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Automodular reaches C$7M settlement in dispute with General Motors

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Automodular reaches C$7M settlement in dispute with General Motors

Canada-based Automodular Corp. said Feb. 20 that it reached a C$7 million settlement with U.S. automotive company General Motors Co. and its General Motors of Canada Ltd. unit over an allegedly wrongful termination of a sequencing and sub-assembly services contract.

Automodular no longer has active operations but was previously engaged in sequencing and sub-assembly of modules for installation in final equipment, which were assembled by Ford Motor Co. in Ontario.

The legal claim filed by Automodular in 2011 relates to a contract it signed with General Motors for the sequencing and sub-assembly of components for the Chevrolet Camaro. General Motors terminated the contract, effective Sept. 20, 2010, and entered into a new agreement with Inteva Products LLC and Inteva Products Canada ULC for the same work Automodular was doing under the terminated contract. Automodular alleged that the contract termination was "wrongful" and claimed C$20 million against General Motors and Inteva and sought punitive damages for C$5 million. In 2015, the company agreed to dismiss its claim against Inteva.

Pursuant to the Feb. 20 settlement, Automodular plans to dismiss the litigation with prejudice and without costs upon receipt of the payment, which it expects by March 6.