In a move to safeguard production, General Motors Corp. has asked a U.S. bankruptcy judge for permission to seize tooling from Plastech Engineered Products Inc. GM wants access to the tooling in the event that the troubled supplier fails to deliver parts to GM.
GM said ``the limited amount and duration'' of Plastech's interim financing was a source of uncertainty about Plastech's continued ability to deliver plastic parts to the automaker, according to U.S. Bankruptcy Court documents filed in Detroit on March 12. GM also said Plastech told the automaker it plans to close four plants that make parts for GM.
GM said a failure to receive necessary parts from Plastech would result in ``disruptions to assembly lines within hours, which would be followed by layoffs and substantial damages.''
Dearborn, Mich.-based Plastech filed for Chapter 11 protection Feb. 1.
U.S Bankruptcy Judge Phillip Shefferly blocked a similar attempt by Chrysler LLC last month. Chrysler had sought to take all tooling used to make parts for its vehicles out of Plastech's injection molding factories and move production to other suppliers.
Shefferly wrote in his ruling that the bankruptcy protection sought by Plastech protects the supplier from such an action while the company is in the early stages of Chapter 11 reorganization.
Shefferly said Plastech's chances for reorganization would be put in jeopardy and would outweigh the damage done to Chrysler if the automaker could not take the tooling.
Chrysler is appealing Shefferly's decision.
GM's filing differs from Chrysler's in that it does not seek immediate possession of the tooling. Instead, it wants the ability to seize the tooling if Plastech fails to make timely delivery of parts to GM factories.