Plastech Taps Customers for Loans
Plastech is working on bankruptcy financing to keep the company afloat through the summer. However, instead of going to traditional lenders, they're going hat-in-hand to their customers for an $80m line of credit. The Detroit Free Press reports Johnson Controls, Inc. (JCI), GM, FoMoCo and Chrysler are expected to share the pain to ensure a steady flow of plastic parts to their assembly plants through the summer. Experts say the loans are a smart move, as the cost of the loan would be less than the cost of stopping an assembly line due to a parts shortage. At the same time, some of Plastech's other lenders are talking with JCI about the possibility of them buying Plastech's interior component operations. Plastech is preparing its customers for the possibility they could go out of business by building a bank of parts. Watch this space as the continuing soap opera unfolds.
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