Chicago, Illinois -- Chrysler llc has cancelled its contract with plastic trim manufacturer Plastech Engineered Products Inc., because of a dispute over price increases.
According to Bob Nardelli, ceo of Chrysler, the company did not agree with Plastech's plans to raise prices.
"When we are confronted with a significant price increase, we have to respond in kind," he told Automotive News, Urethanes Technology International's sister publication, at the Chicago Auto Show.
As a result Chrysler, which has been blamed by some Plastech creditors for causing the supplier's Chapter 11 bankruptcy, seized its tools from Plastech's plants.
The two sides are now trying to negotiate a supply agreement and Plastech has resumed shipments to Chrysler temporarily until 15 Feb.
Plastech will receive financial help from Chrysler, Johnson Controls, and a couple of other Detroit car makers, who have agreed to contribute $23.4 million towards paying off Plastech's bills.