Plastech Bankruptcy Just an Excuse to Close Daimler-Chrysler Plants? is Daimler-Benz to Blame?

Not only has Michigan suffered with the bankruptcy of the Troy, Michigan, based Plastech, but now four Chrysler plants will close because of Plastech demise. Or so we are told. Allpar poses an interesting idea, however. Perhaps Chrysler's problems stem from poor choices in the corporate offices. The Daimler-Benz takeover drained company money and caused job losses

'The "deep pockets" of Mercedes became far too deep to find any cash in after billions were extracted from Chrysler, leaving nothing left to weather downturns.' says Allpar writer. Chrysler had opened unionized 'world motor' plant in 2005, only to have to close it after the takeover. In 2006 Chrysler announced its decision to import a small economy car from Chery of China. Naturally this took another whack at American jobs.

The only bright side to the recent plant closings is for those living in China. For every plant closed in the US, a new one will open in China. Of course, China as the leader in human rights abuses will treat its workers somewhat differently than we do here in America.

Back to the Plastech issue. Plastech is a fairly small auto parts manufacturer. Prior to its bankruptcy, Plastech had bid on a much larger company buy out, Collins and Aikman. When Collins and Aikman went bankrupt in May, Plastech was highly pretty deeply in debt already. Daimler-Chrysler was a major customer of Collins and Aikman. When C & A went down, it took Plastech with it. and presumably Daimler-Chrysler with it. It is hard to see how a smaller company could cause such chaos for a giant like Daimler.

According to the New York Times article, Chrysler had originally intended to sell its Acustar line anyway. This would have meant further plant closings and job loss. Naturally the United Auto Workers opposed this decision. Chrysler agreed to continue making the Acustar line and only close four subsidiary plants instead. This move is the lesser of two evils. Now only 2,000 jobs will be lost instead of the 17,300 jobs lost in the initial plan. The NY Times quoted a UAW representative who made this comment.