The custody battle over Plastech's injection mold tooling just got a lot more complicated. Mlive.com reports that H.S. Die, the company who manufactured Plastech's Chrysler-specific parts tooling, says that it holds a special-tool lien. In theory, the agreement gives them legal priority to reclaim the equipment now that Plastech has entered bankruptcy. (Chrysler is appealing the decision barring the automaker from reclaiming the same tooling.) H.S. Die was surprised to find itself on top of the "unsecured creditors" list; Plastech owes it $9m. H.S. Die has filed a legal notice, arguing its legal right to the equipment– registered with the state of Michigan– as unpaid-for merchandise. If the court rejects the die maker's arguments under this under-interpreted lien jurisprudence, H.S. Die stands to lose millions. If, on the other hand, the tooling is handed back to H.S. Die, Chrysler could find itself in the awkward position of having to work-out a deal with yet another supplier to keep production lines moving. The saga continues…

Attention car companies who desperately want to beat Toyota at the green car game: start building diesel hybrids now. Accordingt to Automotive News [sub], Toyota President Katsuaki Watanabe says his company has no plans to build a hybrid diesel car. Toyota leads worldwide sales of gas – electric hybrids, plans to offer diesels on the Tundra/Sequoia platform and sells a truck in Japan with a hybrid diesel powertrain. So what's the issue? Unlike other companies we could mention (cough, GM, cough), Toyota doesn't see the value in rushing prohibitively expensive green technology to market. "A diesel hybrid car would cost more than a gasoline hybrid," explains Watanabe, reminding the greenrush crowd that the car business is still a business. So what of diesel hybrid concepts from Mercedes and Volkswagen? We can only assume that consumers have long become accustomed to overpaying for German offerings. 

As the American Axle (AA) strike stretches into its second week, Automotive News [sub] reports that GM may be considering bailing out yet another troubled supplier. Thus far, GM has claimed the Axle-caused work stoppages gave them an opportunity to trim bloated truck and SUV inventories. But as the strike begins to halt all of GM's high profit North American truck production, and hobbles hundreds of other suppliers, this shit is getting serious. Negotiations between the United Auto Workers (UAW) and American Axle management are deadlocked. American Axle wants to cut UAW wages in half across the board, from $28/hr to $14/hr. The only viable scenario at this point: the now-standard package of buyouts, buydowns and flowbacks. Once GM has finished buying out enough of its own workers, it could move the holdout American Axle workers to its own payroll, freeing AA management to hire new employees at the now-competitive rate of $14/hr. But isn't the point of GM's buyout program to trim its payroll fat? And hasn't GM already blown its bailout budget on Delphi? Chapter 11 if they do, Chapter 11 quicker if they don't.

In spite of the fact that BMW's eliminating jobs around the world, the German automaker is expanding their Spartanburg, South Carolina plant. The Spartanburg Herald-Journal reports the transplant aims to churn-out 240k vehicles per year by 2012. That's well up from the approximate 160k Bimmer's NA plant currently produces. At the moment, Bimmer builds the Z4 roadster and X5 sports utility activity vehicle in the Palmetto State. Later this year, they'll add the X6 sports whatever-it-is. In 2009, Spartenburg will produce a diesel version of the X5 and a hybrid version X6 for the U.S. market. The following year, BMW plans to emigrate Z4 production to Germany and immigrate the next-gen X3 from Magna Steyr in Graz, Austria. What if the weak dollar strengthens? As they say in S.C., dum spiro spero.

Last July, Delphi agreed to pay GM $2.7b when it emerged from bankruptcy to resolve "long-standing issues." In November, GM said it would settle for $750m in cash and $1.2b in stock AND it would loan Delphi $750m towards the $6.1b needed to exit bankruptcy. And now… GM's agreed to loan their former division another $2.8b. The Detroit News says the new agreement still transfers Delphi stock to GM (now worth $200m less). And Delphi's cash payment to GM shrinks to $175m. Yes, well, five of the six non-GM investors bankrolling Delphi say they'll walk, unhappy with GM's part of the deal. The lead investor, Appaloosa Management, claims the loans are "contrary to Delphi's stated goal of reducing its reliance on and exposure to GM and developing relationships with other (automakers)." And here's the kicker: Delphi has asked the bankruptcy court to force Appaloosa and its partners to continue supporting the restructuring plan. (How to win friends…) Meanwhile, Delphi is still wrangling over providing collateral for some $2b in unpaid pension obligations. They've only put up $150m so far; the Pension Benefit Guaranty Corp. has filed $600m in liens against Delphi's foreign assets. Legally, the PBGC could seize Delphi's foreign ops to satisfy those obligations. Practically, all Hell would break loose. 

