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Automobile industry

Volkswagen Wins Round in Legal Battle with General Motors

Strategic Insights

— 1 min read

A German civil court has ruled that Volkswagen had not broken the law by luring away seven former General Motors managers last March, dealing a minor victory in the ongoing legal wrangling between the two auto giants. The lawsuit, filed by General Motors' German subsidiary Adam Opel A.G., alleged that the managers, led by former GM chief of purchasing Jose Ignacio Lopez de Arriortua, had systematically gathered and stolen trade secrets from their former employer. However, the court found that VW had not used dishonest motives to hire the managers and that they had only sought to utilize their normal business skills.

Key Takeaways:

  • The German civil court ruled that Volkswagen had not broken the law by hiring seven former General Motors managers last March.
  • The court found no evidence of dishonesty on the part of Volkswagen and ruled that hiring employees from a competitor does not violate the law if the new employer solely wants to make use of the new worker's normal business skills.
  • The court ordered Opel to pay four-fifths of the legal costs of the case while Volkswagen would pay the remaining fifth.
  • The decision is a minor victory for Volkswagen, but the company still faces ongoing investigations by German prosecutors and the US Justice Department into industrial espionage allegations.
  • General Motors and Opel have filed separate lawsuits against the seven former managers, including a lawsuit accusing them of stealing proprietary information.

Statistics:

  • 7: The number of former GM managers who joined Volkswagen after leaving their posts at GM.
  • 28: The number of GM managers that Volkswagen allegedly tried to recruit as part of a "massive campaign".
  • 4/5: The proportion of legal costs that Opel was ordered to pay after losing the case.
  • 1: The number of German civil courts that have ruled on the case so far (Frankfurt State Court).
  • 2: The number of days Opel has to study the decision before considering whether to appeal.

Sources:

  • "Volkswagen Wins Round in Legal Battle with General Motors" (uncredited author), The New York Times, uncredited date.
  • "Lopez and G.M. Are Ordered to Return to Germany" (uncredited author), The New York Times, uncredited date.
  • Associated Press, photo caption, caption provided.

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