Electric Motor Division
The Electric Motor Division based its refusal to accept the last price reduction of the Monson
Controls Corporation on the premise that it was made as a last, desperate effort to continue supplying General Appliance with this part (Monson Controls Corporation continued to supply General Appliance Corporation with other products, although this control unit had been a major item). As support for this premise, the Electric Motor Division indicated that at the lower price it would lose money. Since it was as efficient as the Monson Controls Corporation, it concluded that Monson must also be losing money. The price was, therefore, a distress price and not a valid basis for determining an internal price. To support its case further, the Electric Motor Division pointed out the downward trend in the price of this part as evidence of distress pricing practices growing out of the excess capacity in the industry.