Volkswagen chairman says GM wages vendetta Defector Lopez is alleged target


BONN, Germany -- The fight between Volkswagen and General Motors escalated yesterday as VW's chairman accused GM executive in Europe of waging a vendetta against the German auto maker's worldwide production chief.

The latest chapter in the international corporate duel involving secret GM documents and the defection of a top GM executive to VW came with published comments by Ferdinand Piech, Volkswagen's chairman, about GM's legal campaign against Jose Ignacio Lopez de Arriortua, who abruptly quit GM in March to take charge of VW's worldwide production.

Yesterday, German prosecutors investigating GM's assertion of industrial espionage by VW elaborated on reports last week that they had found confidential documents concerning a new small car planned by Adam Opel AG, GM's German subsidiary.

What began as a scrap over Volkswagen's hiring of Mr. Lopez has turned into a bitter legal battle that industry experts say could become a landmark case on the issue of proprietary information in Europe.

In an interview Friday in the newspaper Die Welt, the VW chairman stopped short of directly naming the person he thought was responsible for the legal campaign against VW, referring only to the "Zuricher" -- General Motors Europe is based Zurich.

But Mr. Piech made it clear that he was referring to Louis R. Hughes, the chairman of GM Europe and former Opel chief.

Mr. Piech implied that the "Zuricher" had been rejected last year to head VW in favor of Mr. Piech and that GM's campaign against Mr. Lopez was the result.

Mr. Piech said the legal proceedings against Mr. Lopez were "exclusively a personal campaign," adding: "General Motors is indeed the last company where we would find something of advantage to ourselves."

Hans Gaeb, vice president of GM Europe and a member of Opel's supervisory board, said Mr. Piech's remarks were an attempt to slander Mr. Hughes. "We are not surprised at the level of the offensive remarks and the incorrect assertions they contain," Mr. Gaeb said in a statement.

As for the confidential GM documents, a spokesman for the state prosecutor's office in Darmstadt confirmed reports that its investigation had turned up documents containing details of a small car that Opel planned to produce by the end of the decade.

He would not say whether the documents were copies or originals.

By confirming that they have found documents relating to Opel's small-car project, the Darmstadt prosecutors appear to have lent credence to GM's contention that Mr. Lopez and seven other former GM employees who joined him at Volkswagen took trade secrets with them.

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