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Plastech, component maker for Chrysler, seeks bankruptcy protection
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DEARBORN, Mich., February 19, 2008/ DiversityBusiness.com --Chrysler LLC has asked a bankruptcy judge in Detroit to secure permission to retrieve tools and equipment from a troubled component maker.
The judge could decide this week whether Plastech Engineered Products Inc. has to comply with Chrysler's request, the Detroit News reported.
Plastech is seeking bankruptcy protection in the wake of Chrysler canceling $190 million worth of contracts with components-maker Plastech in January. Plastech had asked for financial aid for the third time in a year, triggering the auto company's move, the News said.
Industry analysts said Plastech, with $1.3 billion in annual sales, is vulnerable because so much of its business is dependent on automotive companies. Plastech has a small customer base, marginal cash reserves and no stock to sell, the report said.
Automakers have committed themselves to working with minority-owned companies, such as Plastech, but Chrysler's management is going to bring more hard-nose business decisions to its suppliers," John Henke, president of a consulting firm in Birmingham, Mich., told the News.
Chrysler's senior manager for diversity supplier development Jethro Joseph, said the industry is facing tough times. "With the entire automotive industry facing tough economic challenges, Chrysler has never wavered in its commitment for diversity supplier development," he said in the Detroit News article.
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