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described a device for the reduction of oxides of nitrogen developed at the Cornelius laboratory which tested well below the 350 parts per million standard established by the State of California, and reduced NOx emissions 85%. The cost of this device to the consumer is negligible. (Tr. Vol. XIX, pp. 129132; Tr. Vol. XIX, p. 128).

Mr. Cornelius is a well-known inventor, formerly associated with the Holley Carburetor Company, who has done extensive work on research and development of motor vehicle air pollution control systems and devices. (Tr. Vol. IV, pp. 51-52).

The automobile industry was notified of the existence of the Cornelius device in the latter part of 1960 (Tr. Vol. XIX, p. 134), yet none of the companies took any particular interest in the device, and the impression Jesser had of the Ford attitude toward his device was that "this is a sort of nuisance." (Tr. Vol. XIX, p. 148). There were no tangible offers or responses from any automobile manufacturer. (Tr. Vol. XIX, p. 141).

Robert Van Derveer of American Motors testified on June 29, 1967 that none of the automobile manufacturers have come up with a device or system to control the emissions of oxides of nitrogen. (Tr. Vol. XXXXVI, p. 34).

DIESEL ENGINES

Contrary to popular belief, diesel engines do not emit hydrocarbons or carbon monoxide as do gasoline engines; they do, however, emit irritating smoke and odor. Here again, only lip service was given to correcting the problem.

In a statement made before the Muskie Committee (GJ Ex. 429, at p. 931), Dr. P. H. Schweitzer of Schweitzer & Hussmann, State College, Pa., a recognized authority on diesels, said in part:

"I shall not absolve the diesel engine of its polluting effect. I have raised my voice repeatedly in the past against diesel exhaust smoke and odor. In September 1954, at the fifth international symposium on combustion, in Pittsburgh, Pa., I said:

"Even enlightened self-interest should induce the industry to take this matter [noise, smoke, and odor] seriously, more seriously than it has in the past. It is easy to predict that government-State or municipal-will soon act if we do nothing about it. An incensed public may force legislators to enact unwise laws to the detriment of all of us.'

"The Automobile Manufacturers Association, which received a copy of my talk, took my advice to heart and formed a task force on diesel emissions. When? Ten years later, in March 1964."

Our expert. Wallace Linville, testified as follows on this problem:

"Q. Can you tell us of any other methods. which could have been used since 1955 to reduce smoke and odors?

"A. There are several. Lubribol has to do largely with the control of smoke. It is a fuel additive and very adequate for the control of smoke. It has very little effect on odor. The fumigation I described a few days ago is a means of getting better combustion in the combustion chamber of the diesel engine and this is utilized in controlling both smoke and odor, and the first paper that was written on this by Mr. Schweitzer was in 1957 entitled "Fumigation Kills Smoke." Mr. Schweitzer was with the Penn State University at that time." (Tr. Vol. XXXXVII, p. 7). No manufacturers of diesel engines have utilized Lubrizol or other types of afterburners satisfactory in both smoke and other control, except from the economic standpoint. (Tr. Vol. XXXXVII, pp. 8-11).

OTHER APPROACHES

Reliance on the agreement not to compete in the research, development, manufacture and installation of air pollution control

equipment apparently enabled the automobile manufacturers to disregard several other approaches to the problem, thus further delaying its solution.

