Entrepreneur Malcolm Bricklin's Visionary Vehicles has filed a lawsuit accusing China's Chery Automobile Co. of defrauding the company after the two formed a joint venture to import Chinese cars to the United States.
In the lawsuit filed Sunday in U.S. District Court in Detroit, Visionary Vehicles said it lost more than $26 million in investments and billions of dollars in potential future profits due to deceptive and corrupt practices by Chery during the joint venture.
“We brought them people, we brought them money, we brought them ideas, we brought them everything we were supposed to, and they took everything, and it's a real shame,” Bricklin said Monday at a news conference in New York.
Attempts to reach Chery representatives by phone in the United States and China were unsuccessful, and an e-mail seeking comment from Chery was not immediately returned.
Bricklin formed the venture with Chery in 2004 to import its cars to America as early as 2007, but the deal fell through.
When the endeavor was called off in November 2006, a Visionary Vehicles spokeswoman said the two sides disagreed over the extent to which Chery's automobiles would be modified.
The lawsuit, however, alleges that Chery used the publicity from the joint venture to cut New York-based Visionary Vehicles out of any plans to import cars into the United States. It instead sought partnerships with other U.S. automakers, including Chrysler LLC and Longmont, Colo.-based Quantum LLC, the lawsuit says.
A spokesman for Chrysler, which is not named as a defendant in the lawsuit, declined to comment. A phone message left at a telephone number listed for Quantum, which is a defendant, was not immediately returned.
Visionary Vehicles is suing Chery under an anti-corruption and racketeering law that would allow a jury to triple the damages normally awarded in a civil case, said Fred Schwartz, an attorney representing Bricklin's company.
The lawsuit, which seeks unspecified monetary damages, accuses Chery of using Visionary Vehicles to obtain plans and information about the U.S. auto market. It also says Chery repeatedly stole plans for vehicles from U.S. automakers, saying its “operating modus has been to serially plunder Western technology.”
“Throughout its short history, Chery and its top management and others working in concert with it have systematically broken contractual obligations, stolen plans for vehicles, made cars designed by Western companies without paying for their rights and made deals without the slightest intention of carrying them out,” the lawsuit says.
By the time the partnership fell through, Visionary Vehicles had already sunk $26 million in the joint venture and was to lose more than $14 billion in potential profits, according to the complaint.
“At the end of the day, Chery is dancing with a new partner and we have a lot of bills and no profits,” said Andrew Kochanowski, another attorney for Bricklin's company.
Bricklin, perhaps best known for introducing both the Subaru and the Yugo to U.S. consumers, said in he has abandoned his quest to import Chinese cars and has instead turned his efforts to developing plug-in hybrid electric vehicles.
Bricklin said he is hoping to develop a marketable plug-in hybrid by 2010 and is working to develop a network of dealers and the battery technology, which he acknowledged is still years away.
The eventual product will be designed and produced in the U.S., Bricklin said, noting that the botched deal with Chery has turned him off to imports.
“We want to export, not import anymore,” he said.
