VW Says No Discussions Toward Out-of-Court Settlement with GM

12/05/96

Reuters reports that James Denvir, a Washington, D.C.-based attorney representing Volkswagen in the U.S. civil suit that GM has brought against it, said that the german automaker is not currently negotiating an out-of-court settlement in the case.

GM's suit against VW alleges that VW, its former production chief, and seven of its other executives engaged in industrial espionage against GM. GM charges that former VW production chief Jose Ignacio Lopez de Arriortua masterminded and helped commit the theft of secret GM documents in 1993 when Volkswagen hired him away from GM.

Lopez resigned from VW recently, fulfilling one of three demands that GM made as a pre-requisite to any possible out-of-court settlement. The move, which followed a report in Germany's Der Spiegel magazine that said the two feuding automakers were secretly negotiating a settlement, fueled speculation that a settlement was possible. So far all three of the automakers involved in the case (GM, VW, and GM's German subsidiary Adam Opel) have denied any discussions about settling out-of-court.

Both VW and Lopez have denied any wrongdoing. The VW denial was issued at a press conference after the two parties met in court earlier this week for a scheduling conference. Both GM and Opel have denied negotiations since the Spiegel report was published before Lopez resigned last week.

U.S. District Judge Nancy Edmunds, who is presiding over the case, has denied most of VW's attempts to dismiss the charges. Most significantly she has ruled that GM may pursue the industrial espionage charges under the auspices of the RICO act, which could result in triple damages, and she rejected VW's motion to dismiss charges that it violated copyright, trademark, and unfair competition laws. Edmunds told both parties that they needed to complete the first phase of discovery by the end of February 1997, and scheduled depositions to strart in March.

At the press conference after the scheduling conference, GM attorney Michael Millikin declined to discuss an out-of-court settlement: "I'm not going to get into settlement discussions at all."

Denvir told reporters that it could take two years before the start of the trial, which would then take nine months to complete.

Paul Dever -- The Auto Channel