Tesla, Fisker in Battle Over Trade Secrets

Considering how often auto executives jump ship to a competitor, which is quite often, it's a wonder there aren't a lot more charges of "industrial espionage" flying around. The latest case involves the high-profile, electric-car upstart Tesla Motors, which on April 14 filed suit in the Superior Court of California against Fisker Automotive Inc., alleging fraud, breach of contract and violating trade secrets. Fisker Automotive has not yet filed a reply. The two small companies are fighting over plans for high-performance, battery-powered cars.

Among the giant automakers, there are fewer and fewer real secrets. For people who follow the industry, for instance, it's completely predictable when an existing model is due for a facelift or a replacement.

The car companies, even bitter rivals like Toyota Motor Corp. and General Motors, also participate in joint ventures like the 24-year-old New United Motor Manufacturing Inc. plant in Fremont, Calif., which builds the Toyota Corolla and the Pontiac Vibe; or the recently announced deal I discussed here last week, where Chrysler LLC will build a full-size pickup for Nissan Motor Corp., and Nissan will build a small car for Chrysler. The automakers also have many suppliers and dealers in common.

However, there are still secrets worth protecting. In the complaint, Tesla says it hired Fisker Automotive and CEO Henrik Fisker to work on a future Tesla model called internally its WhiteStar project, designed to be Tesla's second model. Its first, the high-performance, battery-powered Tesla Roadster, is scheduled to go on sale in late 2008 -- if the $98,000 Roadster is ready on time, after several delays.

Imagine Tesla's surprise, according to the lawsuit, when Fisker, a former designer for BMW AG, announced at a Jan. 14 press conference at the Detroit auto show that he will introduce his own high-performance, battery-powered car, called the Fisker Karma, starting around $80,000, starting in 2009.

According to Tesla's complaint, "The Karma has great similarities to the WhiteStar and will be a direct competitor to the WhiteStar in the marketplace."

The most spectacular industrial espionage accusations in modern memory involved General Motor purchasing czar Inaki Lopez, who left GM in 1993 for Germany's Volkswagen AG. GM accused him of taking boxes of GM documents with him. According to Automotive News, Lopez said the boxes contained personal property, and Lopez accused GM of backing out of an agreement to build a factory in the Basque region of Spain. The case was ultimately settled.

Today, the Detroit 3 are eliminating tens of thousands of blue-collar and white-collar jobs. Assuming at least some of those people land at a different company in the auto industry, there will be a lot more cross-pollination, among the automakers themselves, and between the automakers, their suppliers and related businesses.

Besides having to handle the dirty end of all the downsizing, human resources managers in the auto industry must have their hands full, devising iron-clad non-compete and non-disclosure agreements.