Injection molder Core Systems strikes back at Whirlpool

By Michael Lauzon
Correspondent

Published: February 8, 2013 1:15 pm ET
Updated: February 8, 2013 1:36 pm ET

Related to this story

Topics Appliances, Injection Molding, Molds/Tooling, Legal, Injection molds

PAINESVILLE, OHIO -- Custom injection molder Core Systems LLC has countersued Whirlpool Corp., whose Jan. 24 lawsuit claims Core breached contract.

Core injection molded about 250 parts for Whirlpool plants in Findlay, Clyde, Marion and Greenville, Ohio, before Whirl­pool terminated its services Jan. 24. The loss of that business forced Core to close its Mount Gilead, Ohio, plant.

The fates of Mount Gilead and of Core's headquarters plant in Paines­ville, Ohio, are still being discussed, according to Core counsel Philip Oliss of Cleveland.

Core has returned all of the relevant Whirlpool tooling, Oliss said in a telephone interview.

In the past five years, Whirl­pool business has accounted for about $150 million in sales for Core, which had total sales of $47 million for its fiscal year ended Sept. 30.

In a Feb. 3 response to Whirl­pool's complaint filing to the court, Core denies most of Whirlpool's allegations and says that, in some cases, it could not meet obligations because Whirl­pool interfered with Core and misinterpreted the two parties' agreements.

A key issue in Core's countersuit is a performance improvement plan, agreed to Jan. 11, in which Whirlpool gave Core until March 28 to achieve certain milestones, according to Core. Core said it was coerced into signing the one-side agreement.

In any event, without notice, Whirlpool informed Core it would re-source components and demanded same-day access to Core facilities to reclaim tooling. Core alleges that, at about the same time, Whirlpool cut off a payment system in which Core could quickly sell accounts receivable within 15 days to receive immediate cash. Without that system, Core and its secured lenders were dealing with "tainted" collateral, and Core's relationship with those lenders was jeopardized, according to the molder.

A Jan. 28 interim court order requested Whirlpool pay for manufactured parts and negotiate on economic issues. Core said Whirlpool reneged on that order and offered to buy the parts at 40 percent of the contract price.

On Feb. 3 Whirlpool stopped buying finished parts and refused to compensate Core for raw materials bought for Whirlpool programs.

Core alleges Whirlpool owes it more $4.5 million for finished parts and dedicated raw materials, and it is seeking unspecified damages through the courts. Of that amount, $1.3 million was owed to raw materials suppliers Jan. 21; at that time Core had only $11,000 in cash.

When Core asked Whirlpool to provide it with $250,000 and $900,000 in revolving financing, Whirlpool declined.

Whirlpool, which had complained of delivery and quality problems and competitiveness, had hoped the performance plan would solve those problems.

Core's Feb. 3 filing brings several counts against Whirlpool, including breach of contract for purchasing orders and the performance improvement plan, negotiating in bad faith, interference with Core's accounts receivable system, unjust enrichment and broken promises.

Core is asking for an award of damages and fees to be decided at trial. The case is scheduled for trial by jury May 22, presided over by U.S. District Judge Donald C. Nugent.

Both parties have declined interviews to discuss the status of the tooling and of Core's plants.


Comments

Injection molder Core Systems strikes back at Whirlpool

By Michael Lauzon
Correspondent

Published: February 8, 2013 1:15 pm ET
Updated: February 8, 2013 1:36 pm ET

Post Your Comments


Back to story


More stories

Image

Small is beautiful in Nissei's newest press

November 21, 2014 2:14 pm ET

Responding to customer demand for flexibility, Japanese plastics-equipment manufacturer Nissei Plastic Industrial Co. Ltd. is demoing a caster-...    More

Image

Three advancements have driven injection molding technology

November 21, 2014 6:00 am ET

Injection molding technology has made major advances in the last 25 years, from largely a world of shoot-and-ship to doing as much as possible at the ...    More

Image

Netstal, Electra Form team up for PET preform partnership

November 20, 2014 3:15 pm ET

The Netstal division of Krauss-Maffei Corp. is teaming up with Electra Form Industries in a partnership to offer PET preform machines and molds as a...    More

Image

Thomson Plastics opens N.C. plant

November 20, 2014 3:12 pm ET

Custom injection molder Thomson Plastics Inc. has opened a new manufacturing facility in Lexington, N.C.    More

Image

Molder Carclo expands in China, chasing medical growth

November 19, 2014 3:44 pm ET

U.K.-based injection molder Carclo plc is “significantly” expanding its Chinese medical manufacturing capacity with a new factory, as the ...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events