PGW Files Lawsuit Against Henniges over Germany-based Contract Dispute

In the U.S. District Court for Southern New York, Pittsburgh Glass Works (PGW) has filed a complaint alleging that German-based Henniges Automotive GmbH & Co. KG “embarked on a campaign of wrongful conduct designed to extort money and concessions from PGW not contemplated by the parties’ prior agreements, and ultimately to renege on its obligations to work with PGW for the duration” of an automotive assembly services master service agreement for an OEM’s luxury product line in Germany.

“In 2008, after an extensive bidding process, PGW was selected as a first-tier supplier for a major automobile manufacturer’s new business—model glass (NBM) program for its luxury product line, under which PGW would supply the basic glass windshield and option list for each glass part built for 80 percent of new vehicles and facelifts beginning in 2011. Henniges, which also participated in the process, albeit unsuccessfully as a first-tier bidder, later bid to become PGW’s supplier of glass assembly and related services (for the deal). Based on its bid and representations to PGW, Henniges was awarded the 80 percent of the business sourced to PGW under the NBM. As a result the parties entered automotive assembly services master service agreement (MSA) dated December 15, 2009, to govern their business venture,” PGW’s attorneys alleged.

“[B]eginning in or around late summer/early fall 2011, however, Henniges embarked on a campaign of wrongful conduct designed to extort money and concessions from PGW not contemplated by the parties’ prior agreements, and ultimately to renege on its obligations to work with PGW for the duration of the NBM,” PGW’s attorneys alleged. “Henniges also breached its obligations under the MSA by repeatedly delivering defective product, which in turn caused both monetary and reputational damages with respect to PGW’s relationship with manufacturer. As a result of Henniges’ wrongful conduct, PGW has and will suffer significant damages, including damages resulting from product defects, changes to supplier sourcing, and other damages incurred in addressing Henniges’ improper actions.

“[U]nable to identify any acceptable alternative suppliers, PGW has been forced to invest substantial capital to do Henniges’ work internally at a PGW facility in Poland, far away from the manufacturer plants (in contrast to Henniges current relative proximity and its close proximity after construction of the required new facility in Germany). These efforts have begun, and are continuing, and will result in approximately $30 million USD in damages to PGW,” the company’s attorneys allege.

PGW is seeking:

—“An order declaring that Henniges has breached its contracts with PGW as set forth above by, among other things, repudiating the MSA and its other contracts;

—An order declaring that Henniges has breached its duty of good faith as set forth above by, among other things, dealing with PGW in bad faith with respect to pricing, requiring PGW to pay Henniges’ capital costs in order for Henniges to fulfill its contractual obligations, and otherwise engaging in an extensive scheme to evade its obligations under the MSA and the parties’ other agreements;

—An order declaring that Henniges fraudulently induced PGW to enter into the MSA and the parties’ other agreements;

—An order declaring that Henniges breached its warranties and must indemnify PGW for losses relating to the W204 failures including, but not limited to, the manufacturer debit based on those failures;

—Damages in an amount to be proven at trial, to compensate PGW for Henniges’ breaches of contract and other wrongful conduct;

—Interest on PGW’s damages to the maximum extent permitted by law; and

—Any further relief that may be just and proper.”

Henniges denies the allegations.

“The complaint fails in whole or in part to state a claim upon which relief can be granted,” Henniges attorneys respond.

“[A]ny and all defendants’ actions challenged by plaintiff were lawful, justified, constitute bona fide business practices and were carried out in furtherance of defendant’s legitimate business interests,” Henniges attorneys allege.

Henniges has asked the court to find in favor of the company, award defendant costs and reasonable attorneys’ fees and “grant such other and further relief as may be just and proper.”

To read PGW’s complaint, click here.

To read Henniges’ response, click here.

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