Automotive News - January 28, 2008 - (Page 45) JANUARY 28, 2008 • 45 Court: Claim release in product suit covers suppliers, too Eric Freedman freedma5@msu.edu When Mark Schomburg was injured in a rollover accident in his Chevrolet Blazer, he and his wife sued General Motors, alleging the Blazer’s roof was defective. They settled that case, but a year later sued TRW, alleging the seat belt the company had supplied the Blazer had failed. Now an appeals court has rejected that second suit. The Texas Court of Appeals has ruled that the release Schomburg and his wife signed when they settled their federal product liability lawsuit with GM covered claims against all the manufacturer’s “component suppliers.” The three-judge panel rejected plaintiffs’ argument that the release cannot be enforced because it did not specifically name TRW Vehicle Safety Systems Inc. The plaintiffs have asked the court to reconsider its decision, according to their lawyer, Charles McGarry, of Dallas. He told Automotive News that the panel’s decision misinterpreted or was inconsistent with earlier court rulings. 2nd suit doesn’t fit Issue: Can plaintiffs who settled their product liability lawsuit against General Motors and signed a release pursue a claim against seat belt supplier TRW? Where it stands: Texas appeals court says no. Plaintiffs have asked the court to reconsider, their lawyer says. The case stems from a 2003 accident in which another vehicle struck Schomburg’s 1998 Chevrolet S10 Blazer. Schomburg lost control of the Blazer and was seriously injured when it rolled over several times. David Tippetts, a Houston lawyer who represents TRW, said in an interview that GM had an interest in getting all claims resolved on behalf of itself and its component suppliers. He also said that both suits involved the issue of whether the vehicle was crashworthy. A judge in Dallas County District Court dismissed the second case without trial, citing the release. In upholding that decision, the Court of Appeals said the term “component suppliers” in the release was sufficient to identify TRW, which had supplied the Blazer’s seat belt restraint system. “A release is a complete bar to any later action based upon matters covered in the release,” Justice Carolyn Wright wrote for the court. “Although the release does not name TRW, it identifies a specific group who supplied parts for the manufacture of a specifically identified vehicle. “It was this vehicle and seat belt restraint system that were alleged not to be crashworthy in both the lawsuits against GM and TRW. TRW is readily identifiable from the description.” c Continental’s William Kozyra: “We will overachieve” the company’s cost savings goal of $250 million by 2010. Conti exec: Siemens VDO purchase pays off fast David Barkholz and Robert Sherefkin dbarkholz@crain.com DETROIT — Continental AG is ahead of schedule when it comes to identifying potential cost savings from last year’s purchase of Siemens VDO Automotive. By combining the two German suppliers, Continental had expected to find $250 million in savings by 2010. Now, it expects to exceed that figure by 2010, said William Kozyra, CEO of Continental’s North American operations. “Our preliminary assessment is that we will overachieve that figure,” he said in an interview here last week at the Automotive News World Congress. Kozyra said that Continental is finding overlap in its manager ranks. He declined to talk about specific plans to reduce head count. The Continental and Siemens VDO hookup creates the world’s fifthlargest auto parts supplier with global sales of $23.48 billion in fiscal 2006. The new company has leadership positions in tires, electronic stability control, fuel injection, transmission control, telematics and sensors. Robert Bosch GmbH, a close competitor, is the world’s largest automotive supplier with sales of $29.69 billion in fiscal 2006. Continental paid $16.71 billion for Siemens VDO last year. Kozyra disputed analysts who say Continental paid too much to keep Siemens from falling into the hands of TRW Inc. “Look at the value of the business,” Kozyra said. “We believe we paid a very fair and appropriate price.” He said Siemens VDO earns a profit of 7 percent before interest and taxes. While that is less than Continental’s10 to 11 percent margin, Kozyra said, putting the businesses together will help the combined company achieve 10 to 11 percent within a few years. c
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