For instance, in the late 1950's Ralph Heintz, inventor, developed and patened a stratified charge engine (Tr. Vol. VIII, pp. 10, 12, 25-27) which reduced hydrocarbon, carbon monoxide, and oxides of nitrogen emissions, while at the same time effecting a savings in gasoline consumption (Tr. Vol VIII, pp. 22-25). Moreover, the stratified charge engine would replace the conventional engine with little or no additional cost to the consumer (Tr. Vol. VIII, pp. 2729). The development of this engine was publicized generally so that the automobile manufacturers knew of its existence and what it would do (Tr. Vol. VIII, pp. 13-18, 30-31). In fact, Victor G. Raviole, former executive director of the Ford engineering staff, stated on several occasions in the early 1960's that the major automobile companies were investigating such an engine and on one occasion predicted that it might be ready for production before 1965 Tr. Vol. VIII. pp. 29-30, 33; GJ Ex. 607). However, the automobile manufacturers have evidenced little faith in this approach and no such engine has been produced by any of them (Tr. Vol. VIII, pp. 16, 33-35, 38-39; Tr. Vol. XXXI, pp. 166-168: Tr. Vol. XXXII, pp. 158-160; Tr. Vol. XXXV, pp. 158-159).

Similarly, George Cornelius has developed and patented a direct flame afterburner and an exhaust recycling unit which have proven effective in reducing hydrocarbons, carbon monoxide, and oxides of nitrogen (Tr. Vol. IV. pp. 61-64, 77-79; Tr. Vol. XIX, pp. 130131). A test by Scott Laboratories shows that with this afterburner hydrocarbons were reduced to 28 ppm and carbon monoxide to 0.95% from 620 ppm hydrocarbons and 4.65% carbon monoxide (GJ Ex. 62). Mr. Cornelius estimated that, if produced in large volume, the combined package (afterburner and recycling devices) would cost the motor vehicle manufacturers about $25 to put on new cars (Tr. Vol. IV. p. 92). However, the major automobile companies have exhibited little or no interest in these devices for controlling automotive pollution (Tr. Vol. IV. p. 57; Tr. Vol. XIX, pp. 132, 134, 141-142. 151). In fact, at a meeting in December, 1963, William Gay. Executive Engineer, Engine and Foundry Division, Ford Motor Company, told Albert Jesser, an employee of Cornelius, that "[1] General Motors and Chrysler do not control their exhaust, we can do nothing and be competi tive" (Tr. Vol. XIX, p. 148). Mr. Gay also stated that if the entire package would cost more than $5, Ford would not be interested (Tr. Vol. XIX, also at p. 148).

Several other approaches to the automotive pollutant emissions problem have apparently received little interest from the automotive manufacturers. Phillip S. Osborne of Raymond G. Osborne Laboratories developed and patented in the early 1960's a preinduction smog control concept which effectively reduced hydrocarbons, carbon monoxide, and oxides of nitrogen (Tr. Vol. XI, p. 20). The estimated manufacturing cost of the Osborne device was about $15. (Tr. Vol XI, p. 39). Again, the automobile manufacturers exhibited little interest in this approach (Tr. Vol. XI. p. 31: Tr. Vol. XII, pp. 14, 16, 24), and what interest was shown by the Ford Motor Company was coupled with indications that Ford would try to circumvent Osborne's proprietary position if the concept proved effective (Tr. Vol. XI, pp. 28-31; Tr. Vol. XII, pp. 10, 21).

Mr. Leslie Fox of S-C Carburetor. Inc. developed and patented in the late 1950's and early '60's a unique carburetor which effectively reduced hydrocarbons, carbon monoxide, and oxides of nitrogen while also eliminating evaporative losses, at a manufacturer's cost of about $6. (Tr. Vol. XXXIV, pp. 7-9, 13-14, 19). The automobile manufac

May 18, 1971

turers have shown little or no interest in this device. (Tr. Vol. XXXIV, pp. 16, 21-22).

In sum, although various approaches to the motor vehicle pollutant emissions problem have shown considerable promise, the automobile companies apparently have done little with them. It seems likely that the reason for this attitude is the fact that the AMA cross-licensing agreement placed the automobile producers in a position where they did not have to fear that a competitor would develop an effective device or system for its exclusive use which might become required equipment and thus put the others at a competitive disadvantage.

