Chrysler has reached an interim production agreement with Plastech Engineered Products that has restored the shipment of interior, exterior and powertrain plastic components until 15 February, the automaker said in a statement.
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All affected manufacturing operations immediately resumed production yesterday with second shift employees reporting as normally scheduled.
The affected operations were the Belvidere assembly plant in Rockford, Illinois, Newark assembly in Delaware, Sterling Heights assembly in Michigan, Toledo North assembly plant in Ohio and its associated supplier park.
But the Associated Press said the deal only temporarily halted a financial dispute that had closed the four assembly plants.
The deal was reached in US Bankruptcy Court in Detroit allowing Plastech to start making the interior and exterior parts on its second shift Tuesday afternoon, allowing Chrysler to restart production at the factories, the news agency added.
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By GlobalDataThe four plants shut down on Monday due to a lack of Plastech-made door panels and other interior and exterior parts – the supplier has filed for US Chapter 11 bankruptcy protection.
AP said about 10,500 workers had been idled by the dispute, which had threatened to spread to all 14 of Chrysler assembly plants.
AP said several other bankruptcy hearings are scheduled between now and 15 February and these must settle the broader dispute which arose in the courtroom on Thursday when a lawyer for a group of creditors accused Chrysler of causing the bankruptcy – a Chrysler lawyer reportedly denied the accusation.
The report said Plastech, which supplies Chrysler with about 500 plastic interior, exterior and powertrain components for nearly all of its vehicles, filed for Chapter 11 bankruptcy protection on Friday after the automaker told the supplier it was seeking other sources for the parts.
Chrysler sued Plastech on Friday, claiming Plastech no longer could meet its production demands, the Associated Press said. The automaker sought an immediate resumption of parts production as well as the tools to make the parts, which it owns.
Without the tools, Chrysler said in its lawsuit, it eventually would have to cease production of vehicles system-wide.
AP added that Plastech’s contracts with the automaker were worth about $US200m and that it does a total of about $1.3bn in total business, including contracts to supply General Motors and Ford.
Ford and GM said their parts supplies had not been interrupted, the Associated Press added.