In an announcement that surely had industry-types frantically calling their favorite headhunters, Businessweek reports that nine of Toyota's top U.S. executives will be retiring by the end of the year. There are now openings for vice president positions in logistics, sales, motorsports, business technology, Toyota University and the top job at Toyota Racing Development. Toyota maintains that these are all normally-scheduled retirements but… what of the Jim Press effect? Aren't experienced Toyota managers learning that they're worth their weight in gold to, ahem, less successful, car companies? Analysts say that this year's sagging sales mean the the time is right for ToMoCo of NA to bring-up a new generation of leaders. Before you polish-up your c.v., the Japanese automaker has a long history of promoting from within. Hai!

When Renault bought a 25 percent stake in Russia's AvtoVAZ late last month, we thought it was just another company chasing the big money in Russia's expanding car market. Having jointly manufactured cars with VAZ for years, GM clearly sees the French incursion in slightly more threatening terms. Speaking in Geneva (via CNN Money), GM Europe president Carl-Peter Forster says "it's too early to tell" exactly how the Renault play will affect the Chevy Niva joint factory in Tolyatti. But he's clearly worried. So worried in fact, that he became downright effusive while describing his company's desire to continue the Tolyatti venture. Calling the factory "a nice little diamond, a gem," Forster unwittingly raised serious concerns about his mental health and/or his local knowledge. Less than a week ago, the head of procurement for AvtoVAZ was found stabbed to death in his Tolyatti apartment. It's hard to decide which is funnier: Renault buying a stake in VAZ within days of the stabbing of one of its executives, or GM's concern that it won't be the only game in a town where gangs are waging a turf war to control the auto industry. As the Brits say, it's six of one, a half dozen of the other.

Plastech may not have done so well in the plastics molding business lately, but it sure knows how to play the doormat with aplomb. In a touchingly "stand-by-your-man" moment, Plastech General Counsel Kelvin Scott confirmed yesterday that the bankrupt firm would continue supplying Chrysler with parts "indefinitely." This announcement comes despite the fact that the Pentastarred lawyers are currently working on their second attempt to legally extricate the very tooling Plastech uses to produce Chrysler parts. So why is Plastech eliminating the threat of work stoppages at Chrysler plants and thereby losing all of its negotiation leverage? Is it playing nice for Judge Shefferly, who has already staved-off round one of Chrysler's legal predation? Our theory? Plastech knows it's products are of such poor quality that the best way to hurt Chrysler is to keep 'em rolling into their plants. Just kidding. I think.

We've all heard of "downsizing," "rightsizing," "smartsizing" and "managed redundancy." Whatever you call it, someone's losing their job. Ford has come up with another term to add to our lexicon of executive euphemisms: "capacity action." In a press release earlier this week, Ford outlined its plans for "capacity actions for Chicago and Louisville assembly plants and Cleveland engine plants." The Chicago (Taurus, Taurus X and Sable) and Louisville Explorer, Explorer Sport Trac and Mountaineer) assembly plants will operate on one shift beginning this summer. Cleveland Engine Plant #2 will cut to one shift in April. And the re-opening of Cleveland Engine Plant #1 (shut down in May 2007) has been postponed from this spring to the fourth quarter. Joe Hinrichs, group VP for global manufacturing says the "capacity actions are designed to ensure that our manufacturing facilities are operating in the most efficient way." Ford continues to offer 10 different retirement and buyout packages to facilitate these cuts. I mean, "capacity actions."

Hyundai Chairman and CEO Chung Mong-koo was convicted in Korean court for embezzling some $100m in company funds. Thanks to Korea's corporate crime-friendly legal system, Chung didn't spend day one (day woo?) in prison. While Hyundai's profits soared under Chung's leadership, indignant shareholders are baying for blood. Moral outrage? Nah. Hyundai's stock growth slowed to six percent last year in the wake of the scandal, well below the Korean benchmark index of 32 percent in the same period. Chung and his son Eui-son (who heads Kia Motors, so add nepotism to the score card) hoped to deflect public criticism by donating over $1b in stock to the public. Only they haven't done it yet. Most of the funds Chung removed from Hyundai's corporate coffers were spent on a slush fund to bribe public officials, which at least partially explains Chung's continuing freedom. It may also explain why many institutional investors appear to be standing behind Chung. Meanwhile, a minority group of shareholders is preparing a lawsuit claiming damages stemming from embezzlement and other mismanagement. This is so not a good thing.

