Comments on: Plastech Chapt. 11 Shuts Four Chrysler Plants; Supplier Revolt to Follow?

By: Landcrusher

Landcrusher — Mon, 04 Feb 2008 21:57:24 +0000

Okay, here is another crazy theory.

The leaders of these supply companies should have been looking for other sources of income for a long time now. That way, they could have been able to force better terms on their customers.

They have obviously not done this. Why were their leaders not more diligent in their duties?

Simple, they were “made”. They did not fear because they have so much personal cash, and carefully constructed employment contracts, that they just did not care. Perhaps they looked at all the hardwork involved in diversifying their companies, and instead decided it was best to just keep their options open, or be ready to retire early. Seems to me that the lack of loyalty to the company has come full circle. Nowadays, NO ONE has any loyalty to a company. Not the guys on top or bottom.

Given the lack of loyalty, I would think that the stockholders and creditors will need too start figuring out a way to make the top dogs more “bought in”, or they will continue to take hits from these sorts of failures.

I worked for a company that made sure that someone at the top was personally liable in the event that a client company went bankrupt or failed to pay our fees. It worked to. Wave of the future?

By: NickR

NickR — Mon, 04 Feb 2008 20:54:10 +0000

Sterling Heights, Mich. (Sebring and Avenger); Newark, Del. (Durango and Aspen); Toledo, Ohio (Nitro and Liberty); and Belvidere, Ill. (Caliber, Compass, Patriot).

…thereby allowing Chrysler to reduce inventories of a rogues gallery of ‘hasbeen’ and ‘neverwas’ models.

By: Captain Tungsten (of GM)

Captain Tungsten (of GM) — Mon, 04 Feb 2008 20:42:31 +0000

Don’t feel TOO bad for Plastech…. The best suppliers have been rapidly diversifying their customer base. There is quite a lot of non-Big 2.8 production in North America these days, and contrary to popular belief, you don’t have to be part of the keiretsu to get in on the business. All the non-US based manufacturers place lots of business to suppliers with plants and engineering centers in the U.S. (though the HQs may be elsewhere). Given the rapidly dwindling leverage of Big 2.8 purchasing departments, their tactics are getting more and more extreme, and less and less effective. But any supplier with a clue has been busy wooing some new OEMs, and those OEM’s are open to the discussions.

By: fallout11

fallout11 — Mon, 04 Feb 2008 20:26:46 +0000

Radimus has the gist of this, it’s part of Cerberus’s overall plan (notice that they cancelled the contract FIRST, even before securing a replacement). Cerberus’s remains a venture (vulture) capital firm, first and foremost. Bankruptcy is most assuredly in the cards.

By: guyincognito

guyincognito — Mon, 04 Feb 2008 17:37:00 +0000

“a lack of plastic parts has forced automaker to suspend operations at four U.S. assembly plants: Sterling Heights, Mich. (Sebring and Avenger); Newark, Del. (Durango and Aspen); Toledo, Ohio (Nitro and Liberty); and Belvidere, Ill. (Caliber, Compass, Patriot).”

I guess the real question is, will any potential notice or care if there is a prolonged production gap for any of these vehicles.

By: crackers

crackers — Mon, 04 Feb 2008 17:10:54 +0000

KixStart might be on to something. Could this be a calculated move to Chinese suppliers? That way Chrysler could improve their interiors with no cost increase.

By: KixStart

KixStart — Mon, 04 Feb 2008 16:50:31 +0000

When they’re ready to resume, Plastech’s Chapter 11 problems will probably prevent them from ramping up new parts right away and, surprise, parts will immediately begin to roll in from China (almost like they had the drawings a month ago).

By: Redbarchetta

Redbarchetta — Mon, 04 Feb 2008 16:43:02 +0000

Looks like beating down their suppliers to within and inch of bankruptcy and super cheapening their interiors to maximize profits are coming back to bite them in the ass. It’s unfortunate that the suppier is the one paying for Detiots bad deads, for now.

By: radimus

radimus — Mon, 04 Feb 2008 16:39:50 +0000

None of those vehicles were selling anyway. Sounds like Cereberus found a way to stick it to a supplier and clear the decks of some excess inventory all at once.

By: Frantz

Frantz — Mon, 04 Feb 2008 16:28:08 +0000

Even though chrysler choose to use the horrible interiors… perhaps this is a very clear sign they are fixing the biggest problem with their line (other than the lack of a sub-compact). Weren’t there rummors of a mid year fix? please let this be it!

By: jazbo123

jazbo123 — Mon, 04 Feb 2008 16:23:30 +0000

“And if Plastech was responsible for any of the atrocious interiors that have (dis)graced Chryslers over the past 5 or so years, then good riddance”

The OEM is 100% responsible for their end products. Everything has to be reviewed, approved, and validated under APQP and PPAP processes.

From the AIAG manual (which Chrysler is a part of)

“4.6.7 Appearance Approval Report
4.6.7.1 An Appearance Approval Report shall be provided for any parts
with color, grain, or surface appearance requirements.
4.6.7.2 Approvals shall be documented on the AIAG PPAP current edition
Appearance Approval Report form.
4.6.7.3 Suppliers shall coordinate all pre-grain, post-grain, and color
approvals through the Metrology Department.
4.6.7.4 The Metrology Department will coordinate approvals with
the program assigned customer applications Product Quality
Engineer and [OEM] final customer.

By: starlightmica (Richard Chen)

starlightmica (Richard Chen) — Mon, 04 Feb 2008 16:18:47 +0000

From Crain’s Detroit Business last week:

A proposed $200 million bailout to stabilize the Dearborn-based maker of interior trim, wiring harnesses and cockpit modules is uncertain because “there is a lot of buck passing” among the four parties tapped for help, says a source who is taking part in the negotiations.

The four parties — General Motors Corp., Ford Motor Co., Chrysler LLC and Tier 1 supplier Johnson Controls Inc. — are still smarting from their unsuccessful $46 million bailout of Plastech in early 2007.

The latest Plastech crisis comes at a difficult time for automakers. Each has a group of struggling suppliers, and more supplier failures are expected if North American light-vehicle production falls to the range of 14.3 million units, as some analysts predict.

By: thetopdog

thetopdog — Mon, 04 Feb 2008 16:13:05 +0000

I don’t know what’s worse, the fact that Chrysler had to shut down its plants or the fact that between the Sebring, Avenger, Nitro, Liberty, Caliber, Compass, Patriot, Durango and Aspen there isn’t even one competitive car on that list.

And if Plastech was responsible for any of the atrocious interiors that have (dis)graced Chryslers over the past 5 or so years, then good riddance