Chrysler and Plastech reach interim deal

By Nick Carey and Ben Klayman

Gregg Galardi, speaking at a hearing in U.S. Bankruptcy Court in Detroit, told the judge a deal has been reached that runs through February 15.

"We have made significant progress in a number of areas," said Galardi, who was flanked by Chrysler attorney Michael Hammer.

"Some are happy, some are not so happy," but all parties had agreed to it, he said.

A hearing has been scheduled for February 13 for arguments on whether Chrysler can seize tooling equipment at Plastech plants that the automaker says it owns. Plastech says ownership of the equipment is in question and that its removal would affect other customers.

What the future holds for Plastech probably depends on its other customers as Chrysler likely will look ultimately to shift that work to a different supplier, Fitch Ratings analyst Mark Oline said.

Plastech's other customers include General Motors Corp , Ford Motor Co and Toyota Motor Corp <7203.T> -- all of which had said they were not affected by the dispute and bankruptcy -- as well as Johnson Controls Inc .

Chrysler's plants operate on a "just-in-time" basis, under which parts are shipped as needed, so any disruption of supplies is felt immediately.

The idled Chrysler plants are located in Rockford, Illinois; Newark, Delaware; Sterling Heights, Michigan; and Toledo, Ohio. A supplier park in Toledo -- a cluster of several auto parts suppliers in one location -- also had been affected.

It had hired Conway, MacKenzie & Dunleavy as financial advisers and Lazard Freres & Co LLC as investment bankers to explore options, including the sale of some or all of its business, according to court documents.