U.S. Will Sue to Halt 2 Westinghouse Ventures

The Justice Department said today it plans to sue to stop two planned joint ventures to sell electrical generating equipment by Westinghouse Electric Corp. and Asea Brown Boveri Inc. of Switzerland.

It said that the agreements pose serious competition problems because of the dominance of the two companies and that it will press for changes in the agreements.

The ventures involve the manufacture and sale of electric power generation equipment and related products. The department said the pacts in their current form would violate U.S. antitrust laws.

Assistant Atty. Gen. Charles F. Rule said the firms have been told of the department’s intent to sue and are trying to resolve the anti-competitive aspects of the ventures.

“The proposed joint ventures pose significant threats to competition in equipment and services necessary for this country’s production of electric power,” he said.

Rule said the joint ventures would probably mean higher rates for electricity users and higher prices for products using electricity.

The Justice Department said one of the two ventures would combine power transformer sales of the two firms and give them more than 50% of the U.S. market, which was more than $400 million last year.

The second, it said, would violate antitrust law in the manufacture and sale of steam turbine generators, the principal means by which electric power is produced in the United States.

Rule said the joint ventures as planned might substantially lessen competition in a number of U.S. electrical equipment and service markets in which Westinghouse and ABB compete.