Welcome to Foundry Management & Technology Sign in | Join | Help
in Search

REB Blog

Life and times in the world of metalcasting, and in the rest of the world, too.

See you in court

It was not any sort of clairvoyance that led me to warn about the supply-chain dissolution that is happening as a result of the automakers’ collapse. That this would happen was pretty obvious.

Watching it all come apart is discouraging, to be sure. Now, however, we can see that we won’t be able to close the book and move on: we’ll have to watch it all play out in court.

American Axle, which produces forged crankshafts and other drivetrain components for cars and trucks, is in court trying to force a steelmaker to continue supplying it with the raw materials they had contracted together.

Some readers may remember another case, in which Chrysler tried to get a Canadian court to force Transcast Precision Inc. to supply it with parts, whether or not a payment was made.

There are probably hundreds of these examples, and many more to come. I’m not suggesting it’s surprising, because modern life is so litigious that these developments are ordinary. And, I’m not suggesting that it’s outrageous, because the people pursuing these cases are trying to hold on to whatever assets and resources they have.

If there is something to be outraged over it is that the some of the biggest culprits in this debacle are the OEMs that have been roped off from liability by a convenient, custom-built bankruptcy program. The rest of the companies in the automotive supply chain are forced to draw blood and treasure from each other to save themselves.

For all the idealistic talk about remaking itself and developing new business models, the auto industry today is spending an unfortunate amount of effort and energy keeping alive bits and pieces of the past.

Published Thursday, June 18, 2009 5:04 PM by REB

Comments

No Comments
Anonymous comments are disabled