Chrysler Sues Getrag Over U.S. DSG Production

Edward Niedermeyer
by Edward Niedermeyer

Chrysler uses Getrag DSG transmissions in its Euro-market Journey, Avenger and 300C offerings, They’d planned on offering them on its American models as well. So much for that, at least for now. Chrysler is suing Getrag in Michigan for failing to raise $300m in debt financing for its new factory. Automotive News [sub] reports that the Tipton plant is the victim of a complex partnership disagreement that has delayed the 2009 production date and, now, casts the entire project into question. Like many a lawsuit, the conflict defies simplification, but Automotive News condenses it thusly: “The complaint says that Chrysler had agreed to a price increase on the transmissions to get Getrag to sign a definitive agreement for the project. Getrag had balked at the agreement and briefly stopped work at the construction site in December 2007, the lawsuit says. Chrysler alleges that Getrag had assured Chrysler that it could raise the debt financing. The lawsuit says Getrag did not make a good faith effort to get the money.The lawsuit indicates that Getrag had sought to line up the money from German banks as long as it was guaranteed by the German government. Chrysler argues that it should have been informed of that condition before signing the definitive agreement. As it turned out, the German government would only guarantee the debt if Chrysler set up a $300 million escrow account to assure repayment, the lawsuit says.” Simple.

Edward Niedermeyer
Edward Niedermeyer

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  • IDANECK IDANECK on Oct 09, 2008

    Yes, the Ford/GM transaxle would be perfect...

  • AG AG on Oct 09, 2008

    So wait, they need a 300 million dollar loan that the Germans say they must put up 300 million dollar cash collateral? In what respect is that even a loan!?

  • John Horner John Horner on Oct 09, 2008

    Are there any suppliers Chrysler isn't taking to court? I cannot imagine what company would willingly deal with the Cerberus crowd.

  • Timd38 Timd38 on Oct 10, 2008

    The list of suppliers that they are suing will soon be larger than the suppliers that are still shipping them. Put a fork in these guys. The current financial crisis will kill them off sooner than later along with the $25B our government is giving the industry.