Dana Wants Out Of Chrysler

Edward Niedermeyer
by Edward Niedermeyer
dana wants out of chrysler

After 70 years of doing business together, Chrysler and driveline supplier Dana appear headed for a nasty breakup. Automotive News [sub] reports that Dana has asked a U.S. Bankruptcy Court in New York to allow it to end its business with Chrysler by the end of this year. Dana, which recently emerged from a two-year bankruptcy, is not divulging the exact causes for the rift. Increasing material costs are said to be a major reason. Dana buys steel and supplies driveline components for Chrysler's Jeep products, as well as its Dodge Viper sportscar, Nitro SUV and Ram pickup. "Our goal is to establish a mutually rewarding supply agreement with Chrysler moving forward," says Dana Chairman John Devine, in a statement asking the bankruptcy court to uphold an earlier agreement between Dana and Chrysler. If negotiations break down, Dana will abandon its business with Chrysler. This latest supplier conflict comes on the heels of Chrysler's nasty divorce from its bankrupt interior supplier Plastech, and reinforces Chrysler's (somewhat undeserved) rep as a notorious supplier abuser. On the other hand, you can't squeeze blood from a stone, and Chrysler's financial situation hardly allows it to practice far-sighted largesse with its business partners. Rock, meet hard place.

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  • Windswords Windswords on Aug 07, 2008

    Chrysler is building their own rwd axel plant in Marysville, Michigan at a cost of $700 million. The plant is to open in 2010. Too much of a coincidence. Could there be more to this?

  • Dan Dan on Aug 07, 2008

    Never ending bad news from Chrysler. Even the suppliers don't want to do business with Chrysler. Sales down ,Suppliers unhappy, low moral of workers, banks not willing to lend, leases stopped but hey Chrysler is ahead of it's financial target? Come on Cerberus who are you kidding?

  • OldandSlow OldandSlow on Aug 07, 2008

    Bloomberg News states that Dana wants a BK judge to confirm that the current money losing contract with CerbChrylser is over at the end of the year. CerbChrysler maintains while its true that the contract expires on December 31st - its original purchase order should allow it to continue to pay the original price per unit. It seems that Dana does not want to cut the cord with CerbChrysler completely. So, they may be selling other components which do make money for Dana. CerbChrysler had its debt downgraded yet again, "further into junk territory" - welcoming them to the CCC+ Club.

  • AJ AJ on Aug 08, 2008

    I know Jeep can be sold to about anyone, but I'm still worried. I don't need a new Jeep now, but I will later. It's been nice that Jeep has had the other components from the Chrysler line. Such a shame...