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Old 12-27-2008, 04:36 PM   #1
Hazdaz
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Default GM Sues Camaro Supplier, Claims "Holding Hostage" Equipment Necessary for Launch

http://jalopnik.com/5118766/gm-sues-...ary-for-launch

GM Sues Camaro Supplier, Claims Cadence "Holding Hostage" Interior Equipment Necessary For Launch


Quote:
Liquidation of now-bankrupt Camaro parts supplier Cadence could delay 2010 Chevy Camaro production, costing GM millions of dollars and delaying a crucial new model. So GM plans to sue them.

"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," states GM’s lawsuit.


The automaker is suing Cadence for immediate access to parts it needs to produce the new Camaro. GM argues that a delay in delivery could could hamper the launch of the vehicle by causing a ripple-effect of delays, ultimately setting the vehicle’s production schedule back significantly.
GM’s lawsuit claims Cadence is “holding hostage” parts and equipment it for Camaro production.


The automaker is already stretched to the limit, kept alive only by its share of the $17.4 billion auto industry bailout. The Camaro is its headline new product for 2009 and any delay would cost GM millions and cause it publicly to lose face during a critical period.


Cadence, which manufactures airbags, consoles and other parts, was named GM’s supplier of the year in 2006. It filed for Chapter 11 two years later, proving the Carpocalypse is hard on everyone and GM really knows how to pick a winner.
GM hopes to have a new supplier manufacturing the parts it needs by January 12.
I posted this link less for the story itself, and more because if GM or Chrysler are allowed to file for bankruptcy, this type of news story is going to become even more commonplace than it is today.

There are already countless suppliers that are on the brink of going belly-up. If GM or Chrysler are allowed to file for bankruptcy, these suppliers are going to receive pennies-on-the-dollar from GM or Chrysler for what they are truly owed and thus they in turn will go under... creating the domino effect that most people fear, and effecting the entire auto industry because many of these suppliers also do work for more than just one car maker.
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Old 12-27-2008, 04:44 PM   #2
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well ****... they went bankrupt lol
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Old 12-27-2008, 06:31 PM   #3
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Its not like GM was blowing anyone away with amazing interior fit and finish anyway. Its probably for the best.
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Old 12-27-2008, 08:30 PM   #4
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^^^ stupid much
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Old 12-27-2008, 09:48 PM   #5
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lol, way i see it is:

GM sues cadence ----> wins ----> cadence goes out of business totally ---> GM loses ----> camero never comes out
-or-
GM sues cadence ----> loses ----> cadence gets paid little for parts ----> goes out of buisness ----> camero never comes out
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Old 12-28-2008, 12:46 AM   #6
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Quote:
Originally Posted by rallydriverosix View Post
lol, way i see it is:

GM sues cadence ----> wins ----> cadence goes out of business totally ---> GM loses ----> camero never comes out
-or-
GM sues cadence ----> loses ----> cadence gets paid little for parts ----> goes out of buisness ----> camero never comes out
incorrect.

GM sues Cadence to turn over tooling. GM takes tooling gives it to another interior manufacturer (Lear, or Johnson controls) and life goes on.
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Old 12-28-2008, 02:46 PM   #7
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Unhappy Cadence-My biggest customer

Cadence makes parts for the entire Lambda fleet of cross-over SUV's as well. This will impact more than just the Camaro.

Also, the cost involved in changing suppliers for this many part numbers is immense. This decision will be costly for GM and likely the end of Cadence Innovation which was ironically born from the ashes of bankrupt supplier Venture Industries and headed-up by Jerry Mosingo.

Thanks for the business over the years guys
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Old 12-28-2008, 02:52 PM   #8
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Just curious, had they never heard of NOT putting all their eggs in one basket?
(unsubscribes before someone says some smartass comment regarding the above)
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Old 12-28-2008, 03:19 PM   #9
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Are you referring to GM or Cadence? It could be looked at either way.

I also believe that there is more at stake here than just the Camaro launch though that is the purpose of the article. GM most likely owes Cadence much for parts already sold and shipped plus molds, secondary tooling, assembly equipment, etc. It's not quite as cut and dried as the article states.
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Old 12-28-2008, 03:24 PM   #10
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Quote:
Originally Posted by wawazat View Post
Cadence makes parts for the entire Lambda fleet of cross-over SUV's as well. This will impact more than just the Camaro.

