Suzuki seeks arbitration against VW

[WookieOnRitalin]

I am not sure if any of you have been following this story closely, but I have since VW bought a controlling stake in Suzuki a couple years ago. The partnership has been a catastrophe and has held up Suzuki from putting out new product in new markets because of VW accusing Suzuki of contract violations at every step. So Suzuki wants to split and split quick.

More at link.

http://www.yomiuri.co.jp/dy/business/T111125004559.htm

Takeyuki Hitokoto and Yoichiro Kagawa / Yomiuri Shimbun Staff Writers


Suzuki Motor Corp. Executive Vice President Yasuhito Harayama, center, speaks to reporters Nov. 18 in Chiyoda Ward, Tokyo.
A wide gap remains between Suzuki Motor Corp. and Volkswagen AG over terminating their business partnership, with Suzuki wanting to end the dispute quickly and VW demanding long-term discussions.

Suzuki sought arbitration Thursday by the Paris-based International Court of Arbitration over its demand that VW, which is the largest shareholder in suzuki, should sell its stock.

Economists predict it will take nearly two years to terminate the automakers' business partnership, now that the trust between them has broken down. The issue will likely affect the structure of the automobile industry during that period.

Suzuki believes it is urgent to terminate its business tie-up with VW, feeling a delay may adversely affect its cooperation with other companies.

"If we try to procure diesel engines or other parts from other companies, VW may accuse us of contract violation again," Suzuki Executive Vice President Yasuhito Harayama said.

The protracted dispute has been interfering with Suzuki's management strategy. Also, it is difficult for Suzuki to form new partnerships with other automakers while VW continues to be the largest shareholder.

Thus Suzuki decided that filing for arbitration would be beneficial to its management strategy, even if the process takes 18 months to two years.

Suzuki has begun distancing itself from VW in the field of eco-friendly cars. For example, Suzuki is supplied by Mitsubishi Motors Corp. with electric minivehicles, which MMC launched Thursday, on an original equipment manufacturer basis.

A VW spokesperson said the German automaker was deeply disappointed by Suzuki's seeking arbitration and was confused as to why it would do so. The spokesperson also reiterated VW's intention to continue holding shares in Suzuki

[Onslaught]

I know nothing about this. But I say fuck VW. Just because I don't like them. 

[Submariner]

The Kizashxicivhsidufi7isnsofhsnfishai is a really great little car.

That's the only contribution I have for this thread.

[AutobahnSHO]

haha So one partner totally wants out because partner #2 is being overly controlling, but partner #2 doesn't see why #1 wants to leave..

Too bad for Suzuki. And as their business is adversely affected, that can't mean any good for VW.

[2o6]

If I'm right, VW is the reason we have no new Swift in the USA. Suzuki was pretty much done with engineering changes and pricing for our market, then VW stepped in and wanted to take a look at it.


http://www.autoblog.com/2010/08/30/report-suzuki-swift-delayed-in-the-u-s-again/

[93JC]

I am not sure if any of you have been following this story closely, but I have since VW bought a controlling stake in Suzuki a couple years ago.

It's not a controlling stake, it's only 20%. If it was a controlling stake these issues would not exist.

My hypothesis is that VW is "pulling-a-Daimler" on Suzuki, or at least trying to. VW has claimed so far that everything is amicable and they're very happy, blah blah blah, and all the while Suzuki has gotten the shaft from VW.

Where this feud really started was when Suzuki decided to continue procuring diesel engines from Fiat. Suzuki had been buying Fiat diesels for years and their original agreement was about to lapse. Suzuki did the math and decided it was more prudent to continue buying diesel engines from Fiat. VW looked at the situation and went "Whoa whoa whoa, you guys are a VW subsidiary now, we can't have you going around buying engines from other companies," never mind the fact Suzuki would have already considered buying VW engines and presumably found it wouldn't have been as good a deal.

VW has nothing to offer Suzuki; I would want to end this 'agreement' ASAP too.


Supposedly VW kiboshed Suzuki's plans to sell the Swift in North America because they wanted to 'synergize' the marketing and pricing or some such BS. I suspect VW doesn't want the competition and would rather bury Suzuki outside of Asia and gobble them up entirely in order to acquire Maruti Suzuki.

[Onslaught]

It's not a controlling stake, it's only 20%. If it was a controlling stake these issues would not exist.

Aren't the Japanese rules about controlling stake different then here. I know Ford had controlling stake in Mazda without having all that much.

[93JC]

Depends on the articles of incorporation of the company, but the default for Japanese corporations is to require a 2/3 super-majority of voting shareholders to approve resolutions. Ford owned, for a time, just a little more than a third of Mazda's shares. This wasn't a 'controlling' share, in that Ford couldn't unilaterally approve any corporate motion it wanted, but they could veto anything they wanted.

As I understand it Japanese corporations are notoriously difficult to merge with or take over entirely because there are often clauses in their articles of incorporation requiring 75% (or more!) of voting share approval.



Still, despite the veto power of their stake Ford (to my knowledge) never dictated Mazda's business like VW is trying to do with Suzuki.

[sparkplug]

VW needs to put up or shut up.

[Xer0]

When this thing first happened I was hoping to see a Kizashi with the 2.0TSI powering it.  Now that would have been awesome.

But alas 

[Tave]

I haven't followed it from the beginning, but I just read a blurb in Automobile about the Fiat engine fiasco the other day.

[2o6]

I wonder if that's the reason VW is trying to stop the Swift. (Swift uses a Fiat diesel)