LLC cannot recover its tooling from bankrupt Plastech Engineered Products Inc., a judge rules in Federal Bankruptcy Court in Detroit.
The auto maker is “obviously disappointed,” spokesman Kevin Frazier says in a statement. However,will “work with all the parties” to ensure vehicle production goes uninterrupted, Frazier adds.
The judge was expected to make his reasons public in a written opinion.
Plastech filed for Chapter 11 protection Feb. 1 – after the auto maker terminated its agreements with the Tier 1 supplier. Plastech reportedly received 449 warnings from Chrysler for substandard performance last year.
But the bankruptcy triggered a stay that prevented Chrysler from recovering its tooling from Plastech, thereby thwarting the auto maker from transferring the work to alternate suppliers such as Decoma International Inc.
Sources tell Ward’s Decoma, a subsidiary ofInternational Inc., is among the suppliers waiting in the wings to inherit the Plastech work.
The dispute disrupted production at several Chrysler plants until an interim supply agreement was struck. Plastech and Chrysler have since reached another interim deal to ensure delivery through Feb. 27.
Plastech supplies parts for more than half the auto maker’s products.