Servicing manufactured goods Take it back. son LOS ANGELES On June 8th the Supreme Court ordered Eastman Kodak to stand trial in a competition case about the repair of expensive photocopiers. It has thrown a spotlight on the increasingly hostile relationship in America between manufacturing companies and the firms that service and repair the goods, which the manufacturers produce If firms chose to use an independent service company, it is alleged, Kodak refused to supply either the servicing firm or the customers with spare parts. In effect, Kodak was trying to get customers to agree not to employ any firms that completed with it for service contracts on the Many economists would slide with Kodak, rather than the court. They argue that customers take servicing costs into account when buying equipment, so restrictive service agreements are not necessarily anti-competitive as long as there is competition in the equipment market itself. The market for servicing high-technology electronic products alone is worth roughly $100 billion a year. Thousands of independent contractors compete for the business, but the lion's share goes to equipment manufacturers Roughly a quarter of the revenues of Americas computer makers comes from servicing and maintaining the machines they sell. Profit margins on services contracts can be as high as 50% That comes in handy when profit margins on the sale of computers are disappearing because of recurring price wars Other industries may also be affected. Detroits car makers also backed Kodak. In 1990 the etail market for car parts was worth 150 billion, about the same as that for new cars. Servicing cars came into another S 100 billion on top of that. Detroit used to be happy to leave the repair business to mom-and -pop garages. No longer. Many independent distributors of spare parts complain that the big car makers are muscling in on their business Big manufacturers in Japan and Germany service nearly all their own products. But America's high job mobility and entrepreneurial traditions have encouraged many engineers in high-tech industries to set up service firms of their own, often to the fury of their former employers Not all manufacturers are keen on the repair and service business. Makers of cheaper electronic goods, such as washing machines, television and video-recorders, find it cheaper and easier to replace faulty machines with new ones, or encourage customers to buy a new model, than to bother with spare parts. But many states in America that manufacturers honor warranties on anything they sell. To satisfy the law they have appointed the dealers and service agents. And yet because the manufacturers of electronic goods now view many of their products as disposabl they are in direct conflict with the dealers who have to provide service under those warranties Decide whether thee statements are true (v)or false (x), According to the article. 1. It is alleged that Kodak refused to supply repair firms which competed with them. L 2. It is generally agreed that Kodak acted unfairly. O 3. Most servicing of electronic equipment is done by independent contractors. O 4. US computer manufacturers earn about half their income from selling spare parts. LServicing manufactured goods Take it back, son LOS ANGELES On June 8th the Supreme Court ordered Eastman Kodak to stand trial in a competition case about the repair of expensive photocopiers. It has thrown a spotlight on the increasingly hostile relationship in America between manufacturing companies and the firms that service and repair the goods, which the manufacturers produce. If firms chose to use an independent service company, it is alleged , Kodak refused to supply either the servicing firm or the customers with spare parts. In effect, Kodak was trying to get customers to agree not to employ any firms that completed with it for service contracts on the Kodak machines. Many economists would slide with Kodak, rather than the court. They argue that customers take servicing costs into account when buying equipment, so restrictive service agreements are not necessarily anti-competitive as long as there is competition in the equipment market itself. The market for servicing high-technology electronic products alone is worth roughly ＄100 billion a year. Thousands of independent contractors compete for the business, but the lion’s share goes to equipment manufacturers. Roughly a quarter of the revenues of America’s computer makers comes from servicing and maintaining the machines they sell. Profit margins on services contracts can be as high as 50％. That comes in handy when profit margins on the sale of computers are disappearing because of recurring price wars. Other industries may also be affected. Detroit’s car makers also backed Kodak. In 1990 the retail market for car parts was worth ＄150 billion, about the same as that for new cars. Servicing cars came into another ＄100 billion on top of that. Detroit used to be happy to leave the repair business to mom-and –pop garages. No longer. Many independent distributors of spare parts complain that the big car makers are muscling in on their business. Big manufacturers in Japan and Germany service nearly all their own products. But America’s high job mobility and entrepreneurial traditions have encouraged many engineers in high-tech industries to set up service firms of their own, often to the fury of their former employers. Not all manufacturers are keen on the repair and service business. Makers of cheaper electronic goods, such as washing machines, television and video- recorders, find it cheaper and easier to replace faulty machines with new ones, or encourage customers to buy a new model, than to bother with spare parts. But many states in America that manufacturers honor warranties on anything they sell. To satisfy the law they have appointed the dealers and service agents. And yet because the manufacturers of electronic goods now view many of their products as disposable, they are in direct conflict with the dealers who have to provide service under those warranties. Decide whether thee statements are true（√）or false （×）, According to the article. 1. It is alleged that Kodak refused to supply repair firms which competed with them. □ 2. It is generally agreed that Kodak acted unfairly. □ 3. Most servicing of electronic equipment is done by independent contractors. □ 4. US computer manufacturers earn about half their income from selling spare parts. □