LOS ANGELES -- Korean automakers Hyundai Motor Co. and Kia Motors Corp. will ask a federal judge in Los Angeles on Tuesday to dismiss a lawsuit by a former executive accusing the affiliated companies of violating U.S. antitrust laws, an attorney for Hyundai said Monday.
Rapidly growing Hyundai and Kia are Korea's two largest automakers and control nearly 4 percent of the U.S. auto market. Hyundai's parent, Hyundai Motors Group, acquired about 55 percent of Kia shares in 1998, according to the lawsuit filed by Soo Ho Suh.
Suh, who worked for Kia in Irvine, Calif., said he was fired in 2001 for refusing to participate in a plan -- which he believed to be illegal -- to trade proprietary marketing and sales information so that Kia and Hyundai would not compete for the same U.S. customers.
According to his lawsuit, filed last August, Suh, a marketing executive who started with Hyundai in 1982, was ordered in 2001 to become a member of a Kia task force to revitalize Kia's American business.
He soon learned that the task force had been established "to divide and allocate to the U.S. subsidiaries discrete segments of relevant market for noncompetitive pricing, marketing and sales" of cars and parts, the lawsuit said.
In November 1999, the lawsuit said, Hyundai withdrew its Trajet van from the U.S. market to make way for Kia's Sedona minivan.
The vehicles would have been priced similarly and would be targeted at low-price "value buyers," the lawsuit said. "As a result of the withdrawal of the Trajet, the Sedona is, and has been, marketed without the competitive alternative," the lawsuit said.
Suh also accused company officials of slandering him after he exposed the allegedly illegal activity -- telling others that he had taken bribes during a previous posting in India.
Suh's attorney Kevin Kim said his client has since returned to Korea to find work -- a difficult task because of the bad references provided by his former employer.
In a motion asking a judge to dismiss the case, Hyundai Motors Group argues that the U.S. Supreme Court ruled in 1984 that companies under common ownership "cannot ... conspire to violate antitrust law."
Although the case, Copperweld Corp. vs. Independence Tube Corp., involved allegations of conspiracy between a parent company and its wholly owned subsidiary, the parallels and subsequent case law "apply the same rationale," Richard Sheldon, attorney for Hyundai, said.
But Kim argued that that is exactly the reason the Copperweld case doesn't apply. "Hyundai and Kia represented to the market that they are competitors and they are now saying that since there is some common ownership they cannot do it," Kim said.