Ford said to pay German supplier Mitec $12M to end legal dispute

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Ford Motor Co. has paid a former supplier, Mitec, about 10 million euros ($11.8 million) to settle a 13-year dispute over a canceled contract, Germany’s Welt am Sonntag reported.

Ford declined to comment on the payment when contacted by Automotive News Europe. The automaker said the terms of the settlement were “confidential.”

Mitec supplied Ford with a component for the Mazda6 sedan, which Ford built in the U.S. in a joint venture with the Japanese automaker in Flat Rock, Mich. Mitec sued Ford after the automaker terminated the contract in 2007.

Ford rejected the part because of quality issues but the supplier then discovered the same part being built for Ford by the supplier Linamar in Mexico, Mitec said. The supplier accuses Ford of having passed on technical information with the aim of being able to purchase the parts more cheaply from Mexico.

Mitec’s former owner, Michael Militzer, said the settlement was too little and too late.

The legal dispute with Ford had “cost Mitec its existence,” he told Welt am Sonntag. Mitec filed for insolvency at the end of 2018.

“Ford is only paying 10 million euros, although the damage is certainly 80 million to 100 million euros,” Militzer told the paper. The insolvency administrator “was clearly only interested in getting at least a little money as quickly as possible,”  Militzer said. The insolvency administrator declined to comment on the settlement to the Welt am Sonntag.

The Mitec component at issue is a mass balancing system used to attenuate engine noise and vibration. Mitec is a world leader in balancing systems, supplying Ford, General Motors, Volkswagen, BMW, Daimler, Mazda and other companies.

Detroit-based supplier American Axle & Manufacturing has taken over parts of the company and about 250 jobs have been saved, according to the local branch of the IG Metall union.

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Saurabh Shukla

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