GM defectors indicted in Volkswagen case German prosecutors accuse ex-officials of embezzlement, theft

December 12, 1996|By NEW YORK TIMES NEWS SERVICE

FRANKFURT, Germany -- General Motors Corp. said yesterday that German prosecutors had indicted Jose Ignacio Lopez, the former GM executive who switched to Volkswagen AG, on charges of embezzlement and theft of confidential documents from GM.

The charges, which had been expected for several weeks, are somewhat less severe than the fraud charges GM had originally sought; they carry a maximum prison term of three years rather than five.

Also, as expected, prosecutors will not file criminal charges against Volkswagen's top executives or board members, as GM had wanted.

Nevertheless, the indictments provide the first official endorsement from independent authorities of GM's three-year complaint that Lopez and several associates took a trove of internal documents when they switched companies three years ago. Indicted with Lopez are three associates of his. Lopez was GM's purchasing chief before he moved to VW, where he headed production and purchasing until his resignation about two weeks ago.

Lopez' attorneys said the charges were baseless and would never hold up in court.

Both GM and Volkswagen rushed to put their own interpretations on the charges against Lopez, which are the result of a three-year investigation that included several police searches of Volkswagen offices and the homes of Lopez and his associates.

VW executives said they hoped that they could now reach an out-of-court settlement with GM in its civil suit against VW in the United States, arguing that the indictment supported their position that VW was not part of an industrial spying conspiracy and that Lopez was, if anything, a rogue player.

But GM executives said the indictments showed just the opposite, by supporting their complaints that Lopez and the others took rooms full of secret GM information with them to VW. And they said that a quasi-apology this week from Volkswagen's chief executive, Ferdinand Piech, came nowhere near what they would expect before they would agree to settle the case.

Officials at Adam Opel AG, the GM subsidiary based in Russelsheim, Germany, where Lopez had worked before he moved to Detroit and, later, to VW, said the indictments "confirmed the initial suspicion of industrial espionage" and "the betrayal of company secrets" by Lopez and his associates.

Volkswagen, based in Wolfsburg, Germany, said the indictments proved its assertion that its top executives and board members were innocent of any conspiracy with Lopez and that, in any case, they had neither asked for nor benefited from GM business secrets.

Volkswagen's statement said the company stood by its belief "that the results of the three-year investigation by prosecutors provided no evidence of industrial espionage by Volkswagen." VW also said the prosecutors had made no allegations about the financial damages that GM had incurred.

A VW spokesman even went so far as to say that GM's charges of a conspiracy had "collapsed like a house of cards."

And directly dismissing GM demands that Piech resign as VW chief executive, the chairman of the automaker's supervisory board, Klaus Liesen, said he wanted to squelch speculation and reaffirm the board's support for Piech.

The associates of Lopez's who were said to have been indicted are a former VW manager, Jose Manuel Gutierrez, and two current employees, Jorge Alvarez and Rosario Piazza.

Pub Date: 12/12/96

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