SPAIN: Bosch may pay compensation for harming Mercedes

By just-auto.com editorial team | 9 May 2005

Robert Bosch could be forced to pay Mercedes-Benz millions of euros in compensation for damaging the automaker's image.

The German suppler already faces the prospect of paying damages to Mercedes after the premium carmaker recalled 1.3 million cars last month to fix problems with alternators, batteries and brakes supplied by Bosch.

In February Mercedes had to stop production for several days because of faulty diesel fuel pumps also made by Bosch.

Bosch chairman Franz Fehrenbach said the supplier could be forced to pay Mercedes even more compensation than it is contractually obliged to do.

"We are still negotiating based on agreed terms and conditions. But I guess because it also had to do with image problems, there will be something on top of it," Fehrenbach told the Automotive News Europe Congress in Barcelona.

Fehrenbach declined to disclose the amount in question. "Maybe I will never tell you," he said.

Bosch's recent quality problems were "highly annoying," added Fehrenbach.

But he said that quality remains the supplier's highest priority.

Fehrenbach said the company is dealing with the recent quality issues.

"There are sirens wailing and immediate action when we discover a problem," he said.

Fehrenbach criticised automakers which disclose the names of suppliers whose parts cause problems.

"We develop parts together and we need to deal with the problems together," he said. "If we don't stop the finger pointing, it will be a disadvantage to all of us."

In February the German magazine Focus Money said Mercedes' parent DaimlerChrysler wants Bosch to pay $US97.9 million for the faulty diesel fuel pumps it supplied.