Chrysler Windsor plant set for restart after court steps in on parts dispute

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TORONTO - Workers at Chrysler's minivan plant in Windsor, Ont., were scheduled to go back to work Monday night after a court order forced a supplier to sell 14 days worth of parts at a lower price than it had been asking.
The dispute between Chrysler Canada and Transcast Precision forced the shutdown of both of the automaker's Canadian assembly plants. The plant in Windsor stopped production Tuesday night while the company's Brampton, Ont., facility closed Thursday because of a shortage of die-cast aluminum engine and transmission mounts.
The parts were originally manufactured for Chrysler by Vannatter Group at a plant near Windsor, but Transcast recently bought the plant from one of Vannatter's creditors.
The parts supplier said it would sell two weeks worth of inventory already produced by Vannatter to Chrysler and other customers including General Motors Canada, Magna International (TSX:MG.A) and Gates Corp., but ''only if they purchase the entire inventory of parts at prices roughly 2 1/2 times those agreed to by Vannatter,'' according to the decision issued by Ontario Superior Court Justice Alexandra Hoy.
Chrysler refused and took the matter to court, where Hoy ruled against Transcast.
''It is clear that if the moving parties permitted themselves to be held hostage in the manner in which Transcast has attempted, complete chaos in an already difficult sector would ensue,'' Hoy wrote in her decision.
She added that the spat ''calls into question the ability of this sector to continue to function outside of court protection.''
Chrysler also secured a court order allowing it to move the tooling, which it owns, from the Transcast plant to its casting plant in Toronto so it could begin production of the parts there, but said late Friday that Transcast had taken some of the tooling to at least six different ''unknown sites.''
''The actions of Transcast are creating disruptions across the auto industry that affect Chrysler, its workers, its suppliers and their employees, as well as other major automotive companies with U.S. and Canadian operations,'' Chrysler said in a statement.
But Transcast president Dean Topolinski said Monday his company was simply trying to cover its transition costs and insisted Chrysler has wasted millions of dollars by shutting down its plants, taking the matter to court and potentially moving production of the parts to its Toronto facility, where workers are paid approximately five times as much as Transcast's employees.
Another court hearing is required within two weeks to settle matters regarding ongoing price and supply.
Last week, suppliers said the dispute is one more indication that the parts industry needs immediate government aid.
But Ontario Premier Dalton McGuinty said Monday there will be no separate aid package for the auto parts sector from the province.
He said any direct loans for the parts suppliers will come from Ottawa's Export Development Corp., while the province is willing to help indirectly by putting conditions on its overall aid package to automakers.
One of the conditions of planned loans to General Motors and Chrysler will be that the car companies must pay their suppliers, McGuinty said.
The federal and Ontario governments have agreed to extend $4 billion in stop-gap funding for GM and Chrysler's Canadian arms, but have offered little to the suppliers.

Organizations: General Motors Canada, Vannatter Group, Magna International TSX Gates Ontario Superior Court Justice Alexandra Hoy Export Development

Geographic location: TORONTO, Windsor, Brampton Ontario U.S. Ottawa

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