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Chrysler LLC temporarily halted production at four assembly plants in a dispute with an auto- parts supplier that threatens to shut the third-largest U.S. automaker's factory network.

Chrysler closed the plants today after following through Feb. 1 on a threat to revoke contracts with Plastech Engineered Products Inc., said Kevin Frazier, a spokesman for Chrysler. Plastech filed for Chapter 11 bankruptcy protection hours after Chrysler's cancellations.

``It's highly unusual,'' said James Gillette, a supplier analyst with CSM Worldwide Inc. of Northville, Michigan. ``It must have been a pretty serious situation to come to this.''

Chrysler's move may result in the closure of all 13 of its North American assembly plants unless the automaker finds a way to obtain Plastech parts on an interim basis, according to Chrysler documents filed in U.S. bankruptcy court two days ago.


More Here:
Bloomberg.com: Worldwide
 

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Up-Date

Chrysler sues to get tooling from bankrupt supplier

Without Plastech's tools, Chrysler said its production is at risk. This week alone, the situation stands to cost Chrysler $225 million, said Chrysler attorney Michael Hammer during a court hearing today.

But to give back those tools, Plastech says, would disrupt production for other customers and could throw the company's future into question.

"We will lose the business if they just come in and rip the tools out," said Gregg Galardi, an attorney for Plastech.

Chrysler had teams ready at Plastech plants to take back the tools Friday night, after winning a court order to do so. But the company had to stand down after the bankruptcy filing, which protects Plastech from litigation while it reorganizes.

Chrysler has asked for an exception to that rule.


Plastech's general counsel, Kelvin Scott, pointed out that the company continues to supply parts to its other customers, including General Motors Corp. and Ford Motor Co.

Plastech said Chrysler abruptly cancelled millions of dollars in business one day after Plastech had all but negotiated an agreement with customers, including Chrysler, to help keep Plastech afloat.

Twice in the last two years, Plastech's largest customers had made agreements to accelerate payments of about $86 million, and additional financial help.

In court papers, Plastech said Chrysler had sent letters in mid-January saying the supplier breached the contract between the two companies.

In court papers, Plastech said, on Thursday night a deal was nearly complete.

The following day, Chrysler hand-delivered a one-paragraph letter to Plastech CEO Julie Brown ending its business with the company and asking the company to make the tooling available, and then sought a court order for the machinery.

More Here: (Will Up-Date as info and future Court Hearings are held)
Chrysler sues to get tooling from bankrupt supplier
 

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The local shutdown is costly. The Toledo complex makes about 1,200 Liberty and Nitro vehicles a day and about 580 Wranglers. Inventories of the vehicles are shrinking.

A month ago, there were 72 days worth of Wranglers nationally, 57 days of Liberty, and 64 days of Nitro, according to Automotive News.

Plastech manufactures 70 to 80 parts for the Liberty and Nitro, and another two dozen for the Wrangler, Mr. Henneman said.

Chrysler, in a suit filed yesterday in U.S. Bankruptcy Court in Detroit, said it and other automakers have bailed out Plastech in recent months.

The Auburn Hills, Mich., car firm paid more than $10 million two weeks ago. It decided to cancel its contracts Friday but was unable to remove its equipment at Plastech sites because the Chapter 11 bankruptcy stopped such actions without a court hearing.

Article Link: (more here)
toledoblade.com -- Most work is stopped at Toledo Jeep Assembly, thousands are laid off
 

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Closing a single assembly plant for a week costs about $100 million, said John Henke, auto analyst and president of Planning Perspectives Inc. On Monday, Chrysler shut down the Sterling Heights plant, along with factories in Toledo, Belvidere, Ill, and Newark, Del. Henke said the Plastech dispute is a trial by fire for new Chrysler owners Cerberus Capital Management LP and John Campi, Chrysler's recently-appointed procurement chief. Campi, like Chrysler CEO Bob Nardelli, is a veteran of Home Depot Inc. and General Electric Co. Campi started his career with Southfield-based auto supplier Federal-Mogul Corp.

"This is a nice baptism into the automotive industry for John Campi," Henke said. "Supplier relationships here are very different than buying consumer goods for Home Depot mostly from China."

Henke said he's surprised Chrysler would cancel the Plastech contracts without ensuring the tooling would be returned or having an alternate supplier in place.

