General Motors has spent millions of dollars developing and marketing its 2010
Chevrolet Camaro, which is scheduled to go into production in February. But the bankruptcy of an interior parts supplier is threatening to delay the pony car, which isn’t just bad news for GM, but could have a ripple effect on dealers and even other suppliers.
In an effort to prevent a delay of the new Camaro, GM has filed a lawsuit against Cadence Innovation LLC, accusing the company of “holding hostage” the parts it needs to put the car into production. The suit demands Cadence immediately hand over the parts and equipment required for a new supplier to take over. GM says it needs to have a new supplier in place by January 12th, or it will not be able to begin production of the Camaro on schedule.
“Even one day’s disruption in supply of certain component parts could cause a shutdown of GM assembly operations, disrupting not only GM’s business, but the operations of countless suppliers, dealers, customers and other stakeholders,” the lawsuit states.
As is typical of a supplier-automaker relationship, GM provided Cadence with machines to manufacture the interior parts it needs. Although automakers usually retain ownership of such equipment, it’s not unheard of that a defunct supplier will fail to return the machines and tools to said automaker. This was the case with Plastech, which refused to return equipment to
Chrysler several months ago.
It is not clear if Cadence — which entered Chapter 11 bankruptcy in August and Chapter 7 liquidation more recently — is behaving similarly to Plastech, or if the complexity of the bankruptcy process is to blame. In any case, GM literally can’t afford to have a product as important as the Camaro delayed, so this will be a very interesting case to follow in the coming days and weeks.
