Plastech Battle Cripples Chrysler's Canadian Factories
Right about now, U.S. Bankruptcy Judge Phillip Shefferly is deciding the fate of Chrysler Corp. If he rules that parts supplier Plastech must surrender its Chrysler-related tooling, Chrysler will live to die another day. If he rules that Plastech has the right to keep the machines, Chrysler will have to play ball with Plastech (indeed the judge may "force" both sides to play). And if Chrysler agrees to pay the supplier on a shorter term basis for its parts than the usual 90 to 120-day basis, and all the other parts makers want a piece of that action, Chrysler's cash pile will fail and it will still head for the buffers. Anyway, the star.com reports that the lack of plastic parts has cut output by about half at Chrysler's Brampton (300, Charger and Magnum) and Windsor (Dodge Caravan and Chrysler Town and Country) plants. "Ed Saenz, Chrysler's corporate communications manager, said the company will be able to operate the two plants on four-hour shifts until the end of the week before completely running out of parts." Just like a labor strike, every day this drags on, it costs Chrysler millions. It's highly unlikely they could last more than three weeks before filing.
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Interim deal reached, carpocalypse averted, For now.
This thing has been an amazing story. I am now lost to figure this stuff out. It's been over a decade since I did business in Detroit, and it has surely changed. How does a company like Plastech run on such thin margins that when a SINGLE one of their customers threatens to pull the plug they qualify for bankruptcy. I thought this meant they didn't have enough customers, but apparently they are doing fine selling parts to 3 other players? How do the owners live with this mentality? Why don't they diversify? Charge more? Sell? Seriously, I don't get it. Does the management just take every dollar at the end of each year and leave the company broke? More questions than answers to me. If more of the auto industry is working this way, then it is already dead and we are just waiting for it to fall over.
And I thought the end of the nasty cheap Chrysler interiors was here... now we have to continue to be insulted at the cheapness at every rental car counter...