Mercedes sues Cobasys over battery deal
Dispute could delay launch of ML450
The suit also says that Mercedes-Benz “understands that a buyer for Cobasys has now been located, and that a sale of Cobasys is now imminent.”
Cobasys, a joint venture between Energy Conversion Devices Inc. and the venture-capital arm of Chevron Corp., builds batteries for General Motors’ mild hybrid sedans. Automotive News reported in June that GM was nearing a deal to buy Cobasys, but no agreement has been announced.
Last winter’s woes
Energy Conversion Devices and a Chevron subsidiary, Chevron Technology Ventures, have been fighting over who is responsible for funding Cobasys. Trouble at the suburban Detroit company slowed production last winter of three GM mild hybrids: the Chevrolet Malibu Hybrid and Saturn Aura Green Line car and Saturn Vue Green Line crossover. Battery leakage also forced GM to recall 9,000 vehicles.
In a letter attached to the suit, Mercedes secretary W. Lee Thurston says “there is no viable or commercially reasonable alternative source for supply which will allow MBUSI to meet its launch dates.”
Cobasys executives could not be reached for comment. In a reply dated July 9 to Thurston’s letter, Cobasys CEO Thomas Neslage wrote that Cobasys had stopped working because Mercedes-Benz had not paid invoices. Cobasys also denies that it agreed to produce the batteries for Mercedes, a unit of Daimler AG.
In the suit, Mercedes-Benz says Cobasys agreed to produce and deliver batteries when it responded to a request for price quotes in 2006. Mercedes also says it paid Cobasys about $6 million “in connection with the development of the battery pack for production.”
But after months of discussions and price adjustments, Cobasys told Mercedes-Benz in December that it wouldn’t sign the purchase order because of the dispute between Chevron and Energy Conversion Devices, the suit alleges.
Lawsuit: Cobasys lied
Mercedes-Benz says Cobasys lied about the state of its business in order to keep a potential customer.
The suit says: “The intention of Cobasys’ owners and their representatives on the board was to hold MBUSI as a significant customer for Cobasys in the event that a prospective buyer of Cobasys wanted to make sales to MBUSI, while avoiding any additional commitments to MBUSI in case Cobasys’ buyer preferred instead to renegotiate or drop MBUSI as a customer entirely.”
Mercedes-Benz spokeswoman Felyicia Jerald would not comment on the case beyond a short statement sent to reporters.
In it, she said the company, of Tuscaloosa, Ala., “remains committed to production of its hybrid vehicle and is working diligently with all of is suppliers in order to meet our goals. The hybrid battery to be supplied as agreed by Cobasys is an obvious component of this launch.”
The lawsuit, she said in the statement “became necessary in order to protect the business interests of MBUSI and prior amounts invested in our hybrid vehicle.”