Canadian Idle: Two Chrysler plants shut down over supplier dispute
Chrysler was forced to shut down two Ontario plants as the facilities ran out of diecast aluminum engine and transmission mounts. The Brampton plant, which produces the Chrysler 300, Dodge Challenger and Charger closed on Thursday and the Windsor minivan facility closed on Wednesday. The facilities will remain idle until the Pentastar can get the parts flowing again. Chrysler released a statement saying that if the parts shortage continues, other North American facilities may be affected.
The supplier in question, Trans Cast, recently purchased the engine and transmission mounts facility and demanded more money for the parts. Bloomberg is reporting that Chrysler has gotten a court order to get the tooling equipment from the supplier so they could produce the parts themselves. Once Chrysler receives the tooling, it intends to produce the mounts at a plant in Etobicoke, Ontario.
What isn't clear so far is whether Chrysler was behind on payments with Trans Cast. But since Trans Cast purchased the plant out of foreclosure very recently, it's unlikely that Chrysler would be in the hole with the new owners. What isn't in question is Chrysler's prodigious cash crunch. Chrysler has just recently received a $250 million Canadian dollar loan from the Canadian government just to keep plants open. The Auburn Hills, MI automaker has also asked for $6 billion in financial aid from the U.S. government, in addition to the $2-3 billion requested from the Canadians.
[Sources: New York Times; Bloomberg]
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