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Chrysler suing Magna over costs for minivan recall

DETROIT (Reuters) - U.S. automaker Chrysler LLC is suing Canadian auto parts maker Magna International Inc MGa.TO to recoup money it spent on a recall involving defective heated seats in minivans.

Frank Stronach, Magna International Inc. Chairman of the Board gestures during his speech at the annual general meeting of shareholders in Toronto, May 1, 2008 REUTERS/ Mike Cassese

Chrysler filed the lawsuit in Oakland County court in Michigan, near Chrysler’s headquarters, in February after exhausting all other option available “in the normal course of business,” Chrysler spokesman Mike Palese said on Tuesday.

He declined to reveal the amount Chrysler is seeking from Magna, but said it was a “significant amount.”

A lawyer for Magna did not immediately return a phone call seeking comment.

Chrysler recalled 161,500 1999-2001 model-year Dodge Grand Caravan and Chrysler Town & Country minivans in 2005 because of defective heated seats made by Magna.

The heating element in some of the seats overheated and burned through the fabric, Palese said.

“We are asking them to compensate us for the customer-service action,” he said.

Chrysler has had a long and fruitful association with Magna, which had been one of the bidders for the automaker when it was for sale last year.

Magna builds vehicles on contract for Chrysler in its Graz, Austria, plant.

The lawsuit comes as Chrysler is battling a sharp slide in U.S. market share amid record high gas prices. The automaker, owned by private equity group Cerberus Capital Management, is hurting from a slump in demand for trucks and SUVs.

The automaker lost $1.6 billion in 2007.

In sharp contrast, Magna ended 2007 with one of the strongest balance sheets in the industry and net cash of $2.2 billion.

Reporting by Poornima Gupta; Editing by Brian Moss

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