#suzuki

The admonitions by Lower Saxony’s premier to wash dirty laundry in the privacy of your office appear to bear fruit – at least for the time being. Volkswagen has agreed to a cease-fire in the war of words with Suzuki.

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.

Divorces usually get messy when there is money involved. The Suzuki vs. Volkswagen case is no exception. There are irreconcilable differences. Suzuki wants out, Volkswagen would like to swallow Suzuki whole. The rest are accusations and counter-accusations that are as interesting as divorce papers. In the last days, the Kabuki dace went into a new phase as both sides ratchet up their rhetoric.

Suzuki today sent a letter to Volkswagen, demanding a retraction of the allegation that Suzuki breached its contract with Volkswagen. Reuters calls the letter an escalation of “a war of words as it tries to break off equity ties with its estranged partner.” And the tone of the letter definitely sounds belligerent:

Will they or won’t they? That’s currently the talk amongst Germany’s auto execs. “They” are Volkswagen and Suzuki. And “will” refers to taking over Suzuki against its will. Yesterday, Der Spiegel, reported that Volkswagen is no longer barred from taking over Suzuki if Suzuki cancels its contract. Der Spiegel, of course, heard that from an interested party that telegraphs to Hamamatsu. “Be careful what you wish for.” Nonetheless, the rumor mill is at high revs. Let’s investigate.

Interesting twist in the Volkswagen-Suzuki sopu opera (see, Japanese is easy!): Suzuki could be doing Volkswagen a favor by filing for divorce. This way, Volkswagen can swallow Suzuki whole.

Despite saber-rattling, legal threats and affirmations that Volkswagen does not intend to give up its share in Suzuki, Volkswagen started its climbdown. Ferdinand Piech himself signaled that Volkswagen can go it alone. At the Frankfurt Auto Show, Piech said that Volkswagen is “big enough.” His man Winterkorn quickly fell in step and told Reuters today: “”Suzuki was one option. But we can do it on our own.”

That should be signals enough for everybody at Volkswagen to put the Suzuki saga behind themselves and to concentrate on other pressing business, such as the messy Porsche merger.

Back in Tokyo, The Nikkei [sub] wrote what seems to be Suzuki’s version of the story.

„It is like being married and getting a divorce. Instead of criticizing each other, it is better to go through it with a smile,” Suzuki’s patriarch chairman Osamu Suzuki told reporters at a hurriedly arranged press conference in Tokyo today. And a divorce it is: Suzuki announced it will terminate its relationship with Volkswagen after a nearly 2 year unhappy and childless marriage.

In a news release, Suzuki announced that “its board of directors has officially determined today dissolution of the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG. “ Here is a short version of the long list of reasons given in the divorce papers (known as the “green form” in Japanese matrimonial matters):

In the long simmering conflict between Suzuki and Volkswagen, the gloves are coming off and we are having a bit of domestic violence. Volkswagen just said in an emailed statement:

“The review of the partnership with Suzuki Motor Corp announced by Volkswagen Aktiengesellschaft has brought its first results. Volkswagen stated in Wolfsburg on Sunday that the company is serving notice of an infringement by Suzuki of the cooperation agreement concluded in December 2009.

Yesterday, Bloomberg poured gasoline into the smoldering embers that used to be a Volkswagen-Suzuki relationship. Bloomberg said that Suzuki doesn’t want to talk to Volkswagen. The trouble is: Bloomberg most likely is wrong. Bloomberg and the world at large became a victim of Lost in Translation.

Welcome back to ongoing coverage of the latest transcontinental tale of romance and betrayal, in which Volkswagen and Suzuki’s young-but-troubled relationship is put to the test while the world watches. Last time we checked in, a piece of pricey gossip suggested what the rumors had been saying for weeks: VW and Suzuki were headed for Splitsville. But despite the angry blogging outbursts and talk of “ reviewing the relationship,” Volkswagen is standing by its Japanese bride, telling Automotive News Europe [sub] that the latest gossip that the “relationship is headed for dissolution” is “nonsense.” Suzuki joined the show of support, saying it had no plans to leave. But all the while, an Italian temptress is putting even more pressure on this relationship, as Bertel reported last month:

Someone is fanning the flames between Volkswagen and Suzuki, and we aren’t talking flames of love. Today, the German Platow Brief reported a bit belatedly that the German-Nipponese alliance is on the ropes. Something that the attentive reader of TTAC has known for quite a while and as always free of charge. The expensive subscription to the German financial newsletter is not in our editorial budget. A friend of TTAC sent us today’s Platow missive, which can’t be found on-line. After going through the usual blah-blah, the letter drops a high explosive bomb:

While today’s Arse Sweat-a-Palooza winner on laps is indeed the same Honda-motorcycle-engined Geo Metro that won the 2008 Arse Freeze-a-Palooza, it’s really a much different car now. In ’08, the Geo Player Special (then known as the Metro Gnome) had the CBR900RR engine driving the front wheels, via an ingenious chain drive that used a toilet plunger as a grease seal. Since that time, the engine— now a CBR1000— has been moved back and now drives the rear wheels.

Toshihiro Suzuki, executive vice president of Suzuki said Volkswagen conducting a review of their troubled marriage is “a step forward.” He quickly added that Suzuki had not heard any details, says Dow Jones via The Nikkei [sub].

“Our cooperation is based on the premise of being equal partners,” said Suzuki. “We’ll wait to hear from Volkswagen to confirm that the review under way is being carried out with this idea in mind.”

This doesn’t sound like the remarks of a partner who is ready to kiss and make up & out.

“Right now, there is no specific joint development project going on with Volkswagen,” Suzuki Executive Vice President Yasuhito Harayama told reporters who came to Suzuki’s headquarters in Hamamatsu, Japan, to meet four executive vice presidents of Suzuki. Come to think of it, there had been no progress over the past 18 months in the much feted partnership between Suzuki and Volkswagen, Harayama said.

The man who just cut deep in the fraying strands of the tie-up between Volkswagen and Suzuki would have all reason to say everything is fine. Harayama is a former bureaucrat at Japan’s economy and trade ministry who was hired by Suzuki two years ago. He is in charge of relations with Volkswagen. It is not in his interest to admit defeat.

According to comments made by Harayama to Ran Kim of Reuters, one of the sharpest reporters on the Japanese auto beat, relations between Wolfsburg and Hamamatsu turned into a deep freeze when Volkswagen tried to “wield influence over Suzuki’s management.”

“It was made very clear when we tied up with Volkswagen that we did not want to become consolidated, and that we would remain independent,” Harayama said.

Before anything will happen between Suzuki and Volkswagen, the deal needs to be renegotiated.