From The Detroit News
TROY, MI -- Adding to Delphi's worries, rival Johnson Controls Inc. is suing the Troy, MI-based auto parts supplier for selling batteries in violation of a sale agreement between the two companies.
Three months ago, JCI bought most of Delphi's starting, lighting and ignition lead-acid batteries in a $200 million acquisition that also barred Delphi from selling such batteries to anyone other than Johnson Controls for five years.
But in a lawsuit filed on Friday with the U.S. District Court for the Eastern District of Michigan, Johnson Controls claimed Delphi had sold thousands of batteries to others, included "blemished," or slightly defective, batteries that it alleged did not carry warning labels.
"Despite clear notice from JCI, Delphi has indicated that it intends to continue selling an additional 7,000 BLEM (blemished) batteries immediately and then approximately 5,000 batteries monthly to brokers and customers in the used battery market," Johnson Controls said in its lawsuit, asking the court to restrain Delphi from continuing to sell the batteries.
Delphi spokesman Dave Bodkin declined to discuss the case. "We don't comment on pending litigation," he said.
The batteries are produced at two Delphi plants in New Jersey and Georgia that the supplier retained after the deal.
But Johnson Controls said the agreement envisaged that it would be the sole buyer of those batteries. It said it was "significantly and irreparably" injured by Delphi's battery sales, which it alleged constitute an infringement of its intellectual property rights, breach of contract and unfair competition.
"As far as JCI can determine presently, it has already lost significant business and is faced with losing additional business," it said.
JCI officials did not return phone calls seeking comment. The purchase of Delphi's battery assets boosted Johnson Controls' leadership in the global business.
2005 The Detroit News. All Rights Reserved.
_______________________________________
Click here to view the rest of today's headlines.