BOYCOTT

As to the alleged agreement not to purchase or utilize any device developed by a non-signatory to the cross-licensing agree

ment:

The automobile companies, through AMA, announced in March, 1964 that a target date had been set for the installation of pollution control devices on 1967 model automobiles. The MVPCB of California then approved four devices developed by independent manufacturers (American Machine and Foundry Company-Chromalloy; Universal Oil Products-Arvin Industries; W. R. Grace & Company-Norris-Thermador Corporation; American Cyanamid Company-Walker Manufacturing Company) which, under California law, made the installation of pollution control equipment mandatory on 1966 production. Instead of utilizing any of the approved devices, all auto companies utilized devices or systems which they themselves developed.

Dr. Askew, a member of the MVPCB since its inception, testified that the systems utilized by the industry in 1966 and 1967 did a better job than the catalytic devices approved by the board. He stated further that while the board was not satisfied with these catalytic devices, it approved them and thereby forced the industry to put on its own systems. Thus the California board's approval of these devices was calculated to and did put pressure on Detroit in order to force them to install pollution control equipment. (Tr. Vol. XXXVIII, pp. 16-17).

While it is true that all of the automobile companies used systems developed by themselves, we do not think that any inference of a boycott can be drawn from this circumstance. From the standpoint of simplicity and performance these systems at least compare favorably with the devices developed by independent manufacturers. From the standpoint of cost, too, these internally developed systems compare favorably. (Fisher, Tr. Vol. XXXXIV, p. 44). Even assuming that testimony could be developed which would justify a conclusion that the independent devices were better (and cheaper) than the systems utilized, we still believe we would need more direct evidence of an agreement among the auto companies to establish a boycott.

Nor do we believe that the evidence warrants the conclusion that the independent device manufacturers did not know long before the middle of 1964 that the auto companies possessed capability to solve the problem. AMF-Chromalloy developed perhaps the best of the four independent devices mentioned above. In a letter to the MVPCB dated October 29, 1964. Lipchik of Chromalloy stated that the auto companies "have no intention of using the AMP/ Chromalloy device" or any of the other independent devices approved by the board. (Tr. Vol. XVI, pp. 84-85).

This conclusion was based on reports received from his men in the field. The specific conversation with an industry representative upon which this statement is most likely based took place on June 24, 1964 between Chandler of Ford and Ulyate of AMP.

Ulyate testified in this regard as follows:

A. I felt that he said in general Ford would not use anybody's device, particularly " (TT. Vol. XIII, p. 58).

Although Ulyate does not recall Chandler mying so, be received the impression from Chandler that neither Ford nor any other company would buy the AMF device. (Tr. VOL XVI. p. 125).

This impression was strengthened by other observations contained in a trip report Ulyate made to Lipchik after a June 24-27, 1964 visit to Detroit, which reads in pertinent part as follows:

"In general Ford personnel not very receptive to device concept. They indicated that they doubted any device would ever be installed on a Ford car.

"My impression was that they were just going through the motions in even considering an evaluation. With their attitude, I don't see how they can give a fair evaluation to the burner." (GJ Ex. 171).

Mr. Van Derveer testified, however, that American Motors was seriously considering ting the AMP device (Tr. Vol. XVI, p. 116), but that it could not have been engineered Into American's production in 1966. (Tr. Vol. XXXXVI, p. 133). After an extensive evaluation, Van Derveer stated, AMF "fell flat on their face" (TY. Vol. XXXXV, p. 154). Van Derveer also testified that after an evaluation of the Norris and Walker devices it was determined that they were inadequate for American Motors 1966 needs. (Tr. Vol. XXXXXV. pp. 154-155). As to the last of the four approved devices, Van Derveer testified that UOP would not "have any part of" American Motors (Tr. Vol. XXXXV, p. 155).

