Ford will not award any new contracts to Collins & Aikman after it cut off deliveries over the weekend, causing a Ford plant in Mexico to shut down.
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According to the Wall Street Journal (WSJ), Collins & Aikman halted shipments to Ford’s Hermosillo plant on Friday, causing the Ford plant to shut down Friday night and Saturday morning. The move was said to be part of a pricing dispute over instrument panels, carpeting and other interior plastic parts. The WSJ said several million dollars were at stake.
“The relationship has been irreparably harmed,” Ford spokesman Paul Wood told the WSJ. “We’re very disappointed C&A would choose this course of action over a commercial disagreement.”
Ford will not end existing contracts with Collins & Aikman but will also not enter into any new contracts.
Collins & Aikman filed for bankruptcy protection in the US in May 2005. In August this year it said it had filed a reorganisation plan with the bankruptcy court and hoped to exit Chapter 11 early next year.
There have been rumours of potential buyers but tough conditions in the US market have so far appeared to deter firm bids.
