Posted on 02/04/2008 11:03:53 AM PST by E Rocc
Auto supplier with Greater Cleveland plants files for bankruptcy Posted by Robert Schoenberger February 04, 2008 10:25AM Categories: Autos, Breaking News, Economy, Manufacturing Plastech Engineered Products, a Michigan company with plants in Cleveland, Brooklyn and Strongsville, filed for Chapter 11 Bankruptcy protection last week, a move that has already shut four Chrysler plants, including Toledo's Jeep plant.
According to filings in the U.S. Bankruptcy Court for the Eastern District of Michigan, the filing comes following a breakdown of relations between Chrysler and Plastech.
Plastech has been in financial crisis for months, and it had been working with Ford, GM and Chrysler on a financial bailout plan.
But on Friday, Chrysler instead informed Plastech that it was canceling all orders with the company and won a temporary restraining order, ordering the plastics company to turn over all molds to Chrysler.
Plastech made its bankruptcy filing later that day. Chapter 11 Bankruptcy allows companies to continue operating while they restructure their debts.
In Bankruptcy Court filings, Chrysler said Plastech supplies parts for virtually all of its vehicles, and without its plastic molds, it will eventually have to shut down all its plants.
General Motors also filed a brief with the court, asking only to be named an interested party in the case.
Calls to Plastech's Detroit offices were not immediately returned
Heavily unionized????
H*LL yes.
Good job! Squeeze those suppliers till they choke! “Just in time” my arse.
I remember hearing a buyer for Intel once gleefully recount how she had squeezed the pricing of two component suppliers for their network cards so low that they both quit selling the parts and shut down those product lines. She actually thought that was something to be proud of.
Not too long ago the new CEO Nardelli openly said that Chrysler was actually bankrupt although not operationally bankrupt; meaning they could pay the bills but the value was less than zero when all the costs and assets were added up.
Some of their products are truly junk. He even said so. They are discontinuing about four products immediately and I suspect more are on the way. Just think about this. Daimler lost $37 billion and paid more Cerberus money to take it off their hands. How bad can it get? The truth is that Chrysler should have been put out of its misery 25 years ago.
And if you thought military procurement was any better, the primes are killing their subs - with the net result of fewer capable shops and higher prices.
Brilliant.
That which can not go on forever won’t
“Stein’s Law” — (Herb Stein)
gm....ford....chrysler...you cannot move up the ladder until you put a supplier out of business...
People are sometimes so foolishly blind to what they are doing to the other person in a business transaction. They never step back and realize that for the guy who gives quality and service, he has to make money, but they drive the very people they need out of business. And when they end up with a major problem because they bought on the basis of price only without considering quality and service, it often costs them more than what they “saved” on the front end. I see it in construction-related stuff every day.
I believe that the US auto manufacturers have suffered for decades now from the idiocy of letting the bean counters run them. Car companies need to be run by car folks and not accountants. The last car guy to run an American car company was Iacocca.
Example: How in the hell can the company that gave us the Corvette, new style Cadillacs and the GM trucks give us the Aztek?? Any moron from a high school mechanical design class would have laughed if shown a pre-production drawing of the Aztek. And to top that off, they quit production of the Camaro and Firebird, leaving the market wide open to the Mustang, which is selling like hot cakes by the way. Of course, Ford has their problem children too. Chrysler, being the smallest of the three, is more susceptible to the financial ups and downs of the qwerky auto market.
Well. The market is a harsh mistress...but at least she’s self-correcting if not smooth.
And the market doesn’t have to hold hearings to determine what should be done.
Most of the Big Three suppliers have become suppliers to the “import” plants in the US. They’ve correspondingly had to improve their quality or be rejected.
Looks like Plastech couldn’t do it and was resigned to just supplying the Big Three with their lower quality standards. If that’s the case, good riddance.
I smell a rat. Chrysler was going to pull all their dies. So where were they going to get the parts they now can't run without? I'm familiar with their part/process qualification process, I've been through it. It's very lengthy and exhaustive (it's actually a very solid and sensible process), but were they going to deliver those dies elsewhere and have production commence the next day? Qualification aside, it's just not possible.
-Eric
That's not how I read the article. Sounds like they were hosed anyway and just salvaged what they could by getting what they probably paid for in NRE, or to protect the IP from being sold off by a bankruptcy judge.
Our 3/4 ton Dodge pickup truck is an awesome vehicle. I’d buy another one, no hesitation.
Oldsmobile had the hottest car for years, the Cutlass. As I recall the suddenly stopped production. They never recovered.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.