Posted on 06/16/2009 6:42:22 PM PDT by 2banana
American Axle sues steel maker to resume shipments
NEW YORK (AP) -- Auto parts supplier American Axle & Manufacturing Holdings Inc. is seeking a court order to get one of its steel suppliers to resume deliveries, saying that cutting off supplies threatens the entire auto supply chain.
...
In its request filed earlier this month, American Axle alleged that Republic wrongfully backed out of a four-year contract to supply custom-made steel. According to court documents, Republic sought from American Axle a "binding schedule" for deliveries, citing the parts maker's weak financial condition.
(Excerpt) Read more at finance.yahoo.com ...
Central planning and the 5 year plan is next.
Atlas Shrugged,,,,
Who is John Galt!
>> whether you get paid or not.
That doesn’t seem to be the issue here.
The article says nothing about Republic not getting paid.
If American Axle is paying on time, a contract is a contract.
I'd bet they were not paying Republic.
If American Axle is paying on time, a contract is a contract.
Well, Republic delivers the steel on credit. American Axle's own auditors are warning about their sustainability to continue operations. Since this has shaken Republic's confidence about getting paid after the fact for product already delivered, they in essence asked AA to commit payment for an agreed amount of product in advance. As far as I can tell, AA declined, and Republic basically told them 'no payment in advance, no steel'.
As an aside, it is highly unlikely that AA would be able to pay for the steel even if they got it. Their business is made up mainly by supplying GM axles for trucks, and it's going to be months (if not years) before GM buys another truck axle. So the steel not only won't be paid for, but is not even needed - except in anticipation of GM's new owner bailing out their supply chain. In which case it would be very clever of them to obtain as many assets on credit as they can now, so they will be absolved of the debt once Obama presses their reset button.
That’s suggestive, but it’s not proof, or even evidence, that American Axle was not paying its bills.
Slapping back at government ownership is right and necessary.
But so is the rule of law, including contract law. And property rights (including, again, contractual rights) are also an important cornerstone of true conservative belief.
Just sayin’.
OK, that’s better.
Ayn Rand was prescient...
>> it’s going to be months (if not years) before GM buys another truck axle.
Wait a minute. Is that really true? GM has shut down ALL production?
I never heard that. Link please?
Beat me
>> I would say the gm bankruptcy nullified all contacts.
Regardless of whether or not you would *say* it did... did it in fact?
>> but you could give me a review of your expertise in contracts
I could, but why should I bother? That’s a pretty damned lame response. I expected better of you.
It really depends on the wording of the actual contract, and the specific details of all the evidence from both parties. In general, however, if there is a circumstance change incurred that diminishes or eliminates the ability of a party to meet its contracted consideration, then the contract might no longer be valid.
It sounds to me like Republic determined that AA may no longer be able to provide consideration, and asked AA to prove they could still uphold their end. Since they were unwilling or unable to do so, Republic took it as admission that the consideration was withdrawn, and the contract nullified.
If that's the case, and AA cannot prove to the court that they can meet the consideration required by the contract then they will lose.
>> It really depends on the wording of the actual contract
That is a good point.
Do we know anything about that?
I never heard that. Link please?
How about from the very article we are commenting on:
However, GM spokesman Dan Flores said the dispute does not affect GM for the time being because the automaker has already ceased virtually all truck production.
Fair enough.
That is a good point.
Do we know anything about that?
Nope. But I'm sure the lawyers on both sides do.
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