Trade Secrets

GM vs. VW


While tension always existed between General Motors German branch, Opel, and VW, this greatly increased when Jose Lopez left GM for VW in March of 1993, taking 7 other GM managers with him. GM felt betrayed not only because they had expended a great deal of effort to keep Lopez, but due to a large number of confidential documents that left with him.

Early attempts by GM to keep VW from hiring the managers were not effective.

Soon, the case came to focus on the missing documents. Some of these documents were found as early as June of 1993 in the home of one of Lopez's aids, who had copied them at Lopez's request. The finding of these documents l ed to an early investigation by the Justice Department.

The intial stance (August, 1993) of VW was that while the GM employess had taken documents with them, they had proceeded to destroy those documents to keep them from being distributed at VW. By November of 1993, VW released an auditperformed by themselves indicating that the held none of GM's documents. Opel, not surprising, resp onsed harshly to the thought the VW could police itself regarding the missing documents.

Both GM and VW took risks in filing the suit and not settling, respectively. GM risked its sales in Europed by possibly producing an image as the evil "American bully" out to fight the competitio n. On the otherhand, VW saw potential damage to its U.S. sales in a prolonged battle.

GM eventually won out by choosing to file a second suit in Detroit which would bring more publicity against VW to American ears. In addition, they outlined in detailed the documents which had been taken. VW agreed to pay G.M. $1.1 billion.

Lopez quit VW in November of 1996 and formed his own firm, conducting seminars in company turnaround. He and 3 of the other managers who left still face criminal charges in Germany, which Lopez continues to deny.


Articles

  1. Micheline Maynard,"Lopez confident he'll rebound 'Manipulated controversy'," USA Today, Sec. Money, Pg. 3B, 14 March, 1997.

  2. Edmund L. Andrews, " International Business: None Prove So Stubborn as a Giant Spurned; G.M. Never Wavered in Its 4-Year Fight Over Executive Who Defected to VW," The New York Times, Sec. 1; Pg. 37, Col. 2, Business/Financial Desk, 11 January, 1997.

  3. Micheline Maynard, "$1.1 billion TRUCE Surprise End to Feud over Trade Secrets," USA Today, Sec. Money, Pg. 1B, January 10, 1997.

  4. Ferdinand Protzman, "Company News: Small Setback for G.M. in Feud with VW," The New York Times, Sec. D; Pg. 3, Col. 3, Financial Desk, 17 December, 1993.

  5. Ferdinand Protzman, "Study by an Auditor for VW Finds No Sign of Espionage," The New York Times, Sec. 1, Pg. 35, Col. 1, Financial Desk, 27 November, 1993.

  6. Ferdinand Protzman, "G.M. Papers Destroyed, VW Admits," The New York Times, Sec. D, Pg 2, Col. 1, Financial Desk, 9 August, 1993.

  7. Ferdinand Protzman, "Lopez Battle Intensifies; Perjury Inquiry Is Begun," The New York Times,Sec. D, Pg. 2, Col. 5, Financial Desk, July 30, 1993.

  8. Blair S. Walker, " Lopez could face criminal charges," USA Today, Sec. Money, Pg 2B, 19 July, 1993.