General Motors is taking legal action against Allied Systems, Ltd. over a payment dispute that’s turned ugly. Somewhere along the way $47 million worth of GM product was “lost”, being kept off the dealer lots and out of consumers’ hands. The vehicles are currently in limbo, otherwise known as Dearborn, Michigan and Fort Wayne, Indiana.
Here’s the chain of events: 1) Teamsters union wouldn’t accept Allied’s wage concessions, 2) Allied tries to resolve money issue by charging GM 15% more for services, 3) GM “declines to pay”, 4) Allied declines to deliver vehicles.
Dan Flores, a spokesman for the General, said, “Last Thursday Allied Systems ceased providing transportation services to GM. As a result GM took immediate steps to resource the work previously performed by Allied. Allied was in possession of 1,700 vehicles.”
As you can imagine, 1,700+ undelivered vehicles could be significantly detrimental to a company that is still trying to re-establish a sturdy foothold and respected image in the market. The end result of all this? BAM, lawsuit; one that Allied apparently can’t afford.
According to GM attorney Daniel Linna, “The calculable damages resulting from Allied’s refusal to meet its obligations to return the vehicles to GM will be substantial and…likely beyond the financial ability of Allied to satisfy, further rendering GM without an adequate legal remedy.”
GM wants the vehicles returned and to have all costs and damages paid for. In the meantime, the General is working with new shipping partners to assist in vehicle delivery.
By Phil Alex
Source: Detnews , Photos: GM Archive
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