Chrysler Still Intent on KO'ing Plastech Contract
Automotive News [AN, sub] reports that Chrysler is still pursuing Plan B, after a federal judge ruled that bankrupt parts supplier Plastech could hold onto the tools that make the 500 plastic parts that Chrysler needs to make cars. In other words, it continues to dangle replacement contracts in front of potential suppliers. According to AN, "late last week, Chrysler senior procurement manager Scott Roland convened about 40 supplier executives and Chrysler purchasing executives at the automaker's suburban Detroit technical center. Two people at the meeting said Roland told them to hold on because Chrysler wasn't done trying to get its tools back." Fair enough. Chrysler can't afford to pay through the nose for its plastic pieces OR face another parts embargo. But it looks like Chrysler jumped the gun before the Plastech ruling. AN also says "The suppliers at the meeting are makers of plastic components that last month received a letter of intent stating they would get the Chrysler trim business now held by Plastech." While I'm sure the letter was full of caveats, it's no wonder Roland's embarked on a little post-facto hand holding.
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I wouldn't want their business.
One of the reasons they are in bankruptcy b/c of doing business with Chrysler. But what do you do when that very low margin, cheap part business leaves as it just keeps your factory running at capacity (and just paying variable costs).