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. Last Updated: 07/27/2016

VW to Pay GM $100 Million In Auto 'Espionage' Settlement

DETROIT, Michigan -- Ending one of the most bitter fights in corporate history, automakers Volkswagen AG and General Motors Corp. have reached an out-of-court settlement of alleged industrial espionage by executives who quit GM to join VW.


In exchange for GM dropping its U.S. racketeering lawsuit against Volkswagen, the German automaker agreed to pay $100 million to GM and committed to purchasing $1 billion worth of GM auto parts over the next seven years.


VW also acknowledged the possibility of illegal activities by Jose Ignacio Lopez de Arriortua and others who abruptly left GM to join VW in March 1993.


GM sued VW in U.S. District Court in Detroit last year, alleging that Lopez and his followers stole secret documents on GM's future European product plans, parts prices and manufacturing techniques that helped VW slash its costs.


GM also had accused VW Chairman Ferdinand Piech and other VW executives of conspiring with Lopez, a fiery 55-year-old Spaniard, to plot an elaborate scheme to transport the documents to Germany and copy the information into VW's computers.


VW will sever all ties to Lopez until March 2000 as part of the deal, GM officials said. When Lopez resigned as VW's production chief in November 1996, VW executives had said they would continue to use him as a paid consultant -- a decision that infuriated officials at GM and its Adam Opel AG unit in Germany.


"That's been taken care of. Lopez will not be a consultant for VW until at least the year 2000," said the GM official, who spoke on condition of anonymity.


The settlement, hashed out this week in secret talks in Detroit, brought to an end nearly four years' of dispute and eliminated the risk of a multibillion-dollar jury verdict against VW in GM's hometown of Detroit.