Right about now, U.S. Bankruptcy Judge Phillip Shefferly is deciding the fate of Chrysler Corp. If he rules that parts supplier Plastech must surrender its Chrysler-related tooling, Chrysler will live to die another day. If he rules that Plastech has the right to keep the machines, Chrysler will have to play ball with Plastech (indeed the judge may "force" both sides to play). And if Chrysler agrees to pay the supplier on a shorter term basis for its parts than the usual 90 to 120-day basis, and all the other parts makers want a piece of that action, Chrysler's cash pile will fail and it will still head for the buffers. Anyway, the star.com reports that the lack of plastic parts has cut output by about half at Chrysler's Brampton (300, Charger and Magnum) and Windsor (Dodge Caravan and Chrysler Town and Country) plants. "Ed Saenz, Chrysler's corporate communications manager, said the company will be able to operate the two plants on four-hour shifts until the end of the week before completely running out of parts." Just like a labor strike, every day this drags on, it costs Chrysler millions. It's highly unlikely they could last more than three weeks before filing.
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Whatever happens, this will be fun to watch. I’ve got my popcorn out.
Even if Chrysler can grab the tooling today the logistics will be a nightmare.They got to move it set it up,and then get the supply train rolling.
Lots of downtime.Wise move would be to come up with some sort of agreement with the supplier.
As another poster pointed out.This all about gonads,whose got the bigest and who wants to put them on the table.
We will see what Mister Home Depot is made out of real soon.
And TTAC your doing the best job in the media on reporting this thing.Keep it up lots of folks are watching.
Chryslers’ relationship with suppliers wasn’t always this way, in fact they were the company suppliers most wanted to do business with in the 90’s:
http://www.allpar.com/corporate/score.html
http://www.allpar.com/corporate/stallkamp.html
Alas, Stallkamp resigned (probably under pressure) and SCORE was scrapped after Daimler took over.
mikey :
Even if Chrysler can grab the tooling today the logistics will be a nightmare.They got to move it set it up,and then get the supply train rolling.
Mikey, it’s even worse than that. Do you have any idea how long it’ll take Chrysler to ship all those toolings to China?
I don’t think it will the that bad if they get the tooling. Obviously part of the origional plan was to take the tooling somewhere else. Its the whole “no you can’t take the tooling” that seems to be the monkey wrench. Chrysler has a plan once the tooling is in hand… it should just be a matter of catch up.
As someone who spent 10 years inside a cheap plastic Neon, I love the irony that Chrysler could be brought down by its cheap plastic interiors.
Karma.
They must have had a plan.
Even Chrysler management can’t be this inept.
I think they they must be set to run the tooling someplace else and were foiled by the declaration of bankruptcy. If they just need the dies and tooling they could ship them to China quickly.
Just to clarify the story from the Star.com
The 80% that workers recive is 80% of takehome pay then its taxed.The money comes from Canada employment ins,if you qualify and then is topped up from the supplement uneployment fund {SUB}Not! from the companys bank account.
Keep in mind the Chrysler SUB fund is in deep poo poo right now.No money no benifits.
In real money workers go from a take home of 940$
a week to about 640$IF!they qualify and a lot of em don’t.
More like 69% eh?
We don’t know the exact nature of what tooling they are holding but the way it closed down 4 assembly plants quickly and stands to strand more it can’t just be a few. I would imagine it could take several days or a week just to remove all of it from Plastech and then ship it to God knows where they plan to do it(I really think China). Then they have to spend more time, days or weeks setting it all up again and then testing to make sure it’s all set up properly and making good parts(Chrysler may not care too much about that). Sounds like they made a boo boo on this one not having a surplus of parts before they cancelled the contract. Or maybe there is some other reason why don’t know about that forced them to kill it, pressure from Chery or someone else to get work to them. Just guessing there.
its still possible that chrysler only needs some of the parts… Plastech made more than just the horrible interiors. And you can’t run the lines without putting grills and engine covers on. They got over 500 little parts from plastic tech and who knows how many of those parts are going to be reused. The fact of the matter is just a few parts could shut down the plant! Its imagionable that improved interior parts are ready to go from someone else but chrysler didn’t intend on not having their grills ect! Its not like chrysler planned to shut down plants from this move so there is more to it than a simple boo boo
They just reached an agreement, per Plastech’s lawyer. Wonder who blinked? (Chrysler, obviously).
Interim deal reached, carpocalypse averted, For now.
This thing has been an amazing story. I am now lost to figure this stuff out. It’s been over a decade since I did business in Detroit, and it has surely changed.
How does a company like Plastech run on such thin margins that when a SINGLE one of their customers threatens to pull the plug they qualify for bankruptcy. I thought this meant they didn’t have enough customers, but apparently they are doing fine selling parts to 3 other players?
How do the owners live with this mentality? Why don’t they diversify? Charge more? Sell?
Seriously, I don’t get it. Does the management just take every dollar at the end of each year and leave the company broke?
More questions than answers to me. If more of the auto industry is working this way, then it is already dead and we are just waiting for it to fall over.
Chrysler will live to die another day
Brilliant Robert. This is why I keep coming back here.
– When they outlaw puns, only outlaws will have puns
And I thought the end of the nasty cheap Chrysler interiors was here… now we have to continue to be insulted at the cheapness at every rental car counter…