- 22 -
manager, to accept any deal with a profit in excess of $3,000.
When the profit fell below $3,000, the dealership had to contact
Foretravel in Nacogdoches to approve the transaction. Franklin
or Moore personally had to approve any loss transaction. If a
used coach was taken in as a trade on the purchase of a
Foretravel coach, then neither petitioner nor the dealership knew
the exact profit or loss until the used coach was sold and, even
then, another used coach might be taken in as a trade.
Difficulty in predicting the resale value of a used coach added
to the uncertainty. Thus, petitioner made one yearend rebate
instead of making an immediate rebate that might have to be
reversed after the sale of the used coach. To maintain a steady
flow of coaches, petitioner would force dealers to accept
inventory so as to avoid the circumstances that petitioner faced
in 1979, when some of the independent dealers refused to accept
new inventory. This refusal interfered with petitioner's ability
to maintain steady production. Petitioner provided the
dealerships with floorplan financing in 1989 and 1990, and
petitioner charged the dealerships interest on this financing.
Thus, the additional inventory would result in additional finance
costs for the dealer. Petitioner would take the additional
inventory and associated finance costs into account when
determining the incentives owed to a dealer.
To obtain positive publicity from its customers, petitioner
would authorize a special deal on a coach for a high profile
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011