Chrysler shuts 4 plants on supplier dispute (Illinois, Delaware, Michigan and Ohio)

[UpInArms]

Source: Reuters

DETROIT, Feb 4 (Reuters) - Chrysler LLC said on Monday it has closed four of its U.S. assembly plants due to a dispute with supplier Plastech Engineered Products Inc, which filed for bankruptcy court protection.

The U.S. automaker, which terminated all its contracts with Plastech on Friday due to the supplier's "ongoing financial struggles," said the plants are in Rockford, Illinois; Newark, Delaware; Sterling Heights, Michigan; and Toledo, Ohio.

Chrysler previously said in court documents filed with the U.S. Bankruptcy Court in the Eastern District of Michigan that it might be forced to quickly close its 12 assembly plants around the world because the supplier is no longer shipping parts to the Chrysler plants.

Read more: http://www.reuters.com/article/bondsNews/idUSN0456902520080204

[kirby]

1. Supplier dispute?

I thought the issue was that Plastech filed for bankruptcy not a 'dispute'.

[kelligesq]

2. question is will the CORPORATION keep American plants closed n put those people out of work? using

this as an excuse to close the plants permanently

[Oregone]

3. Too bad were too weak to do something about it.

I saw this last night. I was amazed at these people's spirit:
http://www.imdb.com/title/tt0426596/

[notadmblnd]

4. let me get this straight.. Chrysler cancels contract

forces company to file bankruptcy, chrysler whines about not getting theparts they cancelled their order for? Makes perfect sense to me:shrug:

[durtee librul]

5. Chrysler owns the tooling used to make these parts

and was trying to get it back when Plastch shut the doors. Plastech HAS no intention of resuming production. Ford F150 and the GM Enclave/Arcadia will also be affected as well.

[ConcernedCanuk]

6. umm - it's "Plastech" -- I don't see anything that says they closed their door. On the contrary . .

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Ford says not affected by Plastech bankruptcy filing

Ford Motor Co (F.N: Quote, Profile, Research) is still receiving parts from Plastech Engineered Products Inc, which has filed for bankruptcy court protection, a Ford spokesman said on Monday.

"We're working with Plastech to make sure that we have continuity of parts and components to keep our factories operating," Ford spokesman Todd Nissen said. "We've not had any production disruptions and don't expect any."

/snip/

Article goes on to say that Ford is it's largest customer - so if FORD had canceled orders, it could be a bigger blow to Plastech than Chrysler's cancellation.

[durtee librul]

9. Plastech is a crappy supplier with crappy quality and has been

for years to ALL OEM's. Period. They told ALL the big 3 (and also some of the so called imports) they needed lots of dollars to stay open and Chrysler bailed them out to the tune of $45M over the past year. Ford and GM also paid big $$ to keep their doors open.

Sorry, we don't need another Bush style run company to keep bailing out just so they can stay in business.

Chrysler gave them more than enough chances to clean up their act and they didn't. Several quality and financial teams were sent into Plastech the last year to help them get back on track.

After a while, you just give up.

So, forgive me for my missed 'e' in Plastech. I am not perfect as you must be.

Oh and just in case you care (which I know you don't by your tone), I have worked for supplier quality for over 40 years at all of the Big 3 so I know what I am talking about....unlike some others here on this thread who just spout off to be spouting off after reading some stupid non-union newspaper account.

[treestar]

7. Looks good for the competition

I'd be mosying over there for a job about now.

Or trying to start up a new plant. Looks like Chrysler has finally become a dinosaur.

We don't HAVE to have this particular company. Others can make cars. We can make cars. Enough of their games. We aren't dependent on them.

[ohio2007]

8. SUppliers filed for Chapter 11. they went bankrupt. nt

[ConcernedCanuk]

11. Chapter 11 is reorganizing or selling. - - Chapter 7 is closed for business and liquidation/

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"When a troubled business is unable to service its debt or pay its creditors, it or its creditors can file with a federal bankruptcy court for protection under either chapter 7 or chapter 11.

In chapter 7, the business ceases operations and a trustee sells all of its assets and distributes the proceeds to its creditors. This is done in accordance with statutory defined priorities.

A chapter 11 filing, on the other hand, is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations.

http://en.wikipedia.org/wiki/Chapter_11

And as well as Ford, which appears to be their largest customer - Toyota is reporting continued supplies from Plastech

"DETROIT, Feb 4 (Reuters) - Toyota Motor Corp (7203.T: Quote, Profile, Research) continues to receive parts from Plastech Engineered Products Inc, which has filed for bankruptcy court protection, a spokesman said on Monday.

"We have had no interruption in supplies," Mike Goss said. "Plastech has told us that they will continue production and we will monitor the situation closely."

Chrysler LLC has closed four of its U.S. plants due to a dispute with Plastech.

/end/

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN0458262420080204

I find it interesting the way that is worded:

Chrysler LLC has closed four of its U.S. plants due to a dispute with Plastech

A large corporation doesn't close that many plants because of just one supplier dispute - I think Chrysler wanted to close those plants for a different reason; or reasons, and this way they get to ignore the unions concern/power.

OH, and GM is still getting parts also - -

"DETROIT, Feb 4 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) is still receiving parts from Plastech Engineered Products Inc, which has filed for bankruptcy court protection, a GM spokesman said on Monday.

"We are still getting parts from Plastech and production has not been impacted," Frank Sopata told Reuters.

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN0456923320080204

[ingac70]

10. This kinda stuff is exactly why Henry Ford...

Had his own parts built by Ford workers and not other companies. GM and Chrysler followed suit. In the last decade, their parts divisions have been spun off and sold, or closed completely to farm out the work to other companies.

That common sense that the former "Big 3" lost is coming back to bite them in the ass in a big way.