Ervin C. Lentz, Manager, Advanced Development and Smog Engineering, Walker Manufacturing Company, testified that as far back as 1960 the automobile companies made it clear that they were interested primarily in their own systems; that the only time they would utilize an independent device was if either their own systems would not work or if the independent device was better or cheaper. Lentz further testified that it was the hope of manufacturing a better and cheaper device that kept Walker working in the air pollution control field, so a not to lose its position as a supplier of mumers to the automobile industry. (Tr. Vol. XXVI, p. 93).

Ward B. Sanford, Manager, Ceramics Projeet. 3M Company, testified that his company was told by General Motors in early 1962 that the engine modiâcation approach was more practical and a better potential answer to the emissions problem than were the socalled tack on devices. (Tr. Vol. XIX, pp. 67

Grand Jury Exhibit Number 421, dated April 25, 1960, a TRW document, which reads in pertinent part as follows, throws further light on GM's attitude: "The job of emison should eventually be controlled in the engine, and some engines are nearly good enough now."

Grand Jury Exhibit Number 422, dated June 9, 1961, & TRW document, also states la pertinent part as follows:

"Chayne of General Motors has informed Mr. Riley that their attempts to solve the problem in a different way probably at the engine, have had considerable success, and they expect this work to be completed in a month or so, and would inform TRW of the results at the proper time. Ergo, General Motors is not very interested in regenerative drect fame afterburners."

In September, 1963 Chrysler told AMP that its Cleaner-Air-Package would solve the problem for them. (Tr. Vol. XVI, p. 62). Chrysler even submitted its CAP to the MYPCB for approval in July, 1963. Approval of the CAP system was not, however, forthcoming from the board until late in November, 1964.

quotation indicates that as of March 9, 1964, AMA felt that the catalytic devices approved by the MVPCB would not be used by the automobile manufacturers. Grand Jury Exhibit 402, an AMA document quoted in part, supra, at p. 42, states further in pertinent part as follows:

"It would be very much to our advantage to avoid this topic-shrug it off or ignore it for a month or two. In the interim a lot of things might change in the picture, including even the withdrawal of the catalytic devices now on tests when the submittors analyse the future possibilities for themselves." (Emphasis added.)

It is apparent, also, that AMA's activities were designed to discourage indepedent manufacturers from proceeding with certifcation, as is evidenced by the reaction of persons connected with independent concerns. In a report dated May 26, 1964, Mr. D. A. Hirschler of the Ethyl Corporation wrote as follows concerning his contacts with AMA:

"With the present likelihood that competitive exhaust devices may be approved in June and our own device late in 1964, all of the automobile manufacturers are making major efforts to find alternate mechanical routes to emission reduction for use in 1967 models, to forestall the mandatory use of the approved exhaust devices. The current thinking is that with this work in progress, no manufacturer of an approved device is likely to make his device available for a possible one-year market on 1966 models." (GJ Ex. 223).

Grand Jury Exhibit Number 418, dated May 21, 1959, a TRW, Inc. document also quoted in part, supra, at p. 46, states further in pertinent part as follows:

"Mr. Chandler asked that he be given some time in which to explore this subject among the AMA. He explained that the smog working group, of which he is Vice Chairman, reports directly to the Board of the AMA, which includes Mr. Ford, Mr. Curtice and Mr. Colbert among its members. He implied that few people in the automobile industry appreclated the problem. One function of the AMA working group, he said, had been to 'contain' the problem. His own view was that the smog problem is not bad enough to warrant the enormous cost and administrative problems of installing three-million afterburners."

"A. What I can distill from a collection of instances, no single one of which I can refer to, was that they were cooperative in making sure that no device was forced upon the automobile industry that would compromise the vehicle. This is the language; this is their position. In other words, they would like to see the problem go away and they stated again and again in all these discussions if there was a device and it was cheap enough and it didn't compromise the vehicle in any way and had no hazards they would be right up front, but what they had done collectively, you know, was to organize to make sure that all of these criteria, performance, of no compromise to the vehicle, of safety, any reasonable critera that could be put up, cost, these barriers they were cooperating in. They were acting in concert. They made organizations whose purpose was to do these things. They spent money, lots and lots of money on instrumentation, on test tracks, on environ

The underscored portion of the following mental places, dynamometers, to see whether

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the afterburner would work when the temperature was 120 degrees Fahrenheit in a driving rainstorm." (Tr. Vol. XXIV, p. 77).

