Kohl weighs into the Volkswagen espionage battle: German Chancellor calls VW's brawl with General Motors 'highly distasteful'

THE GERMAN Chancellor, Helmut Kohl, yesterday stepped into the furious row between Volkswagen and General Motors, urging both the car manufacturing giants to stop washing their dirty linen in public and to get on with making cars.

In an interview broadcast on German television last night, Mr Kohl described the feud as 'highly distasteful. If Volkswagen and General Motors talk to each other in what I consider to be a highly distasteful way, that is their business,' he said. 'But they should give fewer magazine interviews and do more to take care of business. Then things will improve.'

The Chancellor's intervention came amid continuing controversy over Jose Ignacio Lopez de Arriortua, VW's new production chief, accused by his former US employer, General Motors, of industrial espionage. It followed the slightly bizarre and potentially damaging admission by VW that former General Motors employees who transferred with Mr Lopez earlier this year had indeed brought confidential documents along with them, but had destroyed them before they could fall into VW's hands.

Mr Lopez himself, the former purchasing director at General Motors, has steadfastly denied the accusations made by his former employer, and by Adam Opel, its German subsidiary. German public prosecutors in Darmstadt who are investigating the matter confirmed yesterday that they had received a written statement from Mr Lopez, but refused to reveal its contents, saying only that 'something new' had emerged.

Having refused for months to respond to General Motors' allegations of industrial espionage, VW's chairman, Ferdinand Piech, created uproar earlier this month when he accused the American concern of deliberately trying to defame the German company and described the feud between the two as a 'war'.

Worried that such a belligerent stance was in danger of backfiring, an emergency meeting of the VW supervisory board was called last Friday and it was there, for the first time, that VW admitted that documents 'possibly' belonging to General Motors and 'possibly containing sensitive information' had been destroyed by former General Motors employees who defected to VW along with Mr Lopez.

According to VW, the shredding of the documents was carried out at a house in Wiesbaden owned by the company and a VW guest house in Wolfsburg, where the company's headquarters are located.

According to witnesses, Jorge Alvarez and Rosario Piazza, two of the former General Motors employees, worked through one night in April filling a van parked outside the Wiesbaden house with bags of shredded paper.

In the statement issued after the supervisory board meeting, VW said that the aim of the shredding had been to 'destroy documents that could possibly be attributed to General Motors and could contain critical information in order to remove any danger of distribution at Volkswagen'.

Complicating matters yet further, VW yesterday said that, although those doing the shredding had been former employees of General Motors, 'the documents themselves were, however, put together and sent by employees who, even today, are still working at Opel'.

Bruno Seifert, the Opel spokesman, said he could not explain the VW statement, adding: 'Nobody sent on anything to Mr Lopez without being asked.'