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GM liquidator sues BMW over gearbox supply contract

News | February 1st, 2010 by 7
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The company charged with selling off General Motors’ unwanted assets, Motors Liquidation Company, is suing BMW for breaking the terms of a contract to buy …

The company charged with selling off General Motors’ unwanted assets, Motors Liquidation Company, is suing BMW for breaking the terms of a contract to buy gearboxes.

MLC has filed a suit against BMW at New York’s bankruptcy court, disputing a reduced order for gearboxes from the GM Powertrains factory in Strasbourg, France.

Reports suggest that MLC is seeking 1.38 billion dollars in damages, around 1 billion euros at the current exchange rate. GM has stated that the final figure has yet to be set.

GM liquidator sues BMW over gearbox supply contract

In 2004, BMW signed a deal with GM Powertrains for 200,000 six-speed gearboxes for the first generation BMW X3. The BMW contract accounts for 60 percent of the workload at the Strasbourg factory.

Back in 2007, it is said that BMW has reduced the order to 150,000 gearboxes, hence the lawsuit by GM.

The suit suggests the manufacturer should buy more than 200,000 gearboxes a year when the car market recovers or make up the lost orders in other ways — or face a claim for financial compensation.

German publication Wirtschaftswoche quoted MLC as saying in the lawsuit that BMW constantly raised its technical demands, while an anonymous BMW source told the magazine the GM gearboxes were not up to standard — a claim denied by MLC.

In the next few days, BMW will most likely issue an official response.

[Source: MarketWatch ]

  • Doug

    Very interesting tha tthe liquidator is suing. It’s not clear what grounds they have for suing, but apparently they’re squeezing money not just from assets but from contractual ambiguity.

  • :p

    The one thing that the US will continue to best at is sueing

  • Bolfer

    Had Americans put more energy and effort into designing and engineering cars instead of making pointless lawsuits, GM and Chrysler won’t be where it is today.

  • Joe

    Liquidator suing ? Wow… Guess they get a nice % of teh dollars..

  • http://www.facebook.com/profile.php?id=1355344571 Alexander Phillippe

    Silly GM, you guys should’ve just went down swingin’

  • Kyle

    @ :P

    you are just so clever, do you write all your own stuff?

    does seem like the lawsuit is just to try and salvage some dollars out of a declining situation for the liquidator, of course they are going about it the wrong way.

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