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Porsche off says BMW in retaliation.

BMW has retaliated against Porsche for its complaint to the EU about the Government's pounds 152 million aid package for Rover's Longbridge plant.

Porsche has been told by BMW that it will not renew its contract to make body parts for the Porsche Boxster.

BMW was annoyed with Porsche's letter to the EU Competition Commissioner, Mr Mario Monti, which claimed the Rover aid package was unfair competition and vehicle manufacturers should not receive aid from governments.

The package is expected to get EU approval in late May or early June.

Prof Joachim Milberg, chairman of BMW, said the contract for body parts used in Porsche's Boxster sports car had been accepted because BMW's press plant at the time was not fully utilised.

"Now it is different. We will have to discontinue the Boxster deliveries," said Prof Milberg. "We were more than astonished at Porsche's action, above all the arguments made against the UK aid.

"Porsche ought to know this state package is only a form of regional assistance. This type of assistance was also received by Porsche for Boxster production in Finland."

A spokesman for BMW said: "Porsche have been aware for some time of our decision not to renew their contract for the body parts. The contract covers making most of the body parts and delivering them.

"Our decision does not involve Rover directly but BMW has said that it needs the capacity for its own manufacturing needs."

BMW has effectively told Porsche to look elsewhere for its body parts and motor industry observers believe BMW is retaliating against Porsche's comments to the EU.

The contract started in 1995 and ends on July 1 next year. Porsche is already looking for another supplier.

BMW is still besieged by unfounded reports and suggestions that the company has plans to sell out to one of is competitors.

The Quandt family, BMW's biggest shareholder with about 47 per cent, issued another denial yesterday that had no plans to sell its stake.

A spokesman for the family, Dr Thomas Gauly, said: "Now, as before, there is no reason why the Quandt family should want to sell its holding in BMW."

Dr Gauly was responding to claims that Ford has offered the family 50 euros per share (about pounds 81) for its holdings.

A BMW spokesman also said: "We know from very reliable sources the Quandt family will not accept any offer, and definitely not from Ford or from Volkswagen."

Toyota UK issued a statement yesterday following an interview given by Mr Koji Hasegawa, a Toyota managing director for Asia, who said the company would be looking to buy more parts in Asia.

A Toyota spokesman said that as far as Europe was concerned there would be no "significant change in policy towards its suppliers".

Toyota, which has a plant at Burnaston, near Derby, has more than 200 suppliers in ten European countries and about half of them are in the UK. They have a total market of pounds 875 million annually for parts, components and raw materials.
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Publication:The Birmingham Post (England)
Date:Feb 19, 2000
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