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US lawsuit against Volkswagen: Wolfsburg wanted to “destroy” suppliers

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The Volkswagen legal department must feel like Don Quixote from the novel by Miguel de Cervantes, who is desperately fighting windmills. The lawyers of the global corporation have been fighting waves of lawsuits from customers and investors because of the diesel scandal and its consequences.

Another lawsuit was filed against the Wolfsburg in the USA on Monday. It has nothing to do with the diesel, but the allegations are tough. They are directed not only against the group, but also personally against the VW brand director Ralf Brandstätter.

The plaintiff is the Bosnian supplier group Prevent, which has been in a heated dispute with Volkswagen for years, in which both sides pull out all the stops – including threatening gestures, production stops, secret task forces and numerous lawsuits.


Background: The battle between Volkswagen and Prevent

The Bosnian supplier Prevent supplied Volkswagen with seat covers and car windows for many years, did not want or could no longer bow to the price pressure from Wolfsburg from 2013 and protested against VW. Prevent threatened to stop production and made it come true three years later. For Volkswagen it was an outrageous process that was not without consequences. NewsABC.net has VW documents and 50 hours of internal audio recordings that show that Volkswagen has been working on replacing Prevent since 2013. From 2016 a special unit called “Project 1” was used to dismantle the supplier. For the Wolfsburg-based company, it was clear that the world’s largest automaker should never again be so helpless. Never again should Prevent paralyze production.


In the complaint, the Bosnians accuse Volkswagen of having made unfair agreements with the world’s two largest suppliers of seat covers in order to force Prevent out of the US market. The two suppliers are Adient and Lear Corporation. The alleged overarching goal of the Wolfsburg: the “destruction” of the Bosnian company, it says in the lawyers’ complaint. The removal of Prevent from the US market is said to have been an integral part of “Project 1”. The Bosnians blame VW brand boss Ralf Brandstätter personally as the head and mastermind behind this campaign. The application is before NewsABC.net.

Brandstätter is said to have incited Adient and Lear personally to boycott

According to the complaint, Volkswagen was supposed to have proceeded wisely when it was dismantled from Prevent in the USA, because the group did not initiate this directly itself, but rather encouraged larger suppliers in the production chain to do so, Adient and Lear. The two groups are so-called “Tier 1” suppliers, the largest in their branch. Prevent was a “Tier 2” supplier in the USA and supplied Adient and Lear seat cover components, which the two groups processed into finished covers and delivered to Volkswagen.

Prevent accuses Volkswagen and Ralf Brandstätter of having instigated Adient and Lear to break off relations with Prevent. Brandstätter phoned Adient and Lear managers personally to convince them of the boycott, the indictment said. As of 2018, both suppliers had virtually no business with Prevent.

The Bosnian lawyers argue in the complaint that Adient and Lear took over Prevent’s business themselves. Volkswagen has assured them that they will be awarded the contract outside of the mandatory tendering process in the USA.

According to Wolfsburg’s will, the two “Tier 1” suppliers should not only have excluded Prevent from the VW business, but should also have completely broken off the business relationship. Prevent also manufactured seat cover components for Adient and Lear that went to other car manufacturers.

It is about a damage volume of around 500 million US dollars

Prevent claims damages of $ 180 million in the lawsuit. Money that they supposedly earned from continued business relationships. The spicy thing: Because the case affects US competition law, the amount of damage that Prevent is fighting could be tripled, say the US lawyers for the Bosnians. According to a clause in competition law, Prevent wants to collect around half a billion dollars in damages.

“This lawsuit reveals a new chapter in Volkswagen’s ‘Project 1’ strategy that Prevent was supposed to destroy. This time, Volkswagen recruited Adient and the Lear Corporation, two of the largest auto suppliers in the world, to drive our client out of the seat cover market, ”said Duane L. Loft, Prevent’s US attorney.

Volkswagen reacted calmly to NewsABC.net’s request and pointed out that the lawsuit in Wolfsburg was not yet available. “We have not yet been served with any new lawsuit in the United States and consequently we have no knowledge of the content you cited. The dispute about the termination of the business relationship between Volkswagen and the Prevent Group has been the subject of numerous legal proceedings before various courts and in several instances in Germany, in which Prevent was unsuccessful in the matter, ”said a company spokesman. “From our point of view, such a US lawsuit would be just another constructed attempt to bring the dispute to the USA.”

Following a request from NewsABC.net, Adient pointed out that the company generally does not comment on customer relationships. The Lear Corporation left a questionnaire unanswered.

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