Automakers, suppliers wrangle over technology

UPDATED: 1/12/11 2:58 pm ET EDITOR'S NOTE: This blog has been revised to include comment from Chrysler Group LLC.

Before the Great Crash, North American automakers and suppliers usually feuded over component prices. Nowadays, intellectual property rights may be the new flash point.

Peter Marks, CEO of Robert Bosch's North American operations, tells us that some automakers - he won't name names - are asserting ownership of any technology developed jointly with a supplier.

This prevents suppliers from selling their technology to other automakers - which, in turn, prevents suppliers from creating economies of scale that would allow them to cut their prices.

"We've tried to limit [such agreements] to a very few pieces of our intellectual property," Marks said in a recent interview with Automotive News. "It's not an easy issue."

So which automakers are insisting on these agreements? Marks won't tell, but another executive - who works for a major global supplier - tells us that Chrysler has made such demands.

Seems counterproductive to us. But company spokeswoman Katie Hepler says our anonymous source failed to point out that Chrysler asserts such control only when it funds development of that technology.

"Our position is very clear: If we pay for the development of intellectual property, we do receive a license for the application of it into our products," Hepler said in an e-mailed statement.

Last summer, Chrysler circulated a draft of its new contract to suppliers before adopting it. The contract "has been received very well by a majority of our suppliers and we feel that it provides both parties adequate protection," Hepler said.

Fair enough. At a time when technology is evolving at warp speed, this is a do-or-die issue for automakers and suppliers alike.

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