Chrysler fills a lawsuit against former parent Daimler AG

Article by Christian A., on August 29, 2010

Crying extortion, Chrysler Group LLC has filed a lawsuit against former parent Daimler AG for refusing to honor contracts to supply components and thus threatening production at some Chrysler factories.

The lawsuit was filed on August 21 in the U.S. Bankruptcy Court in New York. Chrysler spokesman Gualberto Ranieri said that Daimler's actions are threatening to shut down Chrysler's manufacture of key product lines.

Responding to the lawsuit, Daimler spokeswoman Julia Engelhardt said that the claims are without merit.

The conflict originates from Daimler's claim that Chrysler owes it 55 million euros, or about $78.7 million at current exchange rates, to compensate for not buying as many 2.2-liter diesel engines as Chrysler said it would.

The diesel engine is used for European sales of models such as the PT Cruiser. In its complaint, Chrysler says the volume shortfall payment issue was resolved in an April 17, 2009, pre-petition agreement that settled a number of disputes between Daimler and the old Chrysler.

The complaint says Daimler is refusing to supply steering columns and torque converters in order to pressure Chrysler to make the volume-shortfall payment. Ranieri said that Daimler has moved to "extort a settlement by wrongfully withholding crucial parts" that Daimler has contractually committed to supply to Chrysler Group.

Being threatened are the production lines of the Grand Cherokee at the Jefferson North assembly plant in Detroit, as well as the Dodge Charger and Challenger and Chrysler 300/300C in Brampton, Ontario. Ranieri called Daimler's action a "direct violation" of the April 17 settlement agreement later approved by the Bankruptcy Court. Chrysler filed for Chapter 11 bankruptcy on April 30 and emerged under the control of Italy's Fiat S.p.A. on June 10.

If you liked the article, share on:

Comments

Recommended

Not so long ago, the 2018 Genesis G80 Sport made its debut at the 2016 LA Auto Show. But at that time, it did not have a price yet. And...
by - April 23, 2017
It seems like an increase in price has become a trend for automotive companies lately. Genesis isn’t alone when it comes to this. Subaru had just announced that the 2018...
by - April 23, 2017
Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries