Chrysler Group has sued Daimler alleging a breach of an agreement to provide diesel engines and other parts to the Detroit carmaker after it emerged from bankruptcy.
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A complaint filed in US bankruptcy court in New York cited “Daimler’s willful refusal to honour its obligations under contracts assumed by Old Chrysler and assigned to (the new) Chrysler”, news agency AFP reported.
Chrysler said Daimler was seeking “to extort Chrysler Group into paying for costs for a diesel engine that Daimler agreed to forego a few months ago,” and claimed this was “a breach of its obligation to negotiate in good faith.”
“Rather than present those issues to the bankruptcy court as agreed, Daimler has refused to execute final agreements covering the supply of key parts unless Chrysler accedes to its demands,” the US automaker said in a statement.
The new firm said it had the right to assume contracts guaranteeing the supply of Daimler-made diesel engines and other components which other media reports said included torque converters and steering columns.
Chrysler said it was seeking a court order requiring Daimler to supply the parts and to pay damages.
Daimler said in a statement that “the claims are without merit” and that it “will be contesting them vigorously.”
“This is not a dispute about Chrysler’s rights to existing contracts transferred to it in the bankruptcy case,” Daimler said.
“Rather Chrysler has been asking Daimler to change existing agreements and enter into completely new agreements.”
Daimler sold an 80.1% stake in Chrysler to private equity firm Cerberus, ending a marriage of nearly 10 years and renounced its remaining stake ahead of the company’s bankruptcy filing last May.
Mercedes diesel engines found their way into a number of Chrysler and Jeep-branded models during the DaimlerChrysler era and are still used in models sold here in Europe including the Chrysler 300C line and Jeep Grand Cherokee. The automaker also buys diesel motors from VW Motori and Volkswagen – a VW unit is used in some export marekt versions of the Dodge Journey minivan.
