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Chrysler says it sues supplier over plant financing
DETROIT, Oct 9 (Reuters) - Chrysler LLC [CBS.UL] has sued German auto supplier Getrag, saying the supplier failed to secure a pledged debt financing necessary to build a plant to produce fuel-saving transmissions for the U.S. automaker.
Chrysler and Getrag started building the $530 million plant in Tipton, Indiana, in May 2007 under an agreement reached in February that year.
The plant was scheduled to open in 2009 and manufacture fuel-saving dual-clutch transmissions, which would be purchased principally by Chrysler, Chrysler said in a statement on Thursday.
Chrysler said in court documents that Getrag had been obliged under the agreement to obtain debt financing and its failure to do so within the required time frame threw the project into uncertainty. The suit was filed with Oakland County Court in Michigan on Wednesday.
Chrysler is seeking damages for any delays and potential costs it might incur for changing transmission suppliers.
The company has also asked the court to relieve it of any reimbursement of costs already absorbed by Getrag.
Getrag representatives were not available to comment.
Getrag supplies dual-clutch transmissions for Chrysler's European lineup of the Dodge Journey crossover, the Dodge Avenger sedan and the Chrysler Sebring sedan. It has been designated as the automaker's only source of the transmissions in the U.S. market.
"Getrag misrepresented its ability and failed to use good faith efforts to secure financing to support the joint development," Chrysler said in a statement. (Reporting by Soyoung Kim)
