By on October 17, 2011

If the war of words and press releases between Suzuki and Volkswagen escalates into a legal duel, then the showdown will not happen in a court of law.  Germany’s Handelsblatt learned that the “secret cooperation agreement between Volkswagen and Suzuki specifies arbitration in case of differences.”

Commonly, arbitration is binding in these cases. It may not even come to that. David McAllister, Premier of Volkswagen’s home state Lower Saxony, which holds 20 percent of Volkswagen, intervened over the weekend. “It would be good if these differences would be settled in private and not in public,” McAllister told the Handelsblatt.  McAllister also sits on the board of Volkswagen.

Intervention by high-ranking government officials has a rich tradition in these matters. When Volkswagen and GM were at their throats over the Lopez affair, former Chancellor Kohl settled it with then President Clinton.  The  fight between Volkswagen and BMW about the rights to Rolls-Royce again was settled by higher-ups.


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6 Comments on “Suzuki vs. Volkswagen: Peacekeeping Intervention...”

  • avatar
    The Doctor

    I thought the fight between VW and BMW was decided by the fact that Rolls-Royce plc had simply licenced the name to Vickers who decided to sell the rights (but not the factory) to BMW… Or am I mis-remebering things?

    • 0 avatar

      I think you are close.

      My recollection is that, ca. 1995, R-R PLC also had an aero-engine JV with BMW (IIRC since dissolved), so that when a certain Koenig u. Kaiser Piech von und zu VW, Fürst von und zu Porsche, out-bid BMW for the rights to the plant and the two motor-car brands produced there, a certain Herzog Pischetsrieder von und zu BMW, Graf zu Rover-Group (before he was later engaged at VW by seines durchlaucht Piech, ca. 2003) out maneuvered VW by employing the argument you mention, as well as leveraging the JV-rights to prevent his JV partner from licensing VW the right to use more than the Bentley name. (I suppose there were other considerations that we don’t know of, but would all be interested to hear.)

      Final result was peace between the two motor-kingdoms demonstrated for the serfs via a photo-op of the two CEOs shaking hands, and the forces of BMW and VW returned to neutral territory to continue their battle on the Schlactfeld of market competition and started, respectively, building R-R and Bentley motorcars.

      The epilogue, is that when Pischetsrieder (a dead-ringer for the dead Ludwig II of Bavaria) got canned by the BMW board (along with Ritter Reitzle over the Rover debacle), he was later engaged by Piech, first as CEO of SEAT, and later of VW, before getting canned again and replaced by Graf Winterkorn von Audi.)

    • 0 avatar

      Well, it was complicated. Just like Saab and Volvo, Rolls-Royce cars and Rolls-Royce turbines were separate entities, with the Rolls-Royce name licensed to Rolls-Royce Motorcars. Vickers had bought Rolls-Royce Motorcars. When they wanted to sell Rolls, BMW and Volkswagen were in a bidding war. BMW was outbid. Once the deal was closed, VW realized that they had bought a factory in Crewe, Bentley, and the Emily hood ornament. However, they had forgotten to secure the (separately licensed) brand rights to Rolls.

      The brand rights were sold to BMW (which had cooperated with Rolls-Royce turbines making turbines). For a few years, VW had Rolls, then it was handed over to BMW. BMW had to buy Emily and the Rolls grill from VW and had to develop their own Rolls. Tough deal, because Bentley and Rolls shared the same platform, and Bentley still sells in much higher numbers then Rolls.

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