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Chrysler idles four plants after supplier goes bankrupt
UPDATE: Automotive News is reporting that all 14 of Chrysler's manufacturing plants could be shut down to the Chapter 11 bankruptcy filing of ex-supplier Plastech.
Plastech supplied components like interior trim, engine covers, moldings, door panels, and floor consoles to Chrysler, Ford, GM, and Toyota. The company employed 7,600 people in the US and Canada, and had 2007 sales of $1.4 billion -- including a contract with Chrysler alone that was worth $200 million. Yet due to the rise in the cost of raw materials and lower consumer demand, the company, along with others like it in the past few years, was forced to declare bankruptcy last week.
Chrysler terminated its contract with Plastech last Friday, and is now forced to idle four plants and eliminate an entire shift at another plant while it secures a new supplier. The move sends 10,500 Chrysler employees home. Chrysler hasn't said when it expects those plants to be open again, but workers will find out from plant managers or notices in local media when it happens. So far, no other company supplied by Plastech has indicated it will be slowing down operations.
[Source: USA Today]
Reader Comments (Page 1 of 2)
sw 3:11PM (2/04/2008)
It almost seems as if it has nothing to do with Plastech going bankrupt. Given that other manufacturers are continuing. I think the Chrysler itself isn't moving as much product as they don't have a "hot" car on the lot.
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Alex 3:12PM (2/04/2008)
maybe now will be a good time for Chrysler to tweak their horrible interiors on their current models. i know they can't do a redesign, but at least use better plastics.
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John Johnson 3:19PM (2/04/2008)
+1
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LBuzzer 3:23PM (2/04/2008)
+2
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meshies 3:43PM (2/04/2008)
+3
First thought that came to my head. Too bad it isnt that easy.
tankd0g 3:34PM (2/04/2008)
"Plastech", with a name that clever how could they ever go wrong?
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MemphisNET 3:41PM (2/04/2008)
Sign with whoever is making GM's interiors
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lilmule 4:09PM (2/04/2008)
ALL PLASTIC IS CHEAP! There is nothing that can be injection molded and come out of the mold feeling luxurious. Chrysler, Ford, and GM all use the same suppliers for their interiors, it depends on the $$$.
Plastech filed for Chapter 11 to protect the Chrysler business that they have. Chrysler cancelled all of their contracts and was en route to pull all of the tools from Plastech on Friday afternoon. This would force the OEMs to pay additional $$$ to maintain the flow of parts...GM and Ford paid. Chrysler doesn't want to...
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Talis 4:31PM (2/04/2008)
Wow. Calm down a little. It is not uncommon, however unfortunate, for a company with contracts in flux to drop supplier after said supplier files Chapter 11. Chrysler LLC is trying to protect its very shaky business interests. This is probably one of the worst things that can happen to Chrysler in the past few months.
I cannot imagine what this will do to Chrysler's overall portfolio in the next few years. Remember that a company as big as Chrysler cannot move with the same agility as a company the size as say Tata.
Kowell 4:14PM (2/04/2008)
Maybe now Chrysler will have to turn to a supplyer with more quality materials....
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John 4:43PM (2/04/2008)
Suppliers usually push OEMs for better quality materials. Its higher margin business plus the end product looks better which is better for their rep. In the end, they are at the mercy of the OEM bean counters so its not their fault.
Jay 4:32PM (2/04/2008)
Uhhh yea...
Using the same machines, same dies, and the same plastics as per spec by Chrysler.
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sw 5:19PM (2/04/2008)
What? Tata's a HUGE company, much bigger than Chrysler. Tata is worth 22.8 Billion US$, Chrysler was sold to Cerebrus for 7.4 Billion US$
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sw 5:19PM (2/04/2008)
was @ talis, but reply button does not work.
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Richard 7:20PM (2/04/2008)
The Chrysler Death Watch continues....
.....over to you RF.
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John 8:33PM (2/04/2008)
I agree with sw. It sounds as though Chrysler's sales ares are in the tank, and they may have too much inventory on their lots. How could it be that Chrysler had a two hundred million contract with this company and did not know it was in trouble?
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steveo391 11:28PM (2/04/2008)
I live in a town that had a plastech plant, I have close friends and family who used to work their. With the plant closing the town I live in will pretty much have no quality jobs left. Thanks to all you dumb f***s who buy toyota's
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j_diesel 7:20AM (2/05/2008)
i'm no fan of toyota but...you did read the part at the beginning of the article where it said toyota is one of the companies that buys product from them, right?
WowNasty 3:21AM (2/05/2008)
I can't really blame anyone for not buying a Chrysler, so it's not a problem for me, blame Chrysler, their ENTIRE! line up is composed of garbage.
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steveo391 9:36AM (2/05/2008)
haha oops, still doesn't change what I think about toyota though
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