Also, the cost involved in changing suppliers for this many part numbers is immense. This decision will be costly for GM and likely the end of Cadence Innovation which was ironically born from the ashes of bankrupt supplier Venture Industries and headed-up by Jerry Mosingo.

Thanks for the business over the years guys
you ever hear of plastech?
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Old 12-28-2008, 04:25 PM   #11
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Lots and lots of companies named Plastech. Do you mean Julie Brown's Plastech? The company that also went away this year?
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Old 12-28-2008, 05:20 PM   #12
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Quote:
Originally Posted by wawazat View Post
Are you referring to GM or Cadence?
Clearly I think he is referring to the fact that GM had but one supplier with tooling for some of their models. Perhaps more-so that they didn't have an agreement in place to keep control of the tooling.
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Old 12-28-2008, 06:18 PM   #13
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Injection molds (plastic injection molded parts is what Cadence makes for GM and others) for these interior trim parts are too costly for the OEM to make multiples of. Especially considering the annual production volumes of a smaller production number vehicle like the Camaro. I would assume that if GM paid all open invoices to Cadence for parts already supplied to GM that they would have no issues with releasing the Camaro tools.

It is not unheard of for companies to produce plastic parts for the auto industry where the supplier owns the molds/tooling reducing the initial cost to the OEM as the molds/tooling costs are amortized over the production run of parts. It requires deeper pockets on the part of the suuplier.
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Old 12-28-2008, 06:47 PM   #14
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Quote:
Originally Posted by wawazat View Post
Injection molds (plastic injection molded parts is what Cadence makes for GM and others) for these interior trim parts are too costly for the OEM to make multiples of. Especially considering the annual production volumes of a smaller production number vehicle like the Camaro. I would assume that if GM paid all open invoices to Cadence for parts already supplied to GM that they would have no issues with releasing the Camaro tools.

It is not unheard of for companies to produce plastic parts for the auto industry where the supplier owns the molds/tooling reducing the initial cost to the OEM as the molds/tooling costs are amortized over the production run of parts. It requires deeper pockets on the part of the suuplier.
That is common in many industries. Still does not explain why there wasn't an agreement in place for just this occurrence. There is certainly an identifiable risk there....and I'm pretty sure the General has enough lawyers sitting around such that the risk did not go unnoticed.

My biggest problem: WTF is Cadence going to do with all that tooling? Absolutely nothing. So why in the world wouldn't they sell it to GM? Let alone give it away.

You would think you wouldn't need lawyers for this type of things, that gentlemen would rule the day. Fat chance.


Further, you think GM filed suit with outstanding bills owed to Cadence? Not thinking that is too likely.
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Old 12-28-2008, 09:18 PM   #15
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Quote:
Originally Posted by REX8 View Post
That is common in many industries. Still does not explain why there wasn't an agreement in place for just this occurrence. There is certainly an identifiable risk there....and I'm pretty sure the General has enough lawyers sitting around such that the risk did not go unnoticed.

My biggest problem: WTF is Cadence going to do with all that tooling? Absolutely nothing. So why in the world wouldn't they sell it to GM? Let alone give it away.

You would think you wouldn't need lawyers for this type of things, that gentlemen would rule the day. Fat chance.


Further, you think GM filed suit with outstanding bills owed to Cadence? Not thinking that is too likely.
i think that is highly likely. according to thetruthaboutcars.com GM has been pushing payments on suppliers back to 90 days, up from their usual lax "30 days".
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Old 12-28-2008, 09:36 PM   #16
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Quote:
Originally Posted by shikataganai View Post
i think that is highly likely. according to thetruthaboutcars.com GM has been pushing payments on suppliers back to 90 days, up from their usual lax "30 days".
But certainly not to those they are suing. In all likelihood, they would have paid back bills before they even filed the thing.
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Old 12-28-2008, 09:42 PM   #17
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Default Camaro delayed? Late or never? LOL!

What a riot. When Ford rolled out the retro Mustang, Chevrolet should have been rolling out the 1969 Camaro retro. If the two automakers had any sense maybe marketing would have worked together to get some passion back in the buyers of these cars like during the Trans Am wars.

