Did VW Steal GM-Opel Secrets?

August 29, 1993

It promises to be the industrial espionage case of the decade, one replete with big money, big egos, big stakes and big national interests.

Germans watched aghast last Thursday as 60 police investigators swept through Wolfsburg, home of the huge Volkswagen auto empire and symbol of the postwar German economic "miracle." They marched into top executive offices and raided homes of several VW officials, possibly including the central figure in the case, a Spaniard named Jose Ignacio Lopez de Arriortua, vice president for all General Motors purchasing worldwide before he defected to Volkswagen last March.

Did Mr. Lopez take with him a huge cache of trade secrets from Adam-Opel, the GM subsidiary in Germany he once headed? That is the crux of this bitter struggle between the two giants. It has already hurt VW's reputation, could lead to the ouster of its combative chairman, an Austrian named Ferdinand Piech, and has Bonn officials worried about their relations with Washington.

So far the evidence against Mr. Lopez has been circumstantial but damaging. Consider:

* On Dec. 2, while still a GM vice president in Detroit, he supposedly instructed Opel to send him up to 90,000 printout sheets listing GM parts prices, a highly prized business secret. These documents have since disappeared along with plans for a new Opel small car and the company's marketing strategy for the rest of the decade.

* On March 9, Mr. Lopez signed a contract to go to Volkswagen. Next day, he stopped at Opel headquarters and ordered that some internal documents be sent to Spain, then flew to Detroit where GM chairman Jack Smith tried to lure him back. After days of headlined vacillation, Mr. Lopez flew to Germany and VW on March 15.

* In April, following GM complaints, Mr. Lopez replied that neither he nor the colleagues who also defected with him had taken anything. But it was later acknowledged two Lopez associates had shredded mountains of documents from their home in Wiesbaden in April while others unnamed did the same at a VW guest house in Wolfsburg.

* In May, German prosecutors had opened their investigation after two boxes of GM material were found in the Wiesbaden house.

* In early August, still asserting innocence, Mr. Lopez acknowledged he had some documents. His "soul mate," Mr. Piech, said it was all an American plot to undermine the European auto industry. At that time, the FBI entered the case and German police prepared their spectacular sweep.

While German Chancellor Helmut Kohl wishes this "highly distasteful" affair would just go away, it should not and will not. At issue here are charges of fraud, theft, perjury and criminal espionage that could emerge as a test case to enforce proper conduct among multinational corporations. It also could teach multinational CEOs that if they push nationalist hot buttons when they find themselves in a hot spot, they do so at their own peril.

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