By on June 30, 2008

imgbuildings2.jpgIn 2001, GM named Progressive Progressive Molded Products supplier of the year. Boston investment firm Thomas H. Lee Partners bought Progressive in 2004. With '07 revenues cresting $1.4b in 2007, the company's been a major GM supplier (TTAC is still investigating which parts they make for which GM vehicles). Yes, well, like so many other suppliers, Progressive got stuck between rising raw material costs and declining prices. Progressive filed for Chapter 11 on June 20, listing $500m in debt vs. $50m worth of assets. And now, as the court prepares to liquidate the supplier, GM has asked for court approval to seize tools from Progressive. Reuters reports says GM's filing cites "potential supply disruptions" that could "force the carmaker to shut its assembly lines." "The tooling is essential to ensuring the production of the component parts GM's assembly lines depend on," GM said in court papers, describing the company as a "single-source" supplier. You may recall that a federal bankruptcy judge withheld supplier Plastech's tooling from Chrysler, which forced ChryCo to temporarily suspend production. That's all GM needs right now. Or, strangely, maybe it is. 

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9 Comments on “Plastech Redux: GM Wants C11 Supplier’s Tooling– Or Another Shutdown...”

  • avatar

    Anyone who has dealt with GM knows that the suppliers are dirt under the feet of the purchasing guys. The short sighted loons that run purchasing will screw anyone for a nickel less in cost. Their reputation is known in the supplier business and many won’t do business with GM without guarantees of payment. This reputation means that GM must source with whoever will take their business.
    As to single sourcing, you have to wonder what brain dead MBA came up with that one. Single source and your welfare is tied to the welfare of your source.
    In the old days you had several sources ( two at least ) so if one crashed you simply put an extra shift on at one of the other sources, simple.

  • avatar

    Maybe this one did not do all its hiring at the CEO’s family reunion. GM might have a chance.

  • avatar

    Aren’t they GM’s tools anyway?

    I know that at our company, the automakers pay for the tools, and they belong to them. The idea specifically being that if they ever want to, they can get THEIR tools immediately and keep production going.

    Maybe bankruptcy changes things?

  • avatar

    I was thinking the same thing as Jerome…when I was working in the CE industry, all of our dies and molds for radios and the like were company owned, and loaned to the factory that was producing them at the time in China. When that factory closed or got contracted to a different line, those company owned pieces were escorted to the new manufacturer.

    Seems odd to me that GM would not own their tools…

  • avatar
    Alex Rodriguez

    GM will be the bad buy and Progressive is the good guy, even when evidence comes out that Progressive was helping Al-Qeida and using Infant Labor and paying $0.37 cents an hour.

    Didn’t you just watch the Chrysler-Plastech saga play out? Chrysler bad. Plastech Good – then bad – but still Chrysler bad.

  • avatar

    RF – do you know how the supplier situation has been for the trasnplants, are they getting stuck between rising raw material costs and declining prices to the point that they are being forced out of business. Or is this only related to the beat the suppliers down to within and inch of death domestics. Toyota and Honda look like they have a symbiotic relationship with their suppliers and look like they would be doing what they could to keep them healthy and profitable.

  • avatar

    “Didn’t you just watch the Chrysler-Plastech saga play out? Chrysler bad. Plastech Good – then bad – but still Chrysler bad.”

    LOL. Alex very funny. TTAC very funny. Both good.

  • avatar

    If a supplier is in Ch.11 the courts won’t let any contracts they have with an OEM to be re-bid or re-sourced. Effectively, those contracts are now written in stone, unless they are not in the supplier’s best interest (money-losers) in which case they can be renegotiated.

    Same goes with tooling. If the tooling were to be moved the supplier would lose a revenue stream – must be negotiated through with the bankrupcy judge before you move it.

    Oddly enough, if the company was doing OK they’d help you move the tools out. This is why it’s key that the OEM’s and the suppliers work together to make sure they both survive. Too bad only the Asian OEM’s understand this.

  • avatar

    They for sure make bezels for the DIC switches in the lucerne/lacrosse for Oshawa. Sad to see people lose their jobs, but they were a TERRIBLE company to have to work with.

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