Suzuki chief Osamu Suzuki has launched a stinging attack on Volkswagen boss Martin Winterkorn as the Japanese company terminated a framework agreement, demanding that the German carmaker return its Suzuki shares.
The two entered into their co-operation agreement in December 2009, recognising each other as independent, equal partners and, in so doing, agreed to facilitate, among other things, access to Volkswagen AG’s technology.
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To allow this to happen, VW aquired 19.89% of Suzuki shares but Suzuki claims it was never allowed access to the German company’s core technology.
Osamu Suzuki said: “Suzuki terminated the partnership with VW. Suzuki will be seeking the return of its shares from VW in arbitration. I am disappointed that we have to take this action but VW’s actions have left us no choice.
“They have continued to refuse our attempts on numerous occasions to resolve these issues through negotiation. I am more disappointed that having shaken the hand of D. Winterkorn in agreeing to this partnership, he has not honoured his commitment to grant Suzuki access to what was originally agreed.
“In the absence of VW’s cooperation and given its failure to do what was agreed, there is no basis for the partnership to continue. With the cessation of the partnership there is also no basis for VW to hold on to Suzuki’s shares. We will now work to restore the relationship between Suzuki and VW to its original state as independent parties who do not restrict each other’s business. I call on Dr. Winterkorn to honour this.”
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By GlobalDataThe Japanese company added in a statement that “it also became clear that there were differences between Suzuki and Volkswagen in the understanding of ‘independence’. Suzuki cannot therefore establish a relationship of mutual trust which is the basis for collaboration between the two parties.”
Suzuki served VW with a notice of breach last month and said it has repeatedly asked the Germans for “amicable discussions” to terminate the business and capital relationship.
“Unfortunately Volkswagen AG has not agreed to such requests,” Suzuki’s statement added. “As a result of the termination, the cross-shareholding alliance must be dissolved immediately and in so doing the parties will return to their independent status before the agreement. Volkswagen AG cannot increase or decrease its proportion of Suzuki shares without Suzuki’s consent even after the termination of the framework agreement.”
Volkswagen said in a statement it was extremely disappointed that Suzuki demanded mediation after rejecting VW’s offers to rescue a floundering alliance, arguing Suzuki did not have a legal leg on which to stand.
“There is no legal foundation whatsoever obliging us to surrender our shares,” it said in a statement cited by Reuters, reaffirming its intention to hold on to a 20% stake in Suzuki.
VW said Suzuki’s accusations were “factually incorrect” that the German carmaker failed to offer its partner access to the technologies it wanted.
“Volkswagen categorically repudiates any allegation that we have in any way breached or failed to comply with the spirit of the cooperation agreement and rejects any termination of the agreement,” it said.
