Silent running backfires as GM spooks VW rivals: For the first time in the bitter 14-month dispute with its US counterpart, Germany's biggest car manufacturer is claiming the moral high ground. John Eisenhammer reports from Frankfurt

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The Independent Online
IT WAS the ideal spot for a bicycle puncture. The young woman rang the bell at 5 Kehrbeeke Street, in the town of Braunschweig. Out came the Spaniard, Rosario Piazza, keen to help. Numbers were exchanged, there were numerous telephone calls, a dinner date, talk of going to the disco. Matters were taking their happy, natural course.

But this was no girl-meets- boy coincidence. The young cyclist was working for Personal Security Service, a private detective agency hired by General Motors' European subsidiary, Adam Opel. Its job was to provide proof of industrial espionage by several former GM executives, by then working for its rival, Volkswagen. The woman was part of a large team of PSS sleuths monitoring the private homes of VW managers, in particular that of Jose Ignacio Lopez de Arriortua.

Volkswagen's number two, Mr Lopez, along with several colleagues, is accused by GM of having taken quantities of secret company material before moving to its German competitor in March 1993. Formal criminal investigations are under way on both sides of the Atlantic, but Opel wanted to make its own inquiries. Mr Piazza is a close associate of Mr Lopez - one of his 'centurions' in the crusade to revolutionise car production. PSS must have hoped that, cheek-to-cheek on the dance floor, Mr Piazza would say a little too much.

A spate of revelations about Opel's gumshoe activities has re-ignited the bitter war of the car behemoths. For the first time in the 14 months of the Lopez affair, Volkswagen has sought to recover some moral advantage, mobilising a co- ordinated campaign of senior politicians, executives and lawyers to cast doubt on the entire case against Mr Lopez.

Richard Schroder, Prime Minister of the state of Lower Saxony, said 'dubious circumstances and methods' had damaged the credibility of the official prosecutors' investigation, and he suggested it should be stopped. Lower Saxony is the dominant shareholder in Volkswagen, and the car maker is the region's main employer.

Ferdinand Piech, VW's chief executive, called for an independent body to assess the conduct of the case. VW's lawyers issued a long statement casting doubt on the correctness of the state prosecutors' methods.

The high point of Volkswagen's counter-offensive came in the form of a television documentary which was aired Wednesday night on Germany's main public channel.

The programme suggested that key evidence against Mr Lopez had been tampered with, and that the state prosecutors' investigations had been biased by the underhand actions of Opel's private sleuths. 'This is no longer the VW affair, but now the Opel affair,' said a Volkswagen spokesman.

As the temperature in the ugly corporate conflict reached boiling point once again, GM accused Mr Schroder, who is deputy chairman on VW's supervisory board, of abusing his political office to sway an independent criminal investigation.

David Herman, the head of Opel, railed against VW's 'insinuations, slander, cover-up attempts, and other defamatory plans'.

The most surprising response was a searing statement from one of Germany's top prosecutors, moved to defend the honour of his colleagues against the onslaught by Mr Schroder and VW.

'There is not the slightest reason to doubt the prosecutors are carrying out this investigation objectively and neutrally,' said Hans-Christoph Schaefer, chief prosecutor for the state of Hesse.

The Darmstadt prosecutors' office, which is leading the criminal investigation against Mr Lopez, said it was common practice for firms to hire private detectives in white-collar crime. It expressed surprise that the actions of the private sleuths had only emerged now that the pressure of the official investigation into Mr Lopez was increasing, since they had been fully recorded for the last 10 months in files that are open to VW's lawyers.

As the insults flew, the spy drama claimed its first victim. Jean Louis Royet, self-proclaimed world champion in knee jerks, has been sacked from the police for taking his extra-curricular activities too seriously. His wife, Dagmar, runs the PSS private detective agency hired by Opel.

(Photographs omitted)