GM accusing car hauler of keeping 1,704 new vehicles hostage

Article by Christian Andrei, on March 24, 2011

General Motors Co. filed a lawsuit in federal court in Detroit against car hauler Allied Systems Holdings, asking them to return 1,704 new vehicles they supposedly kept after the carmaker terminated the carrier's contract. These vehicles are valued at $46.6 million. The models include the Chevrolet Silverado pickup built in Fort Wayne, Ind., and the Chevrolet Camaro built in Oshawa, Ontario.

Meanwhile, Chrysler Group claims that Allied is holding about 500 vehicles stored in Windsor, Ontario. The conflict stemmed from Allied Systems’ demand for a price increase, which companies refused to accept.

Spokesman Dan Flores said that Allied Systems is holding about 1,650 GM vehicles at a storage site in Dearborn, Mich., and about 50 at a site in Fort Wayne, Ind.

Flores said that Allied has failed to turn over these vehicles, and as a result, GM sued the car hauler in federal court to release the vehicles as well as pay for damages that may be sustained due to Allied's breach of its contract.

On March 17, GM terminated its contract with Allied and started seeking replacement carriers, after the company refused to deliver vehicles.

The replacement carriers have already started pickup and deliveries. In the lawsuit, GM asserted that Allied's refusal to release the vehicles to GM will cause harm to third parties, including dealers.

GM said that without getting immediate access to and possessing the vehicles, these dealers may “suffer immediate and irreparable harm, including loss of goodwill and damage to customer relations.”

Topics: gm

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