1937 Questionable Business PracticesAccording to the March 10, 1937News, refrigeration dealers in Flint, MI, had a beef with the utility company, Consumers’ Power Co., over trade-in allowances. At that time, the utility handled the Frigidaire line. Several dealers handling competitors’ brands charged that Consumers’ Power allowed a 10% reduction on the list price of new refrigerators for trade-ins, and a 5% discount for a cash sale on top of that.
A couple of these dealers claimed that the allowances had been in place for several months, the independent dealers couldn’t meet such offers, and their businesses were suffering due to the effects of the strike.
The strike referred to above is the famous 1936-1937 sit-down strike in Flint, where some factory workers struck by sitting down on the job at a General Motors factory. The effects were felt by many industries in the area.
The March 3, 1937 News noted that prospective purchasers were scarce and those who already bought refrigerators were unable to make payments on time. It stated: “Even extension of payments and utilization of attractive no-down-payment selling have failed to start the ball rolling again.”
One of the city’s oldest dealers referred to the sit-down strike as the “worst thing that has ever happened to business in this town — worse than anything that happened during the Depression.”
In the March 10 article, H.W. Courville, who was then superintendent of the utility’s appliance sales, and C.J. Crusey, a member of the utility’s sales department in 1937, denied absolutely that Con-sumers’ Power offered either the 10% discount on new models when a used refrigerator was traded in, or that the utility offered an additional 5% discount for cash.
Asserted Courville, “Our trade-in policy is this: during our ‘Year-End Sale,’ which we conducted during November and December last year, we offered the purchaser a reduction of 15% on the cash price of a new Frigidaire or electric range on his old equipment, provided that his old equipment could be sold so that our net loss wasn’t over 5%.”
Courville went on to point out that the utility had given $15,000 in bonuses to Flint dealers for equipment sales placed on its power lines. For each sale of a water heater, electric range, or gas range sold by an independent dealer, the dealer was paid $10 with the understanding that this amount wasn’t to be taken off the customer’s purchase price in any way. No mention was made of a similar arrangement concerning refrigerators.
A salesman at a large dealership in the city said that the dealers who were making the claim against the utility “were themselves taking in ‘anything from grand pianos to bird cages’ at $50 to $75 as trade-ins on new refrigerators.” He also gave the opinion that sales competition was “getting dirtier by the day,” and if left unchecked, all would suffer.
Even today, dealers and utilities clash over utilities’ perceived and real business practices.
Publication date: 03/12/2001