Ridgway also testified as follows on the meaning of "contain" the problem as attributed to Mr. Chandler:

"A. Well, no, I got the-the attitude was here was an attitude: I don't know whether it was wholly Chandler's, but between Chandler and Gay, they said that they spent lots and lots of money in the development of deceleration devices, because it was believed that deceleration was 'the' problem.

"And so, everybody had a deceleration device, and, lo and behold, it turns out that deceleration wasn't the problem. So, they had spent all this money for nothing.

"So, therefore, they had been burned. And they were going to make absolutely sure. first, that the problem was really well understood, and that no device that would cause any detriment to the performance of the car, or anything, would be forced down their throats.

"So, it was clear that, from their point of view, this thing was a defensive organization." (Tr. Vol. XXIII, p. 24).

As to an agreement among the signatories to the cross-licensing agreement to eliminate the competition of third parties in the development of motor vehicle air pollution control equipment, the evidence is as follows:

Dr. Ridgway testified that Woodrow F. Gaines, also a TRW employee, told him that a Ford executive (Gaines' stepfather) reported that GM had, in 1961, increased its valve purchases from TRW by 25% in return for TRW going "slow" on development of its pollution control device. (Tr. Vol. XXIII, pp. 50-56; Tr. Vol. XXIV, p. 327). Mr. Gaines, now employed by the Missile Division, Chrysler Corporation, testified that the source of this report was another TRW employee, a technician in the automotive research lab, whose name he could not recall, and that he was not a Ford executive 10 (Tr. Vol. XXXIII, pp. 13-15). He also testified that as the story originally came to him, the increase in orders was for wetens not valves, and the increase was in payment of patent rights purchased by GM from TRW. (Tr. Vol. XXXIII, pp. 10-11).

In response to our additional subpoena duces tecum, TRW supplied us with the numbers of units and dollar amounts of sales to GM for valves and pistons for the years 1959, 1960, and 1961. Taking 1959 as the base year, GM's valve purchases from TRW increased by approximately 19% in 1960, and declined by a minimal amount in 1961. In 1959, GM purchased no pistons from TRW. In 1960, GM purchased $8,540 worth. In 1961 the amount purchased was $250,321. Total industry passenger car sales in the United States in 1960 were approximately 19 ahead

of 1959 sales, and 1961 sales were a minimal amount below the 1959 sales. It is apparent that the GM increase in valve purchases from TRW in 1960 can rationally be accounted for by a rising sales increase. It is further apparent that the 1961 valve purchases followed industry sales closely. At the same time, from 1959 to 1961, GM's share of the market increased from 45.7% to 49.3%. One might even have expected that valve purchases from TRW would have increased. As for the increase in piston sales by TRW to GM in 1961, the total sales figure of $250.321 seems much too low a "compensation" for TRW to go slow on a program in which they had spent approximately $1 million.

Additional witnesses from TRW were called before the grand jury but shed no light on any pressures applied to TRW by automobile companies in this field which are based upon TRW's position as a supplier of products to the automobile industry. Thus we have not developed evidence that any signatory to the cross-licensing agreement atFootnotes at end of article.

H 4074

tempted in any way to interfere with the efforts of any of the four independent device manufacturers in developing pollution control equipment, whether or not such persons were suppliers of products to the automobile industry. Moreover, the evidence does not show that the industry announcement of the 1967 target date and subsequent utilization of their own systems on 1966 models was a concerted effort by them to boycott the devices approved by the MVPCB of Califor

nia.

