GM's Legal Fight With Volkswagen

03/12/96

Reuters reported that a lawsuit brought against Volkswagen and VW's management by GM and their German unit Adam Opel escalates a three year tussle over allegations of industrial espionage. GM has gotten frustrated by the lack of progress in a 34 month old legal action against VW in Germany, and thus has filed suit against the German automaker in U.S. District court.

GM charges that VW production chief Jose Ignacio Lopez de Arriortua and seven other former GM managers stole secret documents on purchasing and production plans when they left GM to work for VW in March 1993. GM contends that VW management hired Lopez away from GM with a $1.6 million offer and conspired in a theft scheme to steal GM and Opel documents that included cost and design information about future car programs and supplier prices for over 60,000 Opel and GM-Europe parts. GM asserts that the stolen information has helped VW cut prices and started their financial turnaround.

GM filed their complaint in federal court just days before the statute of limitations would have run out on the case. The suit requests a jury trial and is based on federal claims of racketeering, unfair competition, and illegal use of proprietary documents and Michigan state claims of fraud, breach of fiduciary duties, misappropriation of trade secrets, unfair enrichment and conspiracy.

Opel Chief Executive David Herman remarked that public prosecutors investigating the case in Germany have postponed a decision on criminal indictment of the case 4 times in the last year, and that the German Government had broken promises to help US authorities in a separate Justice Department and FBI probe against Lopez that has been conducted since 1993. A US trial would give the public and media access to documents and witness testimony that have been kept out of the public eye in Germany.

Announcement of the lawsuit occasioned a 4 percent slide in VW's share price, despite VW's statement that GM's claim is unfounded and that they will seek dismissal of the case.

Paul Dever -- The Auto Channel