Magna could take business from bankrupt Chrysler supplier: report
Aurora, Ont.-based Magna International Inc. may take on the bulk of $200 million in work away from a bankrupt suppl...
February 18, 2008 by Canadian Plastics
Citing internal planning documents from the OEM, Bloomberg said Chrysler hopes to move proprietary molds and dies for 121 plastic parts from Plastech Engineered Products Inc., a company that filed for bankruptcy earlier this year.
Earlier this month we told you that the Plastech bankruptcy had forced Chrysler to temporarily close four assembly plants and reduce one shift at another plant. Plastech makes 360 parts for the OEM, which caused a significant strain on Chrysler’s supply chain after the company went under.
Bloomberg’s report also speculated that Magna would charge a higher price for the parts than Plastech, leveraging its relative financial stability.
“Magna becomes the obvious choice here because they have had a long-term very good relationship with Chrysler,” said CSM Worldwide Inc. analyst James Gillette. “It would be hard for me to believe that Magna is doing it at the same price that Plastech was doing it.”
A U.S. bankruptcy judge is expected to announce his decision on whether Chrysler can redirect its tooling this week. Both sides have refused to comment on the speculation in the media reports.