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Suzuki Deadline For VW Public Apology Passes

VW Sends Letter, Won’t Reveal Content, Then Rubs Salt Into Wound

The spat between Suzuki and Volkswagen rumbled on, as the Japanese deadline for an apology passed without a public retraction from the Germans.

The apparent breakdown of an alliance between the companies led to the Japanese smarting and left the Germans looking bemused.

VW called Suzuki’s behaviour “theatrical”. It had accused Suzuki of breaching its contract agreement by awarding a diesel engine contract to Fiat. Suzuki replied that this somehow “significantly disparaged Suzuki’s honour”, and if VW didn’t apologise by September 30, it might initiate a legal response.

In the event, the deadline passed without legal retaliation from Suzuki, which said it had received a letter from VW without disclosing its contents. VW declined to reveal what it said in the letter, but added that Suzuki should reverse the alleged breach of contract. That doesn’t sound like VW was backing down.

The dispute inspired much high octane news reporting in the media. Automotive News ran a story headed “VW and Suzuki execs keep lobbing grenades”, saying that the divorce between the two was not as ugly as the Tiger Woods marital breakdown but was heating up.

When tempers cool there is serious business to be done if the relationship is to be concluded. In 2009, VW bought 19.9 per cent of Suzuki which in turn purchased a stake of about 2.5 per cent in VW. If the break is to be clean these stakes will have be sold.

Neil Winton – October 5, 2011

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