In April 1985, the president of the Thorndike Machining Corporation wrote to the president of the General Appliance Corporation, asking that the decision not to extend the current agreement be reconsidered. He submitted a proposed schedule of price reductions that would be made if the current agreement was extended. He stated that these reductions would be possible because (a) Thorndike would be better off obtaining a lower price than abandoning the special-purpose machinery used for transmissions, and (b) Thorndike expected increases in productivity. The proposed price reductions were as follows.