Volkswagen chief hits back at GM over Lopez

RULING OUT the possibility of a 'peaceful solution' to what he described as the war with General Motors, Ferdinand Piech, Volkswagen's chairman, yesterday said his company would use all means to defend itself.

Speaking at a hastily called press conference at VW's headquarters in Wolfsburg, Mr Piech angrily rejected GM allegations of industrial espionage by several of its former employees who are now with Volkswagen, and sought to turn the tables on the American firm by hinting it was indulging in foul play.

Mr Piech said it was 'completely intolerable the way GM and its European subsidiary, Opel, are waging a personal vendetta against Jose Ignacio Lopez de Arriortua', VW's production chief.

The sudden counter-attack marked a reversal of VW's previous strategy of virtually ignoring GM's allegations, and the investigation by the Darmstadt state prosecutor into possible document theft. In the past fortnight, however, Volkswagen has suffered a series of setbacks that began to affect its share price.

Mr Piech accused GM and Opel of waging a war to weaken VW's market position. Singling out Fiat and Peugeot as the next on the 'European auto hitlist', he warned: 'Should GM lose its war against VW then other competitors will have to be prepared for hitherto unusual practices'.

His uncompromising defence of Mr Lopez, and the reiteration that VW will be out of the red by the third quarter of 1993, led to a sharp rebound in the company's shares, which ended nearly DM12 up at DM359.70 in a generally falling Frankfurt market.

Mr Piech several times hinted that GM might have hacked into Volkswagen's computer system and tampered with vital evidence in the hands of the prosecutor investigating document theft. However, asked about the grounds for these suspicions, he admitted none had yet been found.

The Darmstadt state prosecutor's office leading the espionage investigation immediately dismissed this suggestion. Opel rejected the allegations as 'entirely without substance'.