Suzuki asks VW to retract claim it breached contract
TOKYO – Suzuki Motor Corp.'s war of words with estranged partner Volkswagen AG is heating up in public again, with the Japanese carmaker demanding that VW retract its claim that Suzuki violated their tie-up agreement by sourcing engines from rival Fiat.
Suzuki Chairman and CEO Osamu Suzuki issued the demand in a letter addressed to VW CEO Martin Winterkorn, the Japanese company said in a statement on Thursday.
Suzuki insisted that VW publicly recant its accusation by Sept. 30, "since Suzuki's global reputation has been significantly damaged by the announcement."
Volkswagen said Sept. 11 that Suzuki breached their 2009 alliance agreement when it bought diesel engines from Fiat. Suzuki denies that this violated their accord.
The dispute was one factor prompting Osamu Suzuki to ask the following day for a "divorce" from the VW "ball and chain." He demanded that VW sell its 19.89 percent stake in Suzuki, and in return said Suzuki would offload its 1.49 percent in VW.
At a Sept. 12 news conference and again in latest press release, Suzuki said that it consulted VW about buying the Fiat engines in January – and that both sides accepted it at the time. Suzuki says it turned to Fiat after engines offered by VW failed to meet Suzuki's specifications.
Suzuki meanwhile claims it was denied access to much of VW's technology, despite earlier expectations for technology sharing.
"This partnership does not bring us benefits we expected but turned out to be a 'ball and chain' for our managerial independence," Osamu Suzuki said in the Sept. 22 statement.
VW has said it has no intention of selling its stake in Suzuki. But Suzuki remains adamant that any working relationship is over.
"Volkswagen's notice and press release hinder our effort to develop attractive new products and significantly disparage Suzuki's honor," Osamu Suzuki said. "I think you can share my view why Suzuki would like to dissolve partnership and cross-shareholding relationship with Volkswagen."
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