Chrysler closing 4 assembly plants after Plastech bankruptcy

Chrysler LLC has had to shut down four plants today, as it deals with the bankruptcy filing of Dearborn-based auto supplier Plastech Engineered Products Inc.

Plastech filed for Chapter 11 bankruptcy protection Friday night, after Chrysler said it would terminate its business with the supplier company, which has been undergoing financial trouble amid rising oil prices.

In 2006, the private company posted losses of $73 million on sales of more than $1 billion, nearly tripling its losses in 2005. Plastech has 35 plants.

The affected Chrysler plants are in Sterling Heights; Newark, Del.; Toledo, Ohio; and Belvidere, Ill. A second Toledo plant will also be shut down.

The idling has affected 10,500 workers, said Chrysler spokeswoman Michele Tinson.
Tinson said the plants have been temporarily shut down due to a parts shortage.
“These actions are to ensure the highest levels of quality,” she said. “The delayed volume will be rescheduled in the near future.”

The bankruptcy filing followed a stand-off between Chrysler and Plastech. On Friday, the automaker filed a restraining order to seize the tooling Plastech uses to make parts for nearly every vehicle Chrysler produces. Chrysler representatives went to some of Plastech’s plants demanding the molds, dies and other tools used to make the parts

As these teams of Chrysler representatives were entering Plastech’s plants Friday evening, the supplier filed its Chapter 11 petition, which stays all legal action against the supplier, according to legal documents filed by Chrysler.

In a court filing over the weekend, Chrysler said it had to close one plant and eight additional plants would likely shut down due to Plastech’s bankruptcy.