Germans let Lopez off with monetary fine
By Staff -- Purchasing, 10/8/1998 6:00:00 AM
The curtain is falling on one of the most controversial episodes ever involving a purchasing professional.
At press time, a German court was expected to settle the criminal case against Jose Ignacio Lopez, a former General Motors Corp. purchasing executive charged with stealing confidential information from GM before defecting to Volkswagen, Europe's largest automaker.
A GM spokesman confirmed that the state court in Darmstadt, Germany, planned to fine Lopez and three of his former GM cohorts $330,000 in return for dropping the charges of industrial espionage.
Lopez, heralded by Wall Street and the business press for the radical cost-cutting techniques he used while at GM, was loathed by the supplier community for such seemingly unfair practices as tearing up existing contracts and demanding price breaks as high as 20%. Off the record, many suppliers say they still hold a grudge against GM for Lopez's heavy-handed tactics.
Lopez was about to be rewarded for such measures in 1993 with a promotion to head GM's North American Operations when he defected to Volkswagen with seven other GM executives. GM accused Lopez of taking reams of confidential information with him, including plans for a first-of-its-kind flow assembly plant.
GM settled its civil suit against Volkswagen in 1996, forcing Lopez to resign and requiring Volkswagen to pay GM $100 million and buy $1 billion worth of GM parts.
However, GM Spokesman Henry Wang says the United States government is still investigating whether to bring industrial espionage charges against Lopez and Volskwagen.
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