GM Asks Court for Permission to Remove Tools From Plastech
When Plastech hit the skids and began its tussle with Chrysler for the tools that make the plastic parts for the cars ChryCo can't sell to the general public, Ford and GM made all kinds of soothing noises about their Plastech parts supply. Reuters reports that The General filed papers in U.S. Bankruptcy Court yesterday (Tuesday) to recover its tools from the embattled supplier. Ignoring/cognizant of the fact that 29 of its plants have been idled by a strike at American Axle, GM claimed "Any other course would constitute reckless endangerment of GM's production lines and those that rely on them." Given that the judge has denied Chrysler access to its tools, GM's petition doesn't stand a hope in Hell of satisfaction. No comment so far from either the Court or Plastech, which is busy trying to raise $14m to maintain operations through April Fool's Day (I kid you not). Under a court-approved bankruptcy agreement that expires tomorrow (Thursday), Plastech may borrow up to $35.1m. Yes, well, Plastech been "unable to complete long-term debtor-in-possession financing." Meanwhile, back in February, Ford told Reuters their supply of Plastech parts was cool. We shall see…
line me up to lend. HAHA.
Tomorrow is Thursday, or did I lose another day. Question, if Plastech can't get get the money it need for operations through April then what they go into liquidation or something else. And if they do go into liquidation then what happens to the tools? They go back to Chrysler/GM/Ford or do they go on the auction block and they have to buy them back or lose them to the highest bidder(no clue who else would want those crappy plastic parts). Things have sure gotten interesting fast between this and the American Axle strike.
One of the many side effects of the outsourcing trend is that it puts companies at the mercy of supplier issues whether those issues be financial (Plastech) or labor (American Axle). With each additional outsourced critical component you add another business process point of failure. It takes a very, very savvy company to manage all of those relationships and the 2.8 have not demonstrated such savvy. Toyota & Honda, on the other hand, do a much better job of the complete supply chain risk:reward management job.