Chrysler's told its suppliers to cut their prices by 25 percent and get the Hell out of Dodge. ChryCo Purchasing Czar John Campi unveiled his employer's latest supplier initiative to hundreds of Chrysler suppliers. Here the deal [via Automotive News, sub]… ChryCo promises to give its suppliers 30 days' notice of its production schedule (rather than seven), share more parts among nameplates, and reduce late engineering changes. Suppliers will split the savings with Chrysler– unless they fail to reduce component costs by 25 percent. If not, they'll have to cut prices and eat the loss. (The 25 percent reduction benchmark applies to parts both old and new.) With "the vast majority" of Chrysler components coming from America, Campi is encouraging suppliers to move operations overseas to facilitate the costs. Holy shit! It's bad enough that Chrysler's driving itself into the ground, but owners Cerberus seem hell-bent on taking its entire American supply chain down with it. You can't squeeze blood from a stone; with the price of nearly every raw material rising, Chrysler's audacious cost-cutting will only yield more bankruptcies. And lower quality products. And American job losses. This will not make Chrysler any friends when it hits the bankruptcy buffers, nor should it.

Three months later and enough bluster to buffet a Cape Cod winter resident for a decade, and the United Auto Workers (UAW) have reached a tentative agreement with GM parts supplier (and former GM Division) American Axle. Automotive News [sub] reports that, uh, the UAW have reached a tentative agreement with GM. That and the fact that ratification is "scheduled" for next week. I sure hope they tell the workers. And where are AN's vaunted "inside sources" when you need them? Of course, AN pads out its story with a little background/analysis. The good news? The strike "gave GM a chance to run down overstocked inventory for slower-selling models including its Chevrolet Silverado pickup." [Frank William's report on this "run down" on Monday.] The bad news? "GM, which books revenue when it produces vehicles, also said that the strike had cost it $800 million in the first quarter and 230,000 units of lost production as of April. GM had also shut or partly idled over 30 facilities and put thousands of its own hourly workers on lay-off due to parts shortages caused by the strike." Ramping-up production ain't like flicking a switch neither; so expect that cash burn to smolder a while. What's more, GM will no longer have any excuses. They'll have to face the fact that their truck and SUV business has rolled over and died.

Can a guy get weekend off? Jeez. You put your proverbial pen down for five minutes and the next thing you know Automotive News is tossing the alerts at you like a Vegas knife thrower. Most of the time, it's GM trying to sneak in some bad news (e.g. Rick Wagoner's $14.4m pay packet) while non-OCD reporters and stock market traders pursue what's euphemistically called "a life." OK, so, first up: auto supplier Delphi have sued investors Appaloosa [AN, sub] and eight co-conspirators for walking away from a bankruptcy exit plan for the troubled (and how) former GM division. "Delphi is alleging a breach of contract and fraud, and is asking the court to provide up to $2.55 billion in equity funding and to pay compensatory and punitive damages in an amount to be determined at trial." (Of course, that's just bad writing; the court doesn't have $2,55b. But you get the idea.) Any such court case would ehance Delphi's United Auto Workers' ire and feed TTAC's grist mill; like this little gem from Delphi Veep David Sherbin. "The plan investors vigorously pursued a prominent role in our restructuring, received over $60 million in fees for their commitments." Wow! Add in the lawyers fees– which could easily eclipse that amount– and there's no question Delphi's ignoring the wise British maxim "When you're in a hole, the first thing you do is stop digging." In any case, once again, it looks like a GM – Delphi bailout could well be the cash burn that finally sets The General's hair on fire, helping secure their seat next to Delphi in federal bankruptcy court. Next up: the UAW "settlement" at American Axle…