GE GE Aerospace

By Brent Kendall 

WASHINGTON-- Electrolux AB is seeking to retract notable testimony by its chief executive in an antitrust trial where it is fighting to save its planned purchase of General Electric Co.'s appliance business, a potential setback for the company's legal defense.

A lawyers for Electrolux on Friday told a U.S. federal judge that Chief Executive Keith McLoughlin gave incorrect details on product-offering developments by competitors during testimony Thursday as he sought to rebut antitrust claims from the Justice Department. The government has sued to block the $3.3 billion deal on allegations that it will lead to higher prices for cooking appliances.

Mr. McLoughlin had told U.S. District Judge Emmet G. Sullivan that competitive pressures from Samsung Electronics Co. and LG Electronics Inc. were increasing continuously, including since the government filed its lawsuit in July to challenge the Electrolux-GE deal. In the last few months, Samsung and LG had started selling cooking ranges for lower price points such as $399 and $499, moving beyond its higher-end appliances to target value consumers, Mr. McLoughlin said.

It turns out that statement wasn't true.

"It was a misstatement," Electrolux lawyer John Majoras told the judge Friday.

Mr. Majoras said that after Thursday's proceedings, Mr. McLoughlin went back and reviewed the information on which he had based his testimony, and realized his comments were based on a misrecollection of which companies were selling products at those prices.

"He wants to correct that record, your honor," Mr. Majoras told the judge. He said Electrolux's legal team would file a motion Saturday requesting permission to introduce a new written legal declaration from Mr. McLoughlin to fix the testimony. The executive also could return, if necessary, and testify again in court, he said.

Judge Sullivan said the situation was unusual and might raise some thorny issues, but added he could "understand why in good faith somebody would go back and say, 'You know what, I was wrong on that.' "

The Justice Department has argued Electrolux and GE are dominant in the value-segment of cooking appliances because other companies such as Samsung and LG don't offer products at the lowest price-points.

That is why Mr. McLoughlin's testimony Thursday grabbed people's attention, including the judge's.

Judge Sullivan at the time jumped in with questions and comments suggesting the supposed pricing development could be an important point for the defense. It was "fairly significant testimony," the judge said Friday.

Justice Department lawyer Ethan Glass in court Friday said the government was surprised by Mr. McLoughlin's claims. He said department lawyers researched the issue overnight and found that none of the major U.S. appliance retailers were selling LG and Samsung ranges as low as $399 and $499.

Mr. Glass said it was "important for us to see exactly what Mr. McLoughlin's correction to his testimony is before we know how to proceed."

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(END) Dow Jones Newswires

November 20, 2015 20:14 ET (01:14 GMT)

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