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Parts plant dispute snags minivan production


April 02, 2009

Chrysler resumed production at its minivan assembly plant in Windsor yesterday afternoon following a disruption in parts deliveries.

The conflict on Tuesday night originated at a parts plant in nearby Wallaceburg, where supplier H.E. Vannatter locked workers out in a labour dispute.

The lock-out halted production for several hours but Chrysler found a new source of critical die-cast aluminum engine and transmission brackets at its casting plant in Etobicoke.

The parts disruption affected minivan output during two shifts. The company also sent several thousand workers home.

Chrysler said if the company could not have resolved the conflict, it would have quickly halted production at other assembly plants across the continent.

LINK:TheStar.com | Business | Parts plant dispute snags minivan production
 

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Second Ontario Factory Stopped

April 2 -- Chrysler LLC, under a 30-day deadline from the U.S. government to restructure, stopped production at a second Ontario factory because of a dispute with an auto parts supplier.

The Brampton, Ontario, plant makes the Chrysler 300, Dodge Challenger and Charger, said Max Gates, a Chrysler spokesman, in an interview today. Chrysler idled its minivan plant in Windsor yesterday because of the parts shortage caused by the dispute.

The parts shortage could ripple through many of the Auburn Hills, Michigan-based company’s factories unless it’s resolved, Gates said. He declined to identify the supplier or describe the nature of the dispute.

LINK:Chrysler?s Dispute With Supplier Closes Second Ontario Plant - Bloomberg.com
 

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UPDATE: Chrysler Pulling Equipment

UPDATE: Chrysler Pulling Equipment From Supplier; Idles 2nd Plant

April 02, 2009: 05:58 PM ET


DETROIT Chrysler LLC is in the midst of pulling its equipment from a Canadian parts maker after the auto maker was forced to idle a second assembly plant Thursday due over a shipment problem.

The auto maker won approval from the Superior Court in Ontario to begin removing its equipment from an engine and transmission bracket making plant owned by Trans Cast Precision Inc.

Chrysler idled its Brampton, Ont., assembly plant Thursday due to the bracket shortage, Chrysler spokesman Dave Elshoff said. The factory assembles Dodge Challengers and Chargers. A day earlier, Chrysler temporarily stopped production at its Windsor minivan assembly plant and warned other North American factories could be impacted.


The problem centers on a payment dispute between Trans Cast and Chrysler in which Trans Cast claims it is owed money, according to union officials who asked not to be identified because they don't speak for the companies. Trans Cast also attempted to initiate a price increase, these people said.

Chrysler now plans to move production to a company-owned casting plant in Etobicoke, Ont. Auto makers traditionally own the equipment auto suppliers use in their plants to make their exclusive parts.

This is the second time in the past 14 months that a dispute has led Chrysler to pull its work and tooling from a supplier. Last year, Chrysler ended all ties with Plastech Engineered Products Inc. in Dearborn, Mich., after the company attempted to raise prices. The decision helped push Plastech into bankruptcy.

LINK:UPDATE: Chrysler Pulling Equipment From Supplier; Idles 2nd Plant
 

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Canadian court orders equipment back to Chrysler, GM

Canadian court orders equipment back to Chrysler, GM

Posted Friday, Apr 3, 2009, 10:48 am in Company News

The Detroit News reported this morning that Chrysler LLC and General Motors Corp. received court orders yesterday to remove their equipment from a Canadian parts supplier. The supplier relocated Chrysler’s tooling, which forced the shutdown of two Chrysler plants in Canada.

Chrysler stopped production of Chrysler 300, Dodge Charger and Challenger sedans at the Brampton Assembly Plant on Thursday. Minivan production at the Windsor Assembly Plant has been down since Thursday due to a shortage of brackets.

No GM assembly plants are expected to be disrupted, GM spokesman Dan Flores told The News.

The Ontario Superior Court of Justice issued the court orders, which allow both companies to reclaim their equipment and machinery, according to The News. The tooling would be moved to Chrysler’s casting plant in Etobicoke, Ontario.
 

