Plastech Chapt. 11 Shuts Four Chrysler Plants; Supplier Revolt to Follow?
Not to be alarmist (much), but TTAC has been saying for some time that the collapse of Detroit's domestic supply chain could force one or more of the automakers into bankruptcy. On Friday, Chrysler canceled its contract with Plastech Engineered Products (PEP) of Auburn Hills, MI. Plastech immediately filed for bankruptcy and stopped shipping parts to Chrysler. USA Today reports that a lack of plastic parts has forced the American 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). While Chrysler should be able to reestablish parts production (e.g. engine covers, grill panels, moldings, metal stampings, door panels, floor consoles), we hear that Chrysler's been slow paying all its suppliers. If suppliers see this move as a sign of things to come, they might reach the point where they demand cash up front– tipping Chrysler into bankruptcy. Watch this space.
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