Chrysler Group LLC's Bankruptcy this summer has derailed the auto maker's contract with a supplier that was planning to equip a wide range of Chrysler, Dodge and Jeep vehicles with state-of-the-art telematics service, beginning this fall.
Hughes Telematics Inc. says in a financial filing its long-term contract with Chrysler was terminated in July after the auto maker emerged from Chapter 11. As of June 30, Hughes says it incurred $8.5 million in costs associated with the contract.
The supplier had been negotiating a new telematics-service agreement with Chrysler post-bankruptcy.
The auto maker “introduced additional business terms” that were not part of the original arrangement, which led to an impasse in the negotiations, Hughes says.
“As a result, the company discontinued working with New Chrysler to deploy (Hughes') hardware,” the filing says.
The first vehicle slated for the system was the '10 Dodge Journey CUV. An aggressive rollout across Chrysler's lineup was to follow. An informed source tells Ward's that Chrysler planned to integrate the system in all its vehicles by 2012.
Chrysler declined to answer questions about the Hughes contract.
Meanwhile, Hughes will introduce its technology in Mercedes-Benz vehicles through a contract with Mercedes-Benz U.S.A. The contract, which takes effect in November, displaces the auto maker's previous telematics provider, ATX Group Inc.
