AM General Faces Michigan Breach of Contract Suit over $3M in Unpaid Bills

March 12, 2018

A Michigan company is suing AM General, alleging the vehicle manufacturer owes more than $3 million for contract work at its northern Indiana plant.

Michigan-based Allied Industrial Group’s original contract called for $17.4 million in improvements at AM General’s commercial plant in Mishawaka, the South Bend Tribune reported. Allied Industrial retooled the plant’s assembly line in 2015 to ready it for production of the Mercedes Benz R-Class and Mobility Ventures MV-1 vehicle.

AIG’s federal lawsuit filed in Indiana alleges that AM General still owes $3.3 million.

James Groves, AIG’s attorney, said AM General didn’t give an explanation for the unpaid bills. Groves said he had no information suggesting that AM General is financially unable to pay.

AM General sold the plant last year to electric vehicle manufacturer SF Motors, a subsidiary of Chinese automotive manufacturer Chongqing Sokon Industry Group.

The lawsuit also alleges that AM General didn’t let AIG retrieve some materials, tools and equipment left on site after learning that the company planned to sell its plant. AM General eventually allowed AIG into the facility late last year, but AIG officials said they weren’t permitted to recover some of its materials valued at more than $1 million.

Jason Abel, an attorney representing AM General, said that the allegations “are baseless and without merit.” He said the company intends to fight AIG’s claims in court.

AM General is also the subject of another breach of contract lawsuit, which was filed in November by Michigan-based All State Fastener Corp. The lawsuit alleges that AM General owes All State Fastener more than $232,000 for failing to pay for fasteners purchased under a minimum purchase commitment between the two companies.

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