If either General Motors or Chrysler goes into bankruptcy, it could wreak havoc on the supply chain that turns raw materials into a car’s constituent parts. The risk wouldn’t fall just on the Big Three, but also foreign automakers who use the same suppliers as their U.S. counterparts. Concern over systemic failure in the auto supply chain was so great last month that the Treasury Department approved $5 billion in loans to suppliers.
Today there was a glimpse into what an auto supplier shutdown could mean for car companies. About 1,500 people were sent home from two Chrysler minivan plants in Ontario because of a for engines and transmissions from a parts plant that had been closed.
The entire second shifts at both plants were stopped, which came after a Wednesday work stoppage, according to The Windsor Star.
The Solus Manufacturing plant was recently taken over by new owners that closed it last week. Chrysler said it doesn’t know if every factory would