making the information public.

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Toyota Motor Corporation (Toyota) and General Motors Corporation (GM) agree to establish a joint venture (JV) for the limited purpose of manufacturing in the United States a specific automotive vehicle not heretofore produced, and related components described below. In so doing, it is the intent of both parties to provide such assistance to the JV as is considered appropriate to the enhancement of the JV's success. The JV will be limited in scope to this vehicle and this agreement is not intended to establish a cooperative relationship between the parties in any other business.

.

The purpose of this Memorandum is to summarize the current understanding of Toyota and GM regarding the basic parameters of this limited manufacturing arrangement.

Product

The vehicle to be manufactured by the JV will be derived from Toyota's new front-wheel drive Sprinter. Body styles will include a 4-Door Sedan and (6-12 months later) a 5-Door Liftback. Toyota will retain design authority over the vehicle, in consultation as to vehicle appearance with GM, the purchaser. As modifications will probably be made to the Sprinter or Corolla over time in accordance with market demand, Toyota will effect similar changes to the JV vehicle if such changes are deemed desirable by the parties. Vehicle certification will be handled by Toyota, with assistance provided by JV and GM as agreed upon by the parties.

Manufacturing

The JV will begin production of the GM-specific vehicle as early as possible in the 1985 Model year with nominal capacity of approximately 200,000 units per annum at GM's former assembly facility in Fremont, California.

As part of the technical assistance stated hereinafter, Toyota will take the initiative, in consultation with GM, in designing the Fremont manufacturing layout and coordinating the related

Federal Register / Vol. 48, No. 250 Wednesday, December 28, 1983 / Proposed Rules

acquisition and installation of its machinery, equipment and tooling. In this regard, if GM deems it necessary for orders to be placed for construction of bulidings. JV machinery, equipment and tooling prior to the establishment of the JV to facilitate a timely introduction of the initial JV vehicle in the 1985 Model year. GM may do so in its own name directly or through Toyota, and the parties agree to share equally any capital expenditures or cancellation charges arising from such orders. The only exceptions to the above are as follows: In the event the JV is not established as a result of unfavorable U.S.governmental review of the mattersset forth in this Memorandum or, following consultations between the senior management of Toyota and GM, as a result of either party notifying the other on or prior to one hundred twenty (120) days following the signing of this Memorandum of Understanding by the parties that such party is not satisfied with the prospects for developing an acceptable employe relations structure, GM shall bear 100% of the cost of such expenditures and charges.

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GM's annual requirements are. presently expected to exceed 200,000 units per annum. Both parties will, therefore, assist the JV in increasing its? production to the maximum extent possible within the available capacity. Requirements for capacity beyond the first module will be the subject of a separate study.

The JV may later produce a variation of the JV vehicle for Toyota. Toyota and GM may also agree for GM to source the GM-specific vehicle from Toyota assembly plants in Japan, feeing JV capacity for Toyota's full or partial production of Toyota-specific vehicles. Purchase of Production Materials

The JV will purchase its production materials from those sources providing the least possible cost, consistent with its standards for product quality and vendor reliability of supply. Based on this principle, Toyota and GM have agreed upon a tentative sourcing approach, under which specific components to be purchased from Toyota, GM and other outside vendors. have been separately identified. Components to be manufactured by the JV, mainly major stampings, have also been identified.

Marketing

All GM-specific vehicles produced by the JV will be sold directly to GM or its designated marketing units for resale through GM's dealer network. If any variation of the JV vehicles should be produced by the JV for Toyota, such

vehicles would be sold directly to Toyota or its designated marketing unit for resale through Toyota's dealer network. Neither Toyota nor GM will consult the other with respect to the marketing of JV products, or any other products, through their respective marketing organizations.

Vehicles sold by the JV should be priced by the JV to provide a reasonable profit for the JV, Toyota, and GM. To accomplish this, production costs must be kept as low as possible through the combined best efforts of the JV, Toyota, GM and other major suppliers. In this regard, the parties have been conducting extensive studies detailing how each can work to minimize JV expenses.

The initial JV selling price of the JV vehicle to be sold to GM during the 1985 Model Year will be determined at least 60 days prior to the start of production by negotiation between the JV and GM. This negotiation will be based on the. production cost estimated 90 days prior to the expected start of production by the JV, with estimates of said cost to be guided by the feasibility study. In no event, however, will the said initial JV, selling price be higher than the upper limit nor lower than the lower limit, each as defined below. The upper limit shall be determined by adjusting for feature differences the Dealer Net Price less-% of Toyota's then current U.S. model front-wheel drive Corolla equipped comparably with the JV vehicle concerned, and the lower limit shall be determined by adjusting for feature differences the Dealer Net Price less-% of said Corolla. The adjustment for feature differences will be made by agreement between the JV and GM.

