ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Tuesday, December 3, 1996              TAG: 9612030082
SECTION: BUSINESS                 PAGE: B-5  EDITION: METRO 
DATELINE: FRANKFURT
SOURCE: Associated Press

VW STOCK CONTINUES TO PLUMMET

Volkswagen stock fell nearly 5 percent Monday on fears that the German automaker may be forced to pay billions of dollars to General Motors Corp. for alleged industrial espionage.

Analysts said share prices may continue to drop as long as the threat of damages remain, with the market speculating that damages could range from several hundred million dollars to as much as $5 billion.

So far, the falling share prices have accounted for about $4.5 billion worth of Volkswagen's value, said Brian Wilkinson, German stock analyst at HSBC James Capel in London.

``The market doesn't take any chances - and may not rest easy until that full amount'' is accounted for in the share price, Wilkinson said.

VW shares ended floor trading in Frankfurt on Monday down 29.50 marks ($19.67), or 4.8 percent, at 587.00 marks ($391).

The first real indication of what GM wants in the way of damages may come today, when both sides return to court in Detroit to discuss how the trial will proceed and whether an out-of-court settlement is likely.

The shares of Germany's largest automaker slid 6 percent last week after GM won an important ruling in a United States federal court saying the U.S.'s largest automaker could use racketeering laws to pursue its case, which automatically would triple any damages.

Volkswagen shares recovered slightly on Friday after the resignation of executive Jose Ignacio Lopez, accused by GM of stealing secret files when he defected to Volkswagen in 1993.

Many thought the resignation, one of GM's conditions for seeking a settlement, might bring about a resolution.

But GM said Sunday that chances for an agreement had worsened since Lopez's resignation, citing statements by VW board members denying wrongdoing and saying that GM had no evidence to back up its allegations.

VW board member Klaus Liesen countered by saying the German automaker would enter settlement negotiations only if no conditions were set ahead of time.

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