Insufficient Evidence of VW Conspiracy Found
A German state prosecutor said Friday that despite a 3 1/2-year investigation, he has found “no sufficient clues” of an industrial espionage conspiracy between senior managers at Volkswagen and its former purchasing chief, Jose Ignacio Lopez.
But, as expected, Gerhard Andres, the senior public prosecutor for the state of Hessen, confirmed that he has indicted Lopez and three of his former Volkswagen colleagues on charges of embezzlement and misappropriation of trade secrets.
The indictments in the high-profile legal battle between General Motors Corp. and Volkswagen mean that German authorities support GM’s allegations that Lopez stole a large volume of important, confidential material when he defected to Volkswagen in 1993. But they say they have no solid evidence that he did so at Volkswagen’s request.
The failure to turn up a conspiracy could undercut prospects for GM’s parallel civil lawsuit against Volkswagen in Detroit, which names VW Chairman Ferdinand Piech personally as a defendant and opens the possibility of a triple-damages award against Volkswagen.
“The suspicion [of a conspiracy] was always in our heads during the investigation,” Andres told a news conference Friday in the city of Darmstadt, near Frankfurt. “The thought that Volkswagen might have participated was obvious. But I tell you, with all clarity, that although we always kept this suspicion in mind, the investigations have shown no sufficient clues that anyone from Volkswagen could have participated in the acts Mr. Lopez and his co-defendants are accused of.”
The German prosecutor’s account differs from GM’s version of events. For years, GM has made repeated allegations that Volkswagen’s top executives--including its chairman--conspired with Lopez to steal some of GM’s most precious trade secrets and bring them to Germany.
In March, GM filed a lengthy civil complaint in U.S. District Court in Detroit. The complaint alleged that Piech spent at least half a year pursuing Lopez, enticing him to not only jump ship but also to bring along such gems as GM’s Product Purchasing System--a handbook containing the prices of all GM vehicle parts--and the draft plans for GM’s futuristic, super-efficient “Plant X.” GM had at one point considered building the plant in Lopez’s home Basque region of Spain.
GM’s German subsidiary, Adam Opel, is Volkswagen’s top rival in Germany, and since Lopez made his famous defection--and implemented changes credited with making VW more competitive--Opel has lost significant market share to Volkswagen.
The German investigators said they had made no attempt to measure, in dollar terms, how much damage Lopez’s activities might have cost GM and Opel, saying that such calculations were not within their mandate. Their charges will now be forwarded to a German state court, which has two months to decide whether to go ahead with a criminal trial.
If Lopez, who resigned two weeks ago from Volkswagen, is tried and convicted on the current charges, he could face a five-year jail term or a fine.
GM and Volkswagen offered differing assessments of how the German indictments might affect GM’s lawsuit in Detroit.
From its headquarters in Ruesselsheim, Opel issued a statement saying, “The filing of the indictment does not directly affect the civil case in the USA.”
Volkswagen had no official reaction but, informally, some managers said they were optimistic that the filing of criminal charges had improved the chances for an out-of-court settlement in Detroit. Spokesman Klaus Kocks said that if the German prosecutors couldn’t come up with grounds for a conspiracy charge, then he couldn’t imagine how an American court could be convinced that a conspiracy had existed.
On Friday in Detroit, after announcement of the indictment, attorneys for Lopez asked a federal judge to delay GM’s lawsuit until the German case plays out and said he would refuse to testify if forced to come to the United States. The lawyers argued that he shouldn’t have to provide any information in a U.S. civil case that could be used against him in Germany’s criminal case.
There were rumors in Germany, meanwhile, that Volkswagen’s Piech is, in fact, already in the United States for settlement talks to take place next week. Volkswagen would not comment on the report.
The conservative Die Welt newspaper reported that Volkswagen might offer to compensate GM by forming a partnership with the U.S. firm in China. Volkswagen reportedly has a big head start over GM in the merging China market.
Times wire services in the U.S. and Times researcher Reane Oppl in Darmstadt contributed to this report.
