GM seeks to seize tooling from bankrupt supplier
DETROIT (Reuters) - General Motors Corp GM.N has asked for court approval to seize tools from bankrupt auto parts maker Progressive Molded Products Inc, citing a potential for supply disruptions that could force the carmaker to shut its assembly lines.
Progressive, which filed for bankruptcy protection in Delaware on June 20, may not be able to maintain operations after Monday, GM said in court documents seeking authority to take tools.
The privately held Ontario, Canada-based supplier was unable to reach agreements with creditors to restructure its debt before filing for protection. About 90 percent of its $470 million revenue in 2007 came from GM, Ford Motor Co (F.N) and Chrysler LLC CBS.UL.
"The tooling is essential to ensuring the production of the component parts GM's assembly lines depend on," GM said in court papers, describing the company as a "single-source" supplier. "Debtors' financial condition and lack of adequate financing endangers that production," it said.
No hearing has been scheduled yet on GM's request. Representatives of GM and the parts supplier could not be reached immediately for comment.
The legal skirmish parallels an earlier dispute between Chrysler and parts maker Plastech Engineered Products Inc.
Chrysler sought court authority to seize tools from Plastech in a dispute that briefly shut five of the No. 3 U.S.-based automaker's U.S. plants in early 2008. That request was denied.
Progressive makes modules, panels and other plastics-based components for trucks, SUVs, crossovers, minivans and cars. It has about 2,800 employees.
It is the latest among auto parts suppliers thrown into bankruptcy in recent years amid rising commodity prices and production cutbacks by the struggling U.S. automakers.
(Reporting by Soyoung Kim; Editing by Braden Reddall)