Reuters reports that Ford is developing a new business plan for Volvo, which would require allow the Swedish subsidiary to operate on a more independent basis. Citing slides posted to the company's website– which will accompany a presentation to analysts at the Geneva Auto Show– the report indicates that Volvo's return to "sustainable profits" is "the top priority." Not a bad plan, considering the persistent rumors that Ford had shopped Volvo around without garnering a single serious purchase offer. Whether the "appropriate business arrangements" can really improve Volvo's lousy recent performance remain to be seen… especially if this moves turns out to be some kind of accounting shell game. Jaguar and Landie sale in trouble. Volvo hung out to dry. Will no one relieve me of these brands?

While GM's Board of Bystanders was busy congratulating GM CEO Rick Wagoner and CFO (now COO) Fritz Henderson for the company's "tremendous progress," its suppliers were busy suspending ops. Automotive News [sub] reports that the American Axle strike that has idled six soon-to-be-seven GM plants is taking it toll throughout GM's supply chain. "Lear Corp., the seating supplier to GM's light trucks, has laid off 700 employees and idled one plant, spokesman Mel Stephens said. 'Where GM production is down, we are down,' said Stephens. He said four more plants are operating at reduced speed and more closings are expected." Interior supplier (and Chrysler suitor) Magna International says it's "adjusted its production schedules." The plant closures' ripple effect on other suppliers is sure to spread quickly and widely. As of this writing, no new negotiations between American Axle and its United Auto Workers members are scheduled. Even if the strike was resolved today, restarting production would be an expensive and time-consuming process, that GM and its other suppliers can ill-afford.

As we reported yesterday, Ford's sale of Jaguar and Land Rover to India's Tata Motors is far from a done deal. In light of today's confirmation that the transaction will not go through this week as predicted, it looks like Tata's reach may exceed its grasp. Reuters questions the role the British brands would play amongst Tata's lineup of commercial-duty trucks and compact to sub-compact cars. Another issue: Tata's credit rating. It turns out that Moody's and Standard and Poor's placed Tata on review for a credit rating downgrade when the Indian firm emerged as the frontrunner for Jag/Landie. Not coincidentally, Tata's stock slid ten percent during its six month courtship of Ford's cast-offs, while the rest of the Indian stock index grew by nine percent. Speaking in Geneva, Rattan Tata was quoted as saying he remains "reasonably confident" that the deal will go through. Reasonably? Uh-oh.

When a bankruptcy court judge ruled that Chrysler could not strip bankrupt supplier Plastech of its proprietary tooling, it looked like the two were stuck with each other. And yet, a surprisingly short extension to their interim supply agreement signaled more conflict ahead… and here it comes. The latest supply contract is set to expire at midnight on Monday. The Detroit News reports that rather than extend it again, Chrysler will appeal the ruling and try once more to remove their equipment from the Plastech plant. In their court paper, ChryCo's lawyers postulate that "the court's decision may have significant implications for the way automakers and their suppliers do business in the future." True dat. And if Chrysler's appeal fails? Industry watchers say it could put Detroit's suppliers at a huge advantage over their customers… and potentially trigger another wave of supplier bankruptcies.

GM and Chrysler weren't the only ones singing the blues when February's sales numbers plunked onto the e-mat. Automotive News [sub] reports Ford and Toyota also showed declines in February– although not quite as precipitous as The General and Mopar. Ford's sales fell 6.3 percent compared to last February, while Toyota's (including Scion and Lexus) dropped a jaw-dropping 6.6 percent (when adjusted for the extra selling day this year). Toyota's atypical performance is attributed to poor truck sales. Group vice president of marketing admitted that ToMoCo's full-size truck and SUV sales "could get tougher before it gets better." With a 37 percent decline in the U.S. construction industry, Randy Pflughaupt ain't just whistling Dixie. Honda, Mazda and Nissan, on the other hand, bucked the trend and actually posted gains. Honda was up 4.9 percent, Mazda increased 6.7 percent and Nissan rose 1.2 percent. Hmmm… the two companies with no V8 engines and no full-sized pickups or huge SUVs showed the largest gains. What does that tell you?