Judge dismisses GM case against Steel Dynamics
According to recent news in the market, a judge in Michigan, US has dismissed a lawsuit that car maker General Motors Corp (GM) brought against Steel Dynamics Inc. (SDI)
As SteelOrbis previously reported back in March, GM had claimed that SDI violated a previously signed contract by adding surcharges and raising prices on the steel it supplied to the car maker.
The suit developed as a result of the huge surge in world steel demand this year which led steel makers to raise prices and add surcharges to cover their rising raw material costs.
In the case, GM claimed that it bought about 20'000 tons of steel from SDI last year and expected to buy about 50'000 tons in 2004 at roughly $24 million. GM was hoping to win a judgement that would keep SDI obligated to the fixed prices specified in the contract and would force SDI to reimburse it for the price hikes the auto maker paid in the interim.
However, at a hearing in Michigan the Judge announced that Steel Dynamics had the right to dismiss the suit stating that there was no legally enforceable obligation on SDI's part to supply the 70'000 tons. A spokesman for GM announced that the company was reviewing the
opinion and has yet to make a decision on whether or not to pursue an appeal.
Thus as a result of the decision GM will not be refunded the surcharges it paid to SDI.
Several other similar disputes have arisen between steel producers and parts suppliers and appliance makers. For example, as SteelOrbis reported in March of this year, GM filed a similar but separate suit against Textron Fastening Systems Inc which has not yet been settled