Thousands of idled Chrysler workers in the Windsor area might return to their vehicle assembly jobs on Tuesday after an Ontario court ruling that requires a Wallaceburg parts plant to provide the automaker with enough inventory for 14 days of production.
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Workers at Chrysler plants in Windsor and Brampton began going home last Tuesday, following a price dispute between Chrysler and Transcast Precision, which makes transmission parts, the Windsor Star newspaper reported.
“We are very pleased with the court order, which fully supports our allegations,” Chrysler spokeswoman Mary Gauthier told the paper on Sunday. “This way, we will be able to get our plants back and running and get all of our Canadian workers back working.”
Chrysler last Thursday won a court order allowing the company to go into Transcast to retrieve its tooling and equipment but officials said when the automaker went in the next day it found that some of its equipment had been moved to at least six different locations in the province.
So Chrysler returned to court and won the second court order entitling it to all of its equipment and 14 days’ stock of parts, which it intends to collect on Monday.
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By GlobalDataChrysler now plans to manufacture the parts itself at its Etobicoke casting plant, the paper noted.
The superior court order – which also allows GM and parts makers Magna and Gates to collect two weeks’ supply of parts – contained harsh words for Transcast, according to the newspaper.
Superior court justice Alexandra Hoy wrote that Transcast sought “to be among the few parties who profit in the maelstrom in which the automotive industry finds itself.”
Through a series of recent corporate buyouts, Hoy wrote, Transcast attempted to charge Chrysler and others about 2-1/2 times what the car companies had negotiated to pay another parts company that originally took the order.
“It is clear that if (Chrysler, GM, Magna and Gates) permitted themselves to be held hostage in the manner in which Transcast has attempted, complete chaos in an already difficult sector could ensue,” she wrote.
“This matter calls into question the ability of this sector to continue to function outside of court protection.”
A union official told the paper about 4,000 of the 5,000 workers at Chrysler’s Windsor assembly plant were off work but receiving about 80% of their pay, thanks to short work week rules.
But most parts workers received no pay when their plants went down.
Another proceeding is required within the two week period to settle matters regarding ongoing price and supply, Transcast Precision said in a statement.
“If the North American auto industry intends to rebuild itself and emerge from our current recession, it must defend the rights of all business owners – especially the auto parts manufacturers who are being economically exploited,” president and director Dean Topolinski said.
“We are hopeful that the courts will recognise the established pricing and negotiations tactics that exist in market – ones predisposed to the unfair treatment of smaller auto parts manufacturers and suppliers that rely on relatively few, but very large customers.
“Transcast has regrettably been portrayed by Chrysler et al as a form of corporate raider seeking to take advantage of the OEMs in the current economic maelstrom in which the automotive industry finds itself. Transcast has had no opportunity to present its side of this story in the proceedings, which were commenced without notice to Transcast and while senior management were out of Canada.”
Transcast said it initiated contact with Chrysler last Monday (3o April) to sell existing company assets and to enter into an agreement that would permit the long-term viability of the new company. While the correspondence indicated that inventory would need to be purchased above previous prices, the increase was required to help offset a number of transition costs including legal bills and unpaid severance from the previous supplier.
“This price increase was for a five-day term only,” the supplier said. “The longer-term agreement was to be negotiated during this interim phase.
“Notwithstanding Transcast’s offer to negotiate, Chrysler, Magna, Gates and GM decided not to engage in discussions to come to a commercial solution to keep the plant open. Rather, they proceeded without notice to take Transcast to court to seek interim relief for the return of tooling and parts.
“When Transcast discovered the ex parte motions, they appeared in court and vigorously opposed the position presented by Chrysler, Magna, Gates and GM.
“Transcast will continue to argue its position in court by presenting the facts of the case which has yet to be finally argued. Any orders made by the court at this stage are interim only.”
The Windsor Star said the disputed parts had been supplied by Solus manufacturing, formerly owned by the Vannatter Group of Wallaceburg which was sold last week to Transcast Precision, also of Wallaceburg.
