GE v Westinghouse in Large Turbine Generators

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GE v Westinghouse in Large Turbine Generators

• GEs Moves in 1963

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GEs Moves

• Price book
• Simplified pricing including examples
• Make it easy to determine GEs bid
• Lower book prices
• Create public multiplier 0.76 to discount
  book prices
• No exceptions to book x multiplier
• Price protection clause
• Audit from KPMG
• Publish list of orders and quotes

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Westinghouses Response

• Adopt GE book
• July 64 Announce price increase
• Publish orders and quotes
• 64-75 same multiplier/same book prices
• High demand period

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Key Take Aways

• Dont give up
• Clarity of pricing/threats
• Commitment in the form of price protection
• Steps to show mutual trust
• Game theory matters in turning around an
  unpromising business landscape.