Thereafter, although there may be exceptions, the JV vehicle selling price will be revised and determined for each model year. The new selling price for the new model year will be determined by applying to the selling price for the previous model year the Index as defined in Exhibit A. Since the calculations embodied in the Index may occasionally yield a selling price which is at significant variance with then current market conditions, the JV and GM will in such cases negotiate a more appropriate selling price.

If model changes or specification changes of the vehicle manufactured by the JV are necessary, Toyota, GM and the JV will agree upon these model changes or specification changes. Toyota will present to the JV the plan for the model changes or specification changes concerned. Then, the JV will submit to and negotiate with GM the planned model changes and

specification changes together with the planned price changes. These model

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changes and specification changes will be made as agreed upon by the JV and GM.

The methodology to be employed in pricing optional equipment available on the JV vehicle (both initial and subsequent) will be comparable to that described in the three preceding paragraphs.

The initial prices of Toyota and GM components purchased by the JV will be determined 90 days or more prior to the start of production by negotiation between the JV and component suppliers after the determination of the specifications of the JV vehicle. Identification of the respective sources of supply and determination of the initial component prices will be guided by the feasibility study, with adjustments made for changes in specifications and appropriate economics.

Thereafter, the prices of components will be reviewed semi-annually. The new prices will be determined by negotiation between the JV and component suppliers.

If it is anticipated that continuation of the above-mentioned methods for determination of the prices of the JV vehicles to be sold by the JV and of components to be purchased by the JV would cause those prices to be at such levels as the JV would incur the losses which could endanger the normal operation of the JV, Toyota, GM and the JV shall negotiate and take necessary

measures.

As a fundamental principle, Toyota and GM shall each be free to price and free to market the respective vehicles. purchased from the JV without restrictions or influence from the other.

Operating Responsibility

The JV will be jointly controlled by an equal number of Toyota and GM directors, in line with Toyota and GM ownership. Toyota will designate the JV president as the chief executive officer and chief operating officer. Toyota and GM will assign to the JV other operating officers as the JV president and JV directors may request, but the parties recognize that the question of which party shall designate the JV officers in charge of financial affairs, labor relations and certain other operations has not yet been agreed upon. Quality Assurance

New vehicle warranty expense and administration will be the responsibility of the purchaser of the JV vehicle. The JV shall maintain product liability insurance for the benefit of the JV, the parties and other persons in such

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Federal Register / Vol. 48. No. 250 Wednesday, December 28, 1983 / Proposed Rules

amounts as the parties may deem prudent, and the premium costs for such product liability insurance will be borne by the JV. In each product liability lawsuit involving a JV vehicle, the JV and each of the parties will communicate and cooperate with each other in all respects in investigating the facts surrounding the case and in litigating the matter. Each of the parties will refrain from taking adversarial positions against each other. To the extent possible under the JV's product liability insurance arrangements, the JV shall be the entity having the right to control such product liability lawsuits. However, the relative financial share of settlement or adverse judgment costs relating to such product liability claims or losses which are not covered by such product liability insurance shall be apportioned -% to Toyota and -% to GM. Matters relating to JV vehicle recall campaigns (including fines and costs of corrective actions) shall be the subject of further study and negotiation between the parties.

Technical Assistance

Toyota will grant to the JV the license to manufacture the vehicle developed by Toyota, and in exchange for this license, the JV will pay a reasonable royalty to Toyota as may be agreed upon by the parties. Toyota and GM will license the necessary industrial property rights to the JV, and in exchange for these rights. the JV will pay reasonable license fees to Toyota and/or GM as may be agreed upon by the parties. Toyota and GM will also provide technical assistance to the JV on a cost basis plus reasonable markup.

As part of the technical assistance, GM agrees to assist Toyota and the JV in completing compliance tests for safety, emissions and other areas, as agreed upon by the parties.

Purchase/Sale of Equity Interest

Toyota and GM (including, subject to the approval of the other party, their wholly or majority-owned subsidiaries) will each hold a 50% equity interest in the JV. Neither party may transfer its equity interest in the JV to a third party without the written consent of the other. The above notwithstanding, the JV will terminate not later than 12 years after start of production. The methodology for disposition of Toyota and the GM equity interests prior to or upon JV termination will be incorporated in the JV documentation. Any surplus or deficit of the JV as at termination of the JV will be shared equally by Toyota and GM. in line with Toyota and GM ownership. Other issues relating to JV termination will be separately discussed.

