Axel

This could have a negative effect on the Challenger production, maybe slow it down?

Chrysler supplier files for bankruptcy


AUBURN HILLS, Mich. (AP) - Chrysler LLC scrambled to maintain its inventory of plastic parts after a supplier filed for bankruptcy protection.


Plastech Engineered Products Inc. apparently failed to negotiate a bailout package with its customers, The Wall Street Journal reported Friday.

Dearborn-based Plastech agreed to supply Chrysler through the weekend, spokeswoman Michele Tinson said.

The bankruptcy filing had not forced Chrysler to shut down any plants, Tinson said. "But it could potentially," she said. "It could impact a number of plants."

Calls to Plastech headquarters were not answered late Friday.

Chrysler was Plastech's fourth-largest customer, The Journal said. The company has 8,000 employees at more than 30 plants in North America.




(Copyright Associated Press, All Right Reserved)

BootCamp

From the Wall Street Journal:

Plastech Files for Bankruptcy Protection
By JEFFREY MCCRACKEN and TERRY KOSDROSKY
February 1, 2008 9:59 p.m.

Plastech Engineered Products Inc., one of the country's largest minority-owned auto suppliers, filed for Chapter 11 bankruptcy protection Friday evening in Michigan., after efforts to negotiate a bailout package from customers apparently faltered.

Plastech was dealt a blow Friday when Chrysler LLC canceled its purchase orders with the $1.3 billion maker of plastic auto parts like center consoles.
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Chrysler spokesman Kevin Frazier said the automaker, which was Plastech's fourth-largest customer, also began to take their tooling out of Plastech plants.

Like other auto suppliers who have filed for Chapter 11, Plastech was caught between rising costs and falling demand for the products in which its parts are used. The cost of plastic, dependent on an oil-based resin, increases along with oil prices. Detroit's auto makers typically have resisted paying more for a part and have instead insisted on lower prices over the life of a supply contract.

Plastech's filing came on the same day another major auto supplier, Dana Holding Corp., successfully emerged from Chapter 11.

The filing by Plastech, a critical part of Detroit's supply chain, could disrupt the production of many key vehicles, including the F-150 pickup truck, the Ford Edge crossover or General Motors Corp.'s popular large crossovers, the Buick Enclave and GMC Acadia. Today, Ford Motor Corp. represents about 26% of Plastech's sales.

Plastech founder Julie Nguyen Brown, a Vietnamese native and former engineer at Ford, founded the 8,000-person company 20 years ago. The Dearborn, Mich.-based firm has over 30 plants in North America.

Many other auto-plastics firms, such as Collins & Aikman Corp., have also tumbled into bankruptcy in recent years.

The voluntary filing occurred around 7:30 p.m. EST in the eastern district of Michigan.

According to its Chapter 11 petition, Plastech has hired the law firms of Skadden, Arps, Slate, Meagher & Flom LLP, Jones Day and Allard & Fish P.C. The company also has retained Lazard Freres Co. LLC as its investment banker and Conway MacKenzie & Dunleavy as financial advisor.

Billionaire investor Wilbur Ross, who has bought pieces of struggling parts makers, has said he expects more bankruptcies and consolidation in the auto supplier industry. Ross has created a supplier of interior plastic components with Lear Corp.'s former interior systems division and some assets of the former Collins & Aikman Corp.. Lear is a joint venture partner in International Automotive Components.

Mr. Ross said recently that he sees other large "walking wounded" parts makers seeking Chapter 11, though he didn't name names.



Looks like this was more a "cause" than an "effect". It also appears that this will hit the other two big Detroit automakers harder than Chrysler LLC.

Paladin06

Yes this could have a considerable impact on production if these guys were a sole source supplier and the amount of inventory Chrysler has on hand.

MGDMike

Isn't Chapter 11 just for restructuring?

BootCamp

I believe Chapter 7 is business liquidation, and Chapter 13 is for private individuals.
Under Chapter 11, I don't believe the company automatically goes into "receivership", but receives a temporary "stay" from obligation to it's creditors, and is forced to do things much differently under the watchful eye of a court appointed trustee (or board of trustees).

stroken56

As long as the court appointed trustee has ordered Challenger # 6,401, we'll be OK right?

MGDMike

Thank you for summing that up! The only chapters I want in my life is the books I read

claymore

It was just announced on CNN that Chrysler was stopping production at four plants and one complete shift at another, due to lack of parts. Plants may be down as long as three months, stated a Chrysler PAO. [:@]

BootCamp

I think the question really is "which plants"?

Personally, since I'm not looking to get an '08, and won't be buying/ordering until summer, this shouldn't delay MY Challenger much - everything should be "tidied up" by then.

claymore

Just found out that the Brampton plant is not on the hit list, but about 10,500 people will be out of work for a while.