Chrysler has filed a lawsuit against former parent Daimler for allegedly breaking a contract to supply the Michigan automaker with vital vehicle components. Chrysler said the breach of contract could impact some North American production.
According to a lawsuit filed by Chrysler on August 21, Daimler has failed to deliver steering columns and torque converters as previously agreed upon in a contract. The parts are used to produce the Jeep Grand Cherokee , Chrysler 300 and Dodge Charger and Challenger. Production of those vehicles has not yet been affect, but Chrysler warns production issues could arise if the situation is not rectified shortly.
“Daimler’s conduct threatens to shut down Chrysler Group’s manufacture of key product lines,” Chrysler spokesman Gualberto Ranieri told Automotive News.
Chrysler alleges that Daimler is holding off on the parts deliveries due to an engine contract tied to the ‘old’ Chrysler. Before filing for Chapter 11 bankruptcy Chrysler had agreed to purchase a certain number of diesel engines from Daimler for the European market, but never came close to the agreed upon figure. That contract resides with the old Chrysler in bankruptcy court but Daimler claims it is still owed $78.7 million.
“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,” Ranieri added.
Chrysler says a bankruptcy the cancellation of the Daimler engine contract was approved during its Chapter 11 court case.