Financing

Both Toyota and GM will contribute cash and/or fixed assets to the JV in exchange for equity interests. The amount to be continued as equity will depend upon the JV's total projected capital requirements. In the event that neither lenders or lessors insist that payments made by the JV be subject to appropriate guarantees, Toyota and GM agree either to provide such guarantees based on their pro rata share of the JV or to temporarily advance funds to the JV on their own account (also on a pro rata basis). To the extent permitted by creditors, Toyota and GM further agree that any security interests held by the parties in the JV assets will be shared equally.

Future Difficulties

If it is anticipated that the establishment or continuation of the JV would become difficult or infeasible due to any legal, political or labor-related reason which may arise in the United States, the parties will in good faith discuss the measures to be taken concerning the JV and endeavor to find appropriate solutions.

Agreements to Be Concluded

Depending upon the specific organizational form, various agreements will be concluded among Toyota and GM (including subsidiaries thereof) and the JV. These will include the following: Partnership Agreement or Shareholders Agreement and Articles of Incorporation; Vehicle Supply Agreement (JV to GM); Toyota Component Supply Agreement (Toyota to JV); GM Component Supply Agreement (GM to JV); Toyota Service Parts Agreement (Toyota to JV and/or GM); Technical Assistance and License Agreement; Realty and Other Asset Sale and/or Lease Agreements; Product Responsibility Agreement; and other documents related to the foregoing.

Since it is extremely important that the JV begin production as early as possible in the 1985 Model Year. Toyota and GM commit their best efforts to completing such documentation by May 15, 1983. In any event, both parties agree to immediately begin the detailed production process planning necessary for conversion of the Fremont plant. Except as set forth in the separate provisions for JV buildings, machinery, equipment and tooling referred to in the "Manufacturing" section above, expenses incurred by either party which directly benefit the JV will be properly recorded and, if mutually agreed, will be subsequently rebilled to the JV.

Transaction Review

The agreements reached between the parties relate only to the manufacturing JV described above and do not establish any special relationship between Toyota and GM who continue to be competitors in the United States and throughout the world. Toyota and GM further acknowledge that there are no implied obligations or restrictions other than those expressly set forth.

This Memorandum of Understanding is subject to review by the governments of Japan and the United States. Both parties commit to use their best efforts to obtain favorable reviews. Until execution of all formal documentation, satisfaction by the parties with the results of any government reviews which are undertaken, and satisfaction by the parties with the prospects for developing an acceptable employe relations structure, each party reserves the right to terminate negotiations without liability to the other and the JV shall not be established. However, except as separately set forth in the "Manufacturing" section, the parties shall share equally the expenses and. costs incurred by the parties which would, but for such termination, be rebilled to the JV.

Governing Language

This Memorandum of Understanding shall be executed in both an English and a Japanese version, but the parties agree that in the event of a conflict between the meaning of the English text and the Japanese text, the English text shall control.

Dated: February 17, 1983. Toyota Motor Corporation. Eiji Toyoda,

Chairman of the Board.

General Motors Corporation.
Roger B. Smith,

Chairman of the Board.

Exhibit A-Market Basket Index

The best selling models among the sub-compacts will be the models which constitute the basket. The models shall be revised at every model year on the basis of model volume in the U.S., using the latest data for previous months.

For reference, the best selling models at present are as follows:

The "Index" shall be the weighted average rate of wholesale price fluctuations of these models from the prior model year to the current, weighting Corolla at % versus %% for all other comparable models combined without regard of model volumes in the U.S.

For this purpose, the wholesale price shall be adjusted by eliminating the

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value of equipment changes and product
improvements in comparison with the
previous year models. To this end, the
JV will evaluate and determine the
value of equipment changes and product
improvements, taking into account the
opinions of Toyota and GM.

When competitive models are
replaced by new models, or additional
competitive models are brought in,
neither the old model nor the new or
additional model will be included in the.
calculation of the Index for the model
year when such model changes take
place. It will, however, be included in
the calculation of the Index for
subsequent model years.

Analysis of Proposed Consent Order To
Aid Public Comment

The Federal Trade Commission has provisionally accepted an agreement to a proposed consent order with General Motors Corporation and Toyota Motor Corporation.

On December 22, 1983, the Commission entered into a consent order agreement with General Motors and Toyota in settlement of a proposed complaint. The proposed complaint alleges that the formation of a joint venture by General Motors and Toyota, as proposed in a Memorandum of Understanding executed by the two companies on February 17, 1983, would violate Section 7 of the Clayton Act and section 5 of the Federal Trade Commission Act. The Memorandum of Understanding. with certain limited confidential commercial and financial information deleted, is attached to the proposed complaint.

Specifically, the complaint alleges that the proposed joint venture would substantially lessen competition in the manufacture and sale of small new automobiles in the United States and Canada because there are no limitations on the number of vehicles to be jointly produced and no adequate safeguards on the types of information to be shared by the two companies. Small

automobiles are automobiles commonly referred to as subcompact, compact, and intermediate sized automobiles. Both General Motors and Toyota are major competitors in the manufacture and sale of small new automobiles.

The proposed consent order has been placed on the public record for sixty (60) days in order that interested persons may comment on it. Comments received during this period will become part of the public record, unless persons commenting request that their comments be afforded confidential treatment. After sixty (60) days, the Commission will

review the agreement and the comments
received and will decide whether it
should withdraw from the agreement or
make final the agreement's proposed
order.

According to the proposed complaint.
GM and Toyota will hold equal equity in
the joint venture and each will appoint
half of the board of directors. Toyota
will appoint the chief management
personnel for the venture. The joint
venture will manufacture subcompact-
cars that will be designed by Toyota in
consultation with GM.

The introductory paragraph of the
order defines the terms used in the
order. "New automobiles" are defined
as new passenger automobiles,
including light trucks and vans,
manufactured or sold in or shipped to
the United States or Canada. The order
defines "module" as an integrated
manufacturing facility capable of
producing no more than approximately
250,000 vehicles per year.

Paragraph II of the proposed order
limits the proposed joint venture to the
manufacture for or sale to General
Motors of automobiles derived from a
Toyota model currently sold in Japan,
the Sprinter, and produced by a single
module, i.e., no more than
approximately 250.000 vehicles per year.
Paragraph III limits the period during.
which the joint venture may
manufacture automobiles to twelve (12)
years from the date the first automobile
is manufactured or December 31, 1997, .
whichever time comes first. The joint
venture may continue beyond that
period only as necessary to wind up its
affairs, dispose of its assets, or provide
for continuing warranty or servicing of
vehicles produced by the joint venture.

Paragraphs IV and V prohibit the
transfer or communication of
information between General Motors.
Toyota, and the joint venture that is not
reasonably necessary to accomplish the
legitimate purposes of the joint venture.
Under Paragraph IV. the companies may
not transfer or communicate the current
or future prices of new automobiles or
component parts produced by General
Motors or Toyota, except pursuant to a
supplier-customer relationship entered
into in the ordinary course of business.
The companies are also forbidden to
transfer or communicate information
relating to current or future sales or
production forecasts or plans for any
product not produced by the joint
venture, as well as information relating
to current or future marketing plans for
any product, including products
produced by the joint venture.

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Paragraph IV allows the companies to exchange information relating to product costs, but only as provided in Paragraph V.

Paragraph V allows the companies to transfer or communicate certain information, but only to the extent necessary to accomplish the legitimate purposes of the joint venture. Thus, the companies may exchange information relating to the design, development, or engineering of the product produced by the joint venture; sales or production forecasts or plans for the product of the joint venture; and costs of General Motors or Toyota products supplied to the joint venture.

Paragraphs VI and VII will enable the Commission effectively to monitor compliance with the order. Paragraph VI requires the companies to maintain complete files and records of all correspondence and communications concerning information described in Paragraph V; to maintain logs of all meetings and nonwritten communications concerning information described in Paragraph V; and, for a period of six (6) years, to make such files, records and logs available to the Commission on request. Paragraph VI also requires that management employees of the joint venture and employees of General Motors and Toyota having responsibilities for the joint venture affirm annually that they have read the order and intend to abide by its provisions.

Paragraph VII requires General Motors and Toyota individually to submit annual written reports to the Commission setting forth its past. current and intended compliance with the order, and to provide any additional information reasonably required by the Commission.

Paragraph VIII requires General Motors and Toyota to notify the Commission in advance of any changes in their respective organizational identities or structures, or in the organizational identity or structure of the joint venture, that might affect compliance with the order.

Finally, Paragraph IX provides for self-executing termination of the order five years after the joint venture has finally ceased to manufacture or sell automobiles.

The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of

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