Chrysler, Plastech Dispute Ownership of Tools, Equipment

Dearborn, MI (AHN) - After ending a supply deal last month, Chrysler LLC and Plastech Engineered Products Inc. are now disputing ownership of tools and equipment used for making car components.

U.S. Bankruptcy Judge Phillip Shefferly will decide this week if Chrysler can repossess the assets or Plastech can retain possession of it.

The automaker wants to get the tooling, so it can transfer these to another supplier. However, Plastech wants to keep the tools and equipment, so it can continue operation and supply components to other carmakers.

The dispute arose on Feb. 1 when Chrysler decided to cancel orders from Plastech citing poor quality of parts supplied to the carmaker and the supplier's financial troubles. It asked Plastech to return the tooling on the same day.

Plastech filed for bankruptcy preventing Chrysler from repossessing the assets. The move forced five Chrysler plants to shut down for one day due to undelivered parts. The two firms agreed to continue the supply contract until Feb. 22.

Chrysler has asked the judge for permission to take the tooling. According to Detnews,com, Plastech claimed the carmaker does not own the tooling outright because the latter still owes it $13.4 million for the equipment and creditors are claiming rights to the property.