Chrysler sites online after supplier bankruptcy

05 February 2008 21:52  [Source: ICIS news]

HOUSTON (ICIS news)--US automobile maker Chrysler resumed on Tuesday operations at five plants that were entangled in the bankruptcy of a parts supplier, Plastech Engineered Products.

The plastic auto-parts supplier is a large consumer of chemicals, owing nearly $5m (€3.4m) to Dow Chemical, Basell, BASF and SABIC Innovative Plastics, according to bankruptcy documents.

Moreover, any plant shutdowns could affect other chemical companies, as automobiles are a key end market. Each vehicle contains an average of $2,440 in chemistry, according to the American Chemistry Council (ACC).

The five Chrysler plants relied on door panels, floor consoles, engine covers and other parts produced by Plastech, according to bankruptcy documents.

Problems started when Chrysler attempted to find a supplier to replace Plastech, which was having financial difficulties, according to accusations that Chrysler makes in bankruptcy documents.

Chrysler cancelled its contracts with Plastech and attempted to repossess tools that were in Plastech's plants, according to court documents.

Before Chrysler could repossess its tools, Plastech filed for bankruptcy, according to court documents. Chrysler was left without a supply contract and without the tools to make the parts.

On Monday, Chrysler closed four plants and dismissed the second shift at a fifth plant.

Operations resumed on Tuesday following an interim agreement reached with Plastech, Chrysler said in a statement.

The following lists the four largest chemical creditors in Plastech's bankruptcy.

Dow

Basell

BASF

SABIC

$1.57m

$1.40m

$1.02m

$970,000

($1.00 = €0.67)


By: Al Greenwood
+1 713 525 2645



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