Chrysler Cost Cutting (illegally?)
Chrysler seems to be using slashed production numbers as a way to skimp out on the engineering and development costs of suppliers. It also is accused of pulling a US Government and taking the designs of on supplier and passing them on to a cheaper (in this case Chinese) supplier. I suppose it is what you get with a bunch of hedgies calling the shots, but (even without the lawsuit) the moral of the story is they will be completely screwed in the long term.
Full article from autoblog:
It seems like all the news coming out about Chrysler these days is of the bad variety and today is no different. The ailing automaker has just been sued by one of its suppliers, Faurecia Interior Systems Inc. of Auburn Hills to the tune of $110 million. Faurecia currently provides interior systems like center consoles, instrument panels and door panels for the PT Cruiser, Chrysler Sebring (at right), Dodge Avenger, Jeep Liberty and Dodge Nitro.
Faurecia is claiming that Chrysler hasn't paid their tab for some up-front costs related to a bunch of engineering, research and development work that the supplier completed on their behalf. The lawsuit states that Chrysler agreed to cover these costs by paying a set per-piece fee, based on the expected quantity sold over the life of the systems. When Chrysler slashed production on the affected models, Faurecia asked for more money per item to recoup those costs in full, but they say Chrysler denied their claim. If that isn't bad enough, Faurecia even claims that Chrysler turned the system plans over to some Chinese firms to fill additional orders for similar models in their lineup. Chrysler hasn't had a chance to respond to these charges, but you can bet this fight won't be pretty.
Full article from autoblog:
It seems like all the news coming out about Chrysler these days is of the bad variety and today is no different. The ailing automaker has just been sued by one of its suppliers, Faurecia Interior Systems Inc. of Auburn Hills to the tune of $110 million. Faurecia currently provides interior systems like center consoles, instrument panels and door panels for the PT Cruiser, Chrysler Sebring (at right), Dodge Avenger, Jeep Liberty and Dodge Nitro.
Faurecia is claiming that Chrysler hasn't paid their tab for some up-front costs related to a bunch of engineering, research and development work that the supplier completed on their behalf. The lawsuit states that Chrysler agreed to cover these costs by paying a set per-piece fee, based on the expected quantity sold over the life of the systems. When Chrysler slashed production on the affected models, Faurecia asked for more money per item to recoup those costs in full, but they say Chrysler denied their claim. If that isn't bad enough, Faurecia even claims that Chrysler turned the system plans over to some Chinese firms to fill additional orders for similar models in their lineup. Chrysler hasn't had a chance to respond to these charges, but you can bet this fight won't be pretty.
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