WASHINGTON - Ford Motor Co. could monopolize the market for Ford vehicles in Indianapolis and Salt Lake City without facing much of a fight from the federal government.
In each market, Ford plans to establish a new venture, jointly owned by dealers and the company, to acquire control of its dealerships. Ford would have controlling interest.
Because of the size of the transactions, the deal would face federal review under the Hart-Scott-Rodino Antitrust Act.
The company refused to discuss legal implications of the mergers.
Generally, the Federal Trade Commission considers a merger anti-competitive if the combined companies can raise prices more than 5 percent without facing lower-priced competition.
'We would ask what consumers could turn to as a substitute,' said Joe Krauss, assistant director of the FTC's premerger notification office. 'Would consumers then shift to buying Chevrolets? If there would be enough consumers who would switch to Chevrolets, that would defeat the price increase and make it unprofitable.'
Because Ford would control only the market for Ford Motor Co. vehicles - and not the entire market - the transactions are not likely to be considered antitrust violations, said an antitrust attorney for another automaker who asked not to be named.
The federal government might even view Ford's dealership venture as an improvement in operating efficiency that could reduce prices, Krauss said.