"This mistake is costing them tens of millions of dollars a day," he said. "This could be a little payback from Plastech."

LINK:Supplier dispute may shut Chrysler
 

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Plastech May Have Interim Deal With Chrysler

February 05, 2008: 10:38 AM EST
DETROIT -(Dow Jones)- An attorney for supplier Plastech Engineered Products Inc. said in court Tuesday that he believes the company has an interim production agreement with Chrysler LLC.
Chrysler has said it wants to remove machine tools used in Plastech plants to make parts for its vehicles.

Plastech said it needed more time for the transition.

During a hearing Monday in U.S. Bankruptcy Court in Detroit, Plastech attorney Gregg Galardi said "I believe we have an interim production agreement with Chrysler."

The agreement comes a day after U.S. Bankruptcy Court Judge Phillip Shefferly told both companies "to work something out." Shefferly declined Monday to order the companies into an interim production agreement.

He did grant Chrysler's request for an expedited hearing on its request that it be allowed to pull 4,000 pieces of Chrysler-owned machinery from Plastech plants. Arguments will take place on Feb. 13.

LINK:UPDATE: Atty: Plastech May Have Interim Deal With Chrysler
 

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Article published Wednesday, February 6, 2008
TEMPORARY SOLUTION

Jeep plant calls back thousands of workers
Deal with Plastech halts parts crunch

It was a temporary agreement reached yesterday between Chrysler LLC and a key supplier, but the shipment of interior vehicle parts meant thousands of laid-off workers at the Toledo Jeep Assembly complex have been called back to work.

Plastech Engineered Products Inc., of Dearborn, Mich., was to begin resupplying Toledo Jeep and other Chrysler plants, so the assembly plants were to be nearly in full production yesterday afternoon.

Toledo Jeep makes Jeep Liberty, Jeep Wrangler, and Dodge Nitro. The complex employs 4,000 Chrysler workers. Most were furloughed Monday.

Details of the agreement between Plastech and the automaker were not disclosed, but the agreement extends through Feb. 15. Chrysler last week canceled its contracts with the supplier and tried unsuccessfully to recover its tooling to move it to other suppliers.

Haig Stoddard, a senior auto industry analyst with Global Insights Automotive Group in suburban Detroit, said the temporary agreement likely won't settle much.

"In the interim, it allows them to keep production going in hopes that they'll come to a more permanent solution until they go to court on Feb. 13," he said.

"Chrysler was in a position that they had to do something. They had to get production going again or they would have been losing an awful lot of money," Mr. Stoddard said.

LINK: toledoblade.com -- Jeep plant calls back thousands of workers
 

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Chrysler CEO says it will replace Plastech as part supplier

Wednesday February 06, 2008, 5:25 PM
CHICAGO (AP) -- Chrysler LLC plans to end its relationship with parts supplier Plastech Engineered Products Inc., shifting the business to other companies because of a price dispute, Chrysler CEO Robert Nardelli said Wednesday.

Speaking to reporters at the Chicago Auto Show, Nardelli said a price increase sparked Chrysler's efforts last week to remove tooling it owns from Plastech factories. Plastech says the move forced it to file for Chapter 11 bankruptcy protection to stop Chrysler from taking the tooling.

Nardelli also indicated that Chrysler will move its business if suppliers raise prices too high.


LINK: Michigan Local & Small Business business – Economics & Finance business Articles - MLive.com
 

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Chrysler asks bankruptcy court for Plastech relief

DETROIT (Reuters) - Chrysler LLC asked a federal judge on Wednesday to let it take equipment and its business from bankrupt auto parts supplier Plastech Engineered Products Inc, saying bail-out options under discussion would have cost the money-losing automaker tens of millions of dollars.

Chrysler is seeking approval from U.S. Bankruptcy Court in Detroit to take tooling from Dearborn, Michigan-based Plastech and shift its business to other suppliers, a move that could cause the parts supplier to fail, Plastech's attorney said.



More @

Article Link:
Chrysler asks bankruptcy court for Plastech relief | Markets | Bonds News | Reuters
 

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Production Hauled Again!!!