As a matter of fact, continued work in the air pollution control equipment field by outside concerns has been prompted by encouragement from the automobile industry. Mr. M. F. Venema, President and Chairman of the Board of Directors of Universal Oil Products Company, (UOP), testified that General Motors told them that they will need a device in addition to their air injection systems in order to meet future criteria. (Tr. Vol. XXXIX, p. 44). UOP is now supplying GM with catalysts. (Tr. Vol. XXXIX, p. 43). Venema stated that the industry's attitude is much better today than it was years ago in that the industry now feels it can gain from outsiders as compared to "their feeling a few years back that the outsiders were more intruders than helpers." (Tr. Vol. XXXIX, p. 43).

With respect to various aspects of the entire situation under investigation here, some significant admissions by John D. Caplan, head of the Fuels and Lubricants Department, General Motors Corporation, and former Chairman of the VCP, are contained in Grand Jury Exhibit Number 491, dated December 9, 1965. Mr. Caplan's remarks are in response to a request by Louis C. Lundstrom, Director. Automotive Safety Engineering. GM, for Caplan's review of and comments on Chapter 4 of the book entitled "Unsafe at Any Speed" by Ralph Nader. Chapter 4. deals with the subject "The Power to Pollute." Caplan prefaced his specific comments by stating that "you will note that I have not limited my review only to criticisms of the chapter but have also acknowledged areas wherein Nader's comments may be valid." (Tr. Vol. XXXV, p. 55; GJ Ex. 491). Referring to specific pages of the book. Caplan made inter alia the following comments:

Page 101: "(a) The million dollar a year industry expenditure cited on this page is optimistically high for the 1953 era. (GJ Ex. 491, p. 3; Tr. Vol. XXXV, p. 55)."

Page 105: "Nader's statement that the Callfornia MVPCB action in certifying the four devices 'moved' the automobile industry management to up the target date from the 1967 to the 1966 model year appears valid. However, he fails to point out that this could be done only after the MVPCB cooperated to the extent of allowing exemptions for the 1966 model year on many engine-transmission combinations." (GJ Ex. 491, pp. 3-4; Tr. Vol. XXV, p. 56).

Page 106: "(a) The comment that the industry was guilty of 'only speaking with one voice in the automotive air pollution area is true. Although individual company technical personnel were allowed to present 'company technical papers, essentially all other types of pronouncements emanated only from AMA statements." (GJ Ex. 491, p. 4; Tr. Vol. XXXV, p. 56).

Page 107: "Mr. Nader's remarks concerning the basic issue (paragraph 3) appear to be the crux of this chapter. His criticism of the lack of recognition of the problem and lack of work on the problem by the industry is easily refuted. Where we must give the 'devil his due' is in the area of implementation of our findings. Does such implementation occur only in response to legislative pressure and public criticism? Development of material to refute this criticism is dimcult." (GJ Ex. 491, p. 4; Tr. Vol. XXV, p. 57).

FOOTNOTES

1 Mountains surround the Los Angeles basin on three sides with but one outlet to the ocean. This basin also has a unique condition called temperature inversion. Ordinarily the air becomes cooler the higher it rises. In the Los Angeles area, during inversion periods, the polluted air is trapped beneath an invisible ceiling of warmer air thus preventing the normal upward flow of air pollutants to a level where it would be dissipated or diluted. Thus a concentration of air pollutants occurs to varying degrees, depending upon the height of the inversion lid Too, in this area, weak winds prevail which at times stagnate completely, lacking the velocity to blow the pollution rapidy out of the basin, thus giving the abundant sunshine of southern California ample time to produce the photochemical reactions between the pollutants more fully defined herein as "smog."

Los Angeles County has the highest registration of cars per person (2.3 persons/car) of any county in the United States.

