February 14, 2008 -- Ford, General Motors (GM) and Johnson Controls (JCI) have lined up with Chrysler in its dispute with Plastech Engineering as it attempts to retrieve tooling from the Chapter 11 bankrupt supplier. Lawyers representing the firms voiced their support at a bankruptcy court hearing where Chrysler is trying to retrieve tooling and sever business ties with the supplier of plastic trim parts. Plastech stopped supplying parts to the automaker last week as the long running tensions came to a head causing Chrysler to halt production at a number of plants.  Significance: Plastech's future looks increasingly bleak as the OEMs and other suppliers line up against the stricken trim supplier. The view of the bankruptcy court will be crucial, if it sides with the OEMs, whom have twice participated in bailout agreements over the past year, Plastech will be liquidated and the OEMs should be able to retrieve their tooling.

If the court tries to preserve the business, Chrysler, GM and Ford could all face new contract terms and some difficult relationships given what has come to pass this month. Plastech's case appears thin, however, as Chrysler contributed US$10.7 million to help bail out Plastech in January, only to be told a few days later it needed more money to survive.

Source: Global Insight Daily Analysis