5 Chrysler plants halt production
By RICK POPELY -- Chicago Tribune

(Updated Wednesday, February 13, 2008, 3:08 PM)


Thousands of workers at five of Chrysler LLC's assembly plants were idled indefinitely Monday after the automaker pulled contracts from a supplier that filed for bankruptcy, interrupting the flow of parts to the facilities.

Chrysler's nine other North American assembly plants also could shut down soon because Plastech Engineered Products Inc., which filed for bankruptcy Friday, produces about 500 parts for Chrysler vehicles and engines.

Chrysler said production wouldn't resume at the idled plants until it receives permission from U.S. bankruptcy court to move tooling for the moldings, interior trim, engine covers and other plastic components bought from Plastech to other suppliers.

"It's indefinite at this point," Chrysler spokeswoman Michele Tinson said as to when workers would be called back




LINK to Complete Article
FresnoBee.com: Autos

To me it looks like a power play by Chrysler to receive a favorable ruling by the Judge in this Case, maybe as soon as Friday.
 

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Plastech, Chrysler fight is complex

Plastech's quality was below the automaker's standards, said Douglas Doran, Chrysler's director of interior procurement, during testimony Wednesday.

Chrysler three times had to take the unusual step of bringing in a third party to review the parts Plastech made to ensure their quality, he said.





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Plastech, Chrysler fight is complex
 

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Chrysler exec: Moving tools would cost automaker 4-5 days of production

11:11 a.m., February 14, 2008

Four or five assembly plants would be idled within five hours of a shortage, he said. That would be followed by material shortages at 11 or 12 plants within 72 hours, with all plants affected within a week. Assembly lines would be idled, then workers would be laid off.

The “cascading effect” that would follow would shut stamping plants and halt shipments from other suppliers.

Under questioning from Plastech attorney Gregg Galardi, Schmidt said some vehicle production could continue if production were disrupted. He said vehicles could be assembled without some parts and wait on a factory lot until the parts are added.

But that could create quality problems: Vehicles could be damaged by parts being added out of sequence. Customers also would face delays in getting their vehicles as their the vehicles wait on lots to be completed.

U.S. Bankruptcy Judge Phillip Shefferly was expected to hear more evidence in the dispute today.


LINK:Chrysler exec: Moving tools would cost automaker 4-5 days of production - Crain's Detroit Business
 

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Judge to rule Tuesday on Chrysler-Plastech dispute

DETROIT, Feb 14 (Reuters) - A U.S. Bankruptcy Court judge said on Thursday he would be prepared to rule next week on a request from Chrysler LLC to seize tooling from bankrupt parts supplier Plastech Engineered Products Inc.

Judge Phillip Shefferly urged Chrysler and Plastech officials to reach some kind of interim agreement until he rules at 4 p.m. ET Tuesday on Chrysler's request. An interim production agreement between the companies expires on Friday.


LINK:
Judge to rule Tuesday on Chrysler-Plastech dispute | Deals | Private Equity | Reuters
 

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UPDATE 1-US judge denies Chrysler request in Plastech fight

DETROIT, Feb 19 (Reuters) - A U.S. bankruptcy court judge denied Chrysler LLC's request on Tuesday for permission to seize tools and move business away from bankrupt auto parts supplier Plastech Engineered Products Inc to other companies.

"I've determined to deny Chrysler's motion," Judge Phillip Shefferly said, adding that details of the ruling were contained in a written opinion also released on Tuesday.

A Chrysler spokesman had no immediate comment on whether the automaker would appeal the ruling.


LINK:
UPDATE 1-US judge denies Chrysler request in Plastech fight | Industries | Consumer Goods & Retail | Reuters
 

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Chrysler Appeals Court Ruling

March 3, 2008, 11:13AM


DETROIT — Chrysler LLC confirmed Monday it will appeal a federal bankruptcy court's ruling that it can't retrieve equipment from auto parts maker Plastech Engineered Products Inc., which filed for bankruptcy protection last month.

Chrysler has notified the U.S. Bankruptcy Court in Detroit that it will appeal. The appeal is expected within the next 30 days.


LINK:Chrysler Appeals Court Ruling | Chron.com - Houston Chronicle
 

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Plastech to Keep Making Chrysler Parts

March 4, 2008, 2:38PM


DETROIT — Plastech Engineered Products Inc. has agreed to keep making parts for Chrysler LLC as they haggle in court over whether the automaker can retrieve equipment it owns from the parts supplier.

