Chrysler Group LLC has sued Daimler AG, accusing the German automaker of breaching its contracts which required Daimler to supply crucial parts. It was alleged that the production of key 2010 Chrysler vehicles was put in jeopardy. Chrysler said without the Daimler-supplied steering columns and torque converters it will be unable to produce several 2010 model-year vehicles, including the Chrysler 300 and the Jeep Grand Cherokee SUV. Chrysler filed the lawsuit in bankruptcy court in New York and is seeking damages from Daimler.
Chrysler emerged from Chapter 11 bankruptcy protection in June after the bulk of its assets were purchased by Italian automaker Fiat Group SpA. Most all of Chrysler’s liabilities were left behind and are being liquidated under court supervision. This lawsuit revolves around a dispute over payments for diesel engines supplied by Daimler. Chrysler accused Daimler of using the dispute as a basis for refusing to sign deliveries of steering columns and torque converters.
It was alleged that the “Chrysler Group believes Daimler’s effort to extort Chrysler Group into paying for costs for a diesel engine that Daimler agreed to forego a few months ago is a breach of its obligation to negotiate in good faith.” If deliveries of the parts stop, according to a Chrysler spokesman, it would affect production at its assembly plant in Brampton, Ontario, and its Jefferson North plant in Detroit. Daimler Chrysler’s lawsuit is “without merit,” Daimler said in a statement:
This is not a dispute about Chrysler’s rights to existing contracts … Rather Chrysler has been asking Daimler to change existing agreements and enter into completely new agreements.
As you most likely know, Daimler owned Chrysler for several years until it sold its stake to private-equity firm Cerberus Capital Management LP in 2007. It’s sort of ironic and a little sad to see Chrysler using the courts to its own advantage, but denying the same access to its customers who were sold vehicles with defects.
Source: Associated Press
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.