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Chrysler to reopen Windsor plant after parts dispute

Chrysler to reopen Windsor plant after parts dispute
Mon Apr 6, 2009 1:07pm EDT

TORONTO, Chrysler Canada's minivan assembly plant in Windsor, Ontario, which employs about 4,900 people, will reopen at midnight after a parts shortage forced its closure on April 1, the company said on Monday.

On April 2, the company idled a second plant, in Brampton, Ontario, sidelining about 3,100 workers, due to the same issue.

"We are waiting to confirm with Brampton, but Windsor is confirmed," said Chrysler spokeswoman Mary Gauthier. "They are going back starting with the midnight shift tonight."

The parts disruption came after dispute between Chrysler and Transcast Precision Inc, which supplies die-cast aluminum brackets for engines and transmissions.

Chrysler said it wanted to remove its tooling and parts from a Transcast plant in Wallaceburg, Ontario, and move it to the Chrysler plant on the westside of Toronto.

Chrysler said on Friday it had been "taken by surprise" when it found its tooling and parts were no longer at the supplier's plant.

Transcast said in an Ontario court that it had moved parts and Chrysler's tools to at least six different locations in Ontario.

Gauthier said on Monday Chrysler had located almost all its parts.

The Brampton plant makes Dodge Challengers and Chargers, as well as the company's 300 series.
LINK:UPDATE 1-Chrysler to reopen Windsor plant after parts dispute | Industries | Consumer Goods & Retail | Reuters
 

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News: Canada

Supplier: Chrysler reneged

Automaker disputes claim



7th April 2009, 4:45am


A supplier involved in a dispute with Chrysler Canada says the troubled automaker spent millions of taxpayer dollars to avoid paying an extra $150,000 to the parts maker, an allegation which Chrysler called "outrageous."

Dean Topolinski, president and director of Transcast Precision, said yesterday that his company was simply trying to cover its transition costs when it asked Chrysler to pay 2.5 times more than it had originally agreed to pay for five days worth of inventory.

He said this would have cost Chrysler approximately $150,000 extra, but instead the automaker refused and spent an estimated $5 million to $10 million shutting down plants in Windsor and Brampton, taking the matter to court and moving production of the parts to its Toronto facility, where workers are paid more than three times as much as Transcast staff.

"They spent millions of dollars this past week that were completely wasted and there was absolutely no need for it," Topolinski said.

He said that those "ended up being taxpayer dollars" because Ottawa and Ontario provided $250 million last week so Chrysler could meet its payroll and other immediate obligations while it negotiates a larger bailout package from Canadian and American governments.

But Chrysler's side of the story was quite different.

The company said it had no responsibility for Transcast's transition costs and had the taxpayer in mind when it decided not to pay the extra money demanded. Chrysler said when it went to retrieve the tooling equipment -- which it owns -- from Transcast's plant, it had been moved to several different locations.

"We find these statements to be absolutely outrageous" Chrysler Canada spokesman Mary Gauthier said last night.

On March 31, Chrysler was forced to shut its minivan plant in Windsor due to a shortage of die-cast aluminum engine and transmission mounts, and by Thursday production was halted at its car plant in Brampton as well.

Production was expected to resume at both plants today.

LINK:Supplier: Chrysler reneged | Canada | News | Toronto Sun
 

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Chrysler and its Missing Die Cast Aluminum Parts

Chrysler and its Missing Die Cast Aluminum Parts

April 7th, 2009

Many automotive suppliers consider a parts delivery failure that results in an OEM (Original Equipment Manufacturer) line shutdown as the most serious offense imaginable. Some may argue the most serious offense involves shipping parts at unprofitable price levels but nonetheless, in better times, a line shutdown represents the worst case scenario. And according to this article from Reuters, a Chrysler supplier, Transcast Precision Inc who makes aluminum die cast parts (specifically brackets for engines and transmissions) shut down the auto-maker’s line due to part shortages. We realize it seems crazy right now that any supplier can not meet a production schedule for an automotive OEM, but alas, this case involves, surprise surprise, a dispute between the two parties.

