Thursday, September 13, 2007

Ouch! - The Cost of Industrial Espionage

McLaren have been stripped of their points in the 2007 Formula One constructors' championship after the outcome of the 'spygate' row with rivals Ferrari. The team were also fined a record $100m, which includes any prize and television money they would have earned from the constructors' championship.

The size of the fine recalls memories of a bitter dispute between General Motors and Volkswagen in the 90s, when the former accused the latter of industrial espionage. Jose Ignacio Lopez de Arriortua, head of purchasing for GM, defected to VW in 1993, allegedly with more than 20 boxes of documents on research, manufacturing and sales! (If he had waited a few yesars he could have taken it out on a flash stick!!)
Much of the allegedly pilfered data involved blueprints for a super-efficient assembly plant--a factory that GM believed would topple VW's dominance of the small-car market in emerging markets of Eastern Europe, China and elsewhere.

The world's largest international corporate espionage case officially ended in 1997, when VW admitted no wrongdoing but settled the civil suit by agreeing to pay GM $100 million in cash and spend $1 billion on GM parts over seven years.