Chrysler is accusing its former corporate parent, Daimler AG, of not honoring contracts to supply components, threatening production at several ChryCo plants--including the one where the LX-platform rear-drive cars are made.
 

In the suit, filed in U.S. Bankruptcy Court in New York on August 21, Chrysler alleges that Daimler is refusing to supply components like torque converters and steering columns. The suit says that's in order to pressure Chrysler into making a volume-shortfall payment of about $78.7 million that Daimler claims it is owed because Chrysler didn't buy as many of the Daimler-built 2.2L diesel 4-cylinder engines--used in European-spec PT Cruisers--as it had agreed to.

Chrysler maintains that the volume-shortfall issue was resolved in mid-April, in a pre-petition agreement made before Chrysler filed for bankruptcy protection on April 30. "Chrysler Group believes that Daimler's misconduct is designed to extort a settlement by wrongfully withholding crucial parts that Daimler has contractually committed to supply to Chrysler Group," Chrysler spokesman Gualberto Ranieri told Automotive News.

Ranieri added that Daimler's move threatens LX-Body production (Charger, Challenger, 300C) at Brampton (Ontario) Assembly, as well as Jeep Grand Cherokee production at Detroit's Jefferson North Assembly Plant.

Daimler claims the suit is without merit.