As late as July 30, 1963 Motor Vehicle Pollution Control Board (MVPCB) officials visiting Detroit were told: "based on the time that it takes to develop any new innovation in motor car design, the solution of the smog problem by the automobile industry was probably 7 to 10 years away. ." (TT. Vol. XXXVIII, pp. 7-9; GJ Ex. 227). As hereinafter shown, the industry was able to and did install exhaust systems or devices in late 1965 on 1966 models when forced to do so.

AMA now employs a full-time president. (Tr. Vol. XVIII, pp. 54-55; GJ Ex. 300). The cross-licensing agreement provides

as follows:

"ARTICLE V-EXCHANGE OF TECHNICAL DATA AND INFORMATION

"Each of the parties hereto further agrees to exchange through its authorized representative with representatives of the remaining parties hereto all technical data and other information pertaining to sald Licensed Devices. Such exchange of technical data and other information shall be conducted under the direction of the Vehicle Combustion Products Subcommittee of the Engineering Advisory Committee of the Automobile Manufacturers Association." (GJ) Ex. 263, 264, 265, and 266).

The significance of the AMA Suggestion Submission Agreement is illustrated by the following pertinent excerpt from a letter of October 7, 1960 written by R. H. Isbrandt, Director. Automotive Engineering, American Motors Corporation:

As explained in our meeting on September 21st, the automotive companies, working through the Automobile Manufacturers Association, have agreed that the treatment of exhaust gas is an industry problem which will be handled on a cooperative basis. The A.MA Submission Agreement was developed to be used by all automobile comapnies in evaluating exhaust devices which are submitted for test. This assures that there will be an interchange of information between the automobile companies and that no one company will attempt to take competitive advantage of any solution which is developed in our current test program. For this reason we have requested that you sign the A.M.A. Submission Agreement. Other suppliers, including chemical manufacturers have signed this agreement recognizing that there is no desire on the part of any automobile company to do anything that would be detrimental to any supplier who can come up with a solution to this problem." (GJ Ex. 534).

When an attempt was made in 1963 to broaden the scope of the cross-licensing agreement "to overcome the restrictions that are currently preventing adequate discussion of technical steps that will lead to solutions"

May 18, 1971

(GJ Ex. 305) the attempt was defeated by the opposition of GM. This is explained in a GM internal communication from H. F. Barr, its member on the EAC, dated May 6, 1965, "Subject: G.M. Policy on A M.A. Vehicle Combustion Products Com. Work" as follows:

"2. In an endeavor to permit technical discussion, the Engineering Advisory Committee of A.M.A. asked the A.MA. Patent Committee to propose broader language for the agree

ment.

"3. In subsequent review of this proposed action for the A.M.A. Board of Directors, in our Engineering Policy Group meeting of March 20, 1963, our management reaffirmed that the AMA agreement should not be changed in this way. On April 30, the E.A.C. further discussed this proposal, with G.M. being the only member opposed to extending the agreement to other areas.

"4. The basic trouble with this problem is the involvement of (1) an established crom licensing agreement for hardware now established, with (2) a need for technical discussion and exchange of information in broader areas. We feel that these are two separate items and need not be combined in a new, broader cross licensing agreement for non existent hardware." (GJ Ex. 325).

The fact that on occasions the per was offered as optional equipment indicates the ability to supply this air pollution control equipment, yet the auto manufacturers did not install them on all models quite evidently because of the agreement previously referred to.

This illustrates that bar an agreement, competition to research, develop and manu. facture pollution control devices would stimulate and compel rather than delay the installation of devices by all companies. (Tr Vol. XXX, p. 147).

The testimony was that this technician was known as "Olie." We called a TRW of cial named Ohly as a witness, but ascer. tained that he was not the person involved. We have learned since the last grand jury session that the person involved is Merle E. Olson of Chesterland, Ohio. From our ex. perience in this matter, however, we doubt that his testimony will be helpful.

"California State regulations permitted only 2% exemptions, At most less than 45% were exempted (Askew, Tr. Vol. XXXVIII, p. 22).