Search for Lopez settlement runs into trouble

FRANKFURT - The search for an out-of-court settlement between Volkswagen and General Motors in a dispute involving several former GM managers appears to have run into trouble, writes John Eisenhammer.

While the two sides were close on what to do with some of the VW employees for whom GM has been seeking a temporary employment ban, other issues raised by the American company have complicated proceedings.

The least controversial proposal appears to be that VW removes from its purchasing department for eight months four colleagues of Jose Ignacio Lopez de Arriortua, VW's purchasing director and the man at the centre of an industrial espionage row between the two companies.

GM and its European subsidiary, Opel, had originally sought to ban all seven of the managers who followed Mr Lopez to VW, on the grounds that the mass defection represented unfair competition. Now it has agreed to concentrate on four individuals: Jose Manuel Gutierrez, who was Mr Lopez's right-hand man at GM; Jorge Alvarez; Francisco Garcia-Sanz and Hugo van der Auwera.

GM, while willing to forgo damages claims directly linked to the defection of the four, apparently wants to keep open the possibility of damages in the light of future developments. It also appears to have re- issued demands for a public apology from VW.