Entrepreneur Bricklin sues Chery over failed deal
DETROIT (Reuters) - Entrepreneur Malcolm Bricklin, best known for bringing the low-cost Yugo car to America, has filed a lawsuit against China's Chery Automobile Co over a failed deal to export cars to the U.S. market.
The lawsuit, filed in federal court in Detroit on Sunday, alleges that Chery used Bricklin's company Visionary Vehicles as a "stalking horse to obtain a better and more lucrative deal with someone else."
The lawsuit seeks damages, including a $26 million initial investment by Visionary and the loss of projected earnings of about $1.1 billion as a result of the failed deal.
A representative for Chery was not immediately available for comment.
Bricklin has a long but mixed record importing and selling cars in the United States. His most successful venture to date has been the launch of Fuji Heavy Industries Ltd's (7270.T) Subaru brand in America in the late 1960s. Chief among his flops was the Canadian-made Bricklin SV-1 sports car, which was in production for a mere two years.
Bricklin and Chery began negotiations in 2004 over a joint venture targeting production of cars in China for the U.S. market, with a goal of selling 150,000 as early as 2007.
The deal attracted widespread attention because it put Chery in a position to become the first Chinese automaker to sell cars in the United States, the world's largest market.
Chery has since struck deals with Chrysler LLC and Quantum LLC aimed at bringing cars to the U.S. market.
Chery announced a tie-up with Chrysler [CBS.UL] last year under which the U.S. automaker would modify one of the Chinese automaker's small cars so that it could be ready for export from China. But progress in readying the Chery-built vehicle stalled, and Chrysler announced another tie-up on a small car with Nissan Motor Co Ltd (7201.T).
Separately, Chery has also agreed to set up a car manufacturing joint venture with Quantum, a unit of Israel Corp, a holding company investing in shipping and transportation.
In his lawsuit, Bricklin claims Chery, Quantum and others conspired to cut his firm out of what would have been a lucrative deal to export lower-cost luxury-style vehicles to the U.S. market.
The lawsuit says that Visionary Vehicles ran out of cash because of delays in the failed deal.
Bricklin has renamed the firm V Cars LLC and shifted its focus to the development of electric cars.
(Reporting by Kevin Krolicki and Soyoung Kim, editing by Gerald E. McCormick)
- Tweet this
- Share this
- Digg this
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- California lawmakers end session with bills on plastic bags, gun control
- India nears $2.5 billion deal for Boeing military helicopters
- CBI charges Dayanidhi Maran, Malaysian tycoon in telecoms scandal
- Saudi king warns of terrorism threat to U.S., Europe
A day after the best economic growth figures in more than two years greeted Prime Minister Narendra Modi's first three months in office, the finance minister on Saturday predicted faster growth to come. Full Article
Exclusive: Reliance plans $13 billion projects including new refinery. Full Article
In race for bigger margins, drug makers willing to lose the India "advantage". Full Article