PSA Peugeot Citroen parts arm Faurecia has sued Chrysler for US$110m, claiming the US automaker failed to pay engineering costs it owed when vehicle sales plunged.
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Faurecia claims Chrysler did not reimburse it for the cost to develop and supply components related to four vehicle programmes including the Dodge Nitro SUV, according to the lawsuit, which was filed in a Michigan court this week, according to Reuters.
Cerberus Capital Management-owned Chrysler, said the claim misrepresented the nature of the contract between the two companies.
“Faurecia has taken huge liberties in this lawsuit, grossly overstating alleged damages and totally absolving itself of any assumption of risk, contrary to our supply agreements with the company,” Chrysler spokesman Mike Palese said in a statement cited by the news agency.
The report said the Faurecia lawsuit was one of several disputes between Chrysler and suppliers to become public in recent months and came at a time when US auto sales had plunged to a 27-year low, adding to the intense pressure faced by suppliers from tight credit conditions.
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By GlobalDataFaurecia supplies Chrysler with parts including the instrument panel, door panels and seats for the Chrysler Sebring and Dodge Avenger sedans and exhaust systems for the Dodge Nitro SUV and Dodge Caliber hatchbacks.
Faurecia reportedly said sales of the Chrysler vehicles it supplies plunged far below the automaker’s initial projection in 2008.
It said sales of the Dodge Nitro were 73% below Chrysler’s contractual projections while sales of the Chrysler Sebring and Dodge Avenger sedans were 46% below the automaker’s forecast.
Faurecia also claimed that Chrysler improperly shared the company’s proprietary design and manufacturing data with an unnamed Chinese manufacturer, according to Reuters.
Chrysler last October ended a supply agreement with Getrag Transmission Manufacturing to produce transmissions and sued the company for failing to secure a pledged debt financing to build a plant. That prompted Getrag to file for bankruptcy protection in November, Reuters noted.
Chrysler also sued Magna International to recoup costs of a recall involving defective minivan heated seats, the report added.