Specifically, the supplier, Transcast Precision Inc who had purchased the assets of the now defunct Vannatter Group, asked for a 2.5x price increase along with a request that Chrysler purchase all current finished goods inventory. Besides a refusal, Chrysler asked the supplier to move both the tooling and parts to its own plants. When Chrysler went to collect both, it said it was “taken by surprise” to learn both had been moved and were no longer at Transcast Precision’s plant. Apparently the parts were moved to six other locations.

No big deal, some might say but actually as custodian of an OEM’s tooling (most automotive tooling is owned by the OEM), any supplier changes to a part must be documented in a PPAP process. The courts agreed with Chrysler and forced Transcast to ship the parts as well as hand over tooling to Chrysler. Both parties will be back in court to resolve issues around pricing and supply for future orders.

This story reminds me of one a friend told me back in 2004 when he encouraged a Tier 1 automotive parts supplier to either fire GM or get a price increase (GM agreed to pay more for the parts). “These suppliers aren’t not-for-profits,” he told me. Perhaps the difference in result however between the two cases, involved the negotiation approach. The problem with the reliance on the courts is that ultimately, blanket purchase orders with no volume commitments aren’t worth the paper they are written on. But now that GM and Chrysler face desperate economic times, they’ll take these cases to the brink. After all, there is not much to lose.

LINK: Chrysler and its Missing Die Cast Aluminum Parts
 

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Windsor, Brampton plants reopen

Windsor, Brampton plants reopen

Posted Tuesday, Apr 7, 2009, 2:12 pm in Company News

The Windsor Assembly Plant and Brampton Assembly Plant in Ontario both reopened this morning after a parts shortage forced their closure last week.

The Windsor plant, which employs about 4,900 people, had been closed since April 1, and the Brampton plant, which employs 3,100, since April 2. The plants were closed after a parts supplier, Transcast Precision Inc., refused to deliver parts to the plants and then hid Chrysler LLC’s tooling when the company sought to move it to its Etobicoke (Toronto) Casting Plant.

Transcast Precision built die-cast aluminum brackets for engines and transmissions used on minivans (Windsor) and large, rear-wheel-drive vehicles (Brampton). An Ontario court ordered Transcast to deliver parts to Chrysler that it had already built and to immediately return the tooling to Chrysler.
 

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Judge sets price for Chrysler Canada parts
Wed Apr 8, 2009 2:43pm EDT

OTTAWA,

Auto parts manufacturer Transcast Precision Inc said on Wednesday that a Ontario Superior Court judge has ruled Chrysler Canada [CBS.UL] must pay it a premium for inventory that Transcast said it acquired in its takeover of Vannatter Group Inc.

The dispute over prices for the Transcast parts, which are brackets, has already forced Chrysler to close its two Ontario assembly plants: Windsor, which assembles minivans, and Brampton, which makes sedans, for several days due to lack of parts.

The plants reopened earlier this week after a judge ordered Transcast to release two weeks' of shipments to Chrysler.

Transcast said the judge ruled late on Tuesday that Chrysler must pay 1.75 times the original price for parts made by Vannatter. That overrules an earlier court decision that Chrysler pay the original price.

"This is an interim order, this whole area is going to be argued over the next couple of weeks and there will be a final order issued later," said Transcast President Dean Topolinski.

Chrysler had no comment.

A dispute arose after Transcast acquired Vannatter assets, including a Wallaceburg, Ontario, plant that made die-cast aluminum brackets for Chrysler.

Transcast then asked Chrysler to pay 2.5 times the original price for the parts, saying it had to cover transitional costs. Chrysler declined and during the parts shortage that followed, Chrysler temporarily closed its two Ontario plants.

Chrysler tried to remove its tooling and parts from Transcast's plant and take them to one of its own plants in Toronto, so that it could make the brackets itself.

Chrysler found the tooling and parts were no longer at the supplier's plant, but later was able to locate almost all the equipment. Chrysler said it will take it about two weeks before it can start producing the parts itself.

LINK:Judge sets price for Chrysler Canada parts | ETFs | News | Reuters
 
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