GM is TOO LITTLE TOO LATE. I can't even figure out what the hell the "new Camaro" is even suppose to be. 67.68.69?

I was NOT an import person at all but now only own Subaru vehicles. Never thought these days would come.
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Old 12-28-2008, 09:57 PM   #18
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Originally Posted by wawazat View Post
I would assume that if GM paid all open invoices to Cadence for parts already supplied to GM that they would have no issues with releasing the Camaro tools.

So you think that GM decided to spend what will be millions of dollars on a law suit on the CHANCE of getting the tooling (which they don't own), instead of paying a few months back invoices. And moreover, that they would go into a lawsuit asking for the property of someone they owe money to?

Come on now, that makes absolutely no sense.
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Old 12-29-2008, 12:20 AM   #19
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Quote:
Originally Posted by REX8 View Post
So you think that GM decided to spend what will be millions of dollars on a law suit on the CHANCE of getting the tooling (which they don't own), instead of paying a few months back invoices. And moreover, that they would go into a lawsuit asking for the property of someone they owe money to?

Come on now, that makes absolutely no sense.
You mean like suing McDonald's because you were to stupid to know the coffee was to hot and burned yourself? Rex I know your a smart guy, but I just don't think you thought this one through. I don't know the facts, and until it hits the courts, only the two businesses in question know. But having owned a small business, coupled with the fact that GM has proved to be a poorly ran entity, I am going to step out on the limb.
1. I would be willing to bet that GM constant indecision on the release date of the Camaro has cost this company some big bucks.
2. I would be willing to bet that there is outstanding invoices not paid. Someone said 90 days earlier in the thread....I'll bet its way more than that. One might say " but there should be a contractual clause in regards to not having to deliver if they don't get paid?" Well maybe, but very likely not. Probably a penalty and/or interest clause, but if you got the great GM on the books you just don't throw them off. I had companies that didn't pay me for 6 months. The reasons why I continued to deliver services regardless are endless and to many to list. One is they figured heavily into my long range goals, which was directly tied into my line of credit with the bank. I wasn't in a position to piss them off.
3. When you got lawyers you can litigate anything. The fact that any of the above could have happened means absolutely nothing to a lawyer. Attorney's creed: Bring me enough money and I'll litigate anything.
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Old 12-29-2008, 01:22 AM   #20
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Just curious, had they never heard of NOT putting all their eggs in one basket?
Unfortunatly, these days there is no margin for such luxuries. If you tried to split suppliers, somebody that wasn't would step up, beat your price by the smallest fraction and crush you. GM these (and previous) days can't afford any stray pennies for such common sense as a bit of self protection.
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Old 12-29-2008, 02:46 AM   #21
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Quote:
Originally Posted by REX8 View Post
So you think that GM decided to spend what will be millions of dollars on a law suit on the CHANCE of getting the tooling (which they don't own), instead of paying a few months back invoices. And moreover, that they would go into a lawsuit asking for the property of someone they owe money to?

Come on now, that makes absolutely no sense.
if your lawyers are willing to extend you a line of credit for their services but your suppliers have already reached the end of their credit-extension rope then the logical choice in this case would be to sue
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Old 12-29-2008, 09:45 AM   #22
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Quote:
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...
My biggest problem: WTF is Cadence going to do with all that tooling? Absolutely nothing. So why in the world wouldn't they sell it to GM? Let alone give it away.
I thought it was pretty obvious... that tooling is Cadence's leverage. GM (probably) owes them money - so why would Cadence give up the only bargaining chip that they have left??
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Old 12-29-2008, 10:25 AM   #23
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I thought it was pretty obvious... that tooling is Cadence's leverage. GM (probably) owes them money - so why would Cadence give up the only bargaining chip that they have left??
That's how I interpret it.
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Old 12-29-2008, 10:30 AM   #24
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Originally Posted by REX8 View Post
So you think that GM decided to spend what will be millions of dollars on a law suit on the CHANCE of getting the tooling (which they don't own), instead of paying a few months back invoices. And moreover, that they would go into a lawsuit asking for the property of someone they owe money to?

Come on now, that makes absolutely no sense.
GM corporate attorneys are on the payroll. They haven't spent millions on this. I doubt they retained outside counsel for this action.
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