Chrysler spokesman Kevin Frazier confirmed the agreement on Tuesday, but he would not say how long it will last or give any other details. A previous agreement that kept parts flowing expired on Monday.

Plastech General Counsel Kelvin Scott said the agreement is indefinite.

"Our intention is to continue to supply them parts for as long as they want us to," Scott said Tuesday. "We hope it's a long-term deal."

On Monday, Chrysler said it would appeal a federal bankruptcy judge's ruling that it can't get the equipment back from Plastech, which filed for bankruptcy protection last month.

LINK:http://www.chron.com/disp/story.mpl/ap/fn/5591419.html
 

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Chrysler says Plastech to make parts through April

Article published Saturday, April 5, 2008
Chrysler says Plastech to make parts through April


DETROIT - A Chrysler LLC spokesman said Plastech Engineered Products Inc. will continue making parts for the automaker at least through April 30.

Spokesman Kevin Frazier said yesterday that a fifth temporary supply agreement has reached. An earlier agreement expired yesterday.

Plastech filed for bankruptcy protection Feb. 1. It stopped shipping parts to Chrysler, including much of the Toledo Jeep Assembly complex.

The deal buys both sides more time as they haggle in court over whether Chrysler can retrieve equipment it owns from Plastech. Chrysler is appealing a federal bankruptcy judge's ruling that it can't get back the equipment.
toledoblade.com -- Chrysler says Plastech to make parts through April
 

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2008 Jeep Liberty Production

So. This would be the reason I haven't received my 08 Jeep Liberty with the Sky Slider roof I ordered 2/1/08? Reason not the roof like dealer is trying to tell me??

Thanks for any info on when production will resume and how far behind they are.

PBRIQ
 

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Ex-Chrysler supplier Plastech to sell off assets

Article published Monday, May 26, 2008

DETROIT — Auto parts supplier Plastech Engineered Products Inc. has received permission from a federal bankruptcy judge in Detroit to start an auction process June 16 to sell its assets.

Plastech lawyer Gregg Galardi told U.S. Bankruptcy Judge Phillip Shefferly on Friday that the Dearborn company expects to prepare bids during the next two weeks on the company’s interior and exterior component businesses.

Plastech makes door panels, consoles, bumpers, and other products, and it has two factories in Monroe and one each in Wauseon and Bryan. It filed for bankruptcy protection Feb. 1 after Chrysler LLC announced it was canceling its contracts because of a pricing dispute.


LINK:toledoblade.com -- Ex-Chrysler supplier Plastech to sell off assets
 

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Plastech edges closer to liquidation

June 17, 2008

Auto supplier Plastech Engineered Products Inc. moved closer to selling four of its businesses Monday after an auction to sell the Dearborn supplier's assets.

The auction is one of the final steps in liquidating Plastech, which has more than $1 billion in revenue. Plastech was pushed into Chapter 11 on Feb. 1 after nearly losing its contracts with Chrysler LLC.

Plastech's interiors unit, which represents the majority of the company's business, will go to a joint venture between Johnson Controls Inc., which is Plastech's largest customer, and a group of lenders.

The joint venture includes Plastech's customer contracts, labor agreements, an exterior-parts plant in Lansing and Plastech's stake in a separate joint venture.

The lender group, which is owed more than $260 million, plans to trade some of the debt for the business.

In the deal for the interiors business, lenders are trading $160 million in debt to buy the business. They plan a similar transaction, trading $24.6 million of the debt they are owed, in exchange for the exteriors business.

That deal ultimately would sell the business' customer contracts and machinery to Magna International Inc.'s Decoma unit.

Court documents indicate that Magna does not plan to buy Plastech's exteriors plants or retain the company's workforce.

Illinois-based JD Norman Industries Inc. plans to buy Plastech's stamping business for $4.5 million.

Plastech also accepted a bid from Bloomfield Hills-based BBi Enterprises Group, which makes interior and noise-deadening components, to buy machines Plastech had used to make automotive carpet. An attorney for BBi declined to disclose the price of that deal.

A hearing on the sales is scheduled for Wednesday in U.S. Bankruptcy Court in Detroit.

LINK:Plastech edges closer to liquidation | Freep.com | Detroit Free Press
 
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