CORPORATIONS: Price Fixing at G.E.?

The sharp edge to Chairman Ralph J. Cordiner's voice shocked General Electric brass at the annual management conference in Hot Springs, Va. last week. Certain G.E. officers and general managers, said Cordiner, had shown "flagrant disregard" of G.E. policy—and possibly U.S. antitrust laws—by discussing prices with competitors before they bid on big contracts for Government agencies such as the Tennessee Valley Authority. Equally grave, these men "had categorically denied any such acts" to Cordiner until months after a federal grand jury in Philadelphia began investigating; only then did they confess to him. Some of the executives, announced G.E., "have had their positions substantially downgraded, their level of compensation materially reduced, have been reassigned to positions with no responsibility for prices"—and forced to resign as officers. Others will be penalized soon. No names were mentioned, but U.S. Justice Department officials said that two G.E. vice presidents were involved.

Cordiner's warning about price fixing might have been voiced a bit sooner. The TVA has long complained about strangely identical bids. Last May it disclosed 24 cases since 1956 of matching bids—sometimes down to a hundredth of a penny—involving 47 U.S. manufacturers. On one transformer contract, for example. General Electric, Allis-Chalmers, and Mc-Graw-Edison's Pennsylvania Transformer Division each submitted bids of $112,712; Westinghouse won the contract with a bid of $86,760. This year, competing to supply 33,000 power-line insulators, G.E. and six other companies submitted identical bids; G.E. got about 45% of the order.

So far, the grand jury has heard 75 witnesses from almost every major U.S. heavy-electrical-equipment maker. It will continue investigating for another two months, then report. Said Cordiner: "Some of these associates of ours in G.E. may be found personally liable under criminal indictments which may be returned by the grand jury. Their punishment could be most severe."