Another Dispute Over Plastech Toolings
The custody battle over Plastech's injection mold tooling just got a lot more complicated. Mlive.com reports that H.S. Die, the company who manufactured Plastech's Chrysler-specific parts tooling, says that it holds a special-tool lien. In theory, the agreement gives them legal priority to reclaim the equipment now that Plastech has entered bankruptcy. (Chrysler is appealing the decision barring the automaker from reclaiming the same tooling.) H.S. Die was surprised to find itself on top of the "unsecured creditors" list; Plastech owes it $9m. H.S. Die has filed a legal notice, arguing its legal right to the equipment– registered with the state of Michigan– as unpaid-for merchandise. If the court rejects the die maker's arguments under this under-interpreted lien jurisprudence, H.S. Die stands to lose millions. If, on the other hand, the tooling is handed back to H.S. Die, Chrysler could find itself in the awkward position of having to work-out a deal with yet another supplier to keep production lines moving. The saga continues…
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I'm guessing that Plastech used the same asset to secure two lines of credit.. one with H.S. Die and other with Chrysler. I'd bet that Chrysler accepted the dies as collateral without checking to see if they had already been pledged to another party. I mean how you you really know? It is not like you can do a title search on tools. You have to take Plastech's word for it. If they lie, then you get to sue them. Sounds like Plastech has some 'splaining to do.
The snake dies from the head down. In this case the snake is Chrysler's entire supply chain. I don't see any viable scenario under which Cerberus pulls off the Chrysler turn around.
Is the Detroit Mayor's office running Chrysler now and someone forgot to tell us?
Isn't chrysler better off if HSD gets the tools? Methinks Chrysler doth protest too much. The legal bill for a continued fight with Plastech could likely cost them more than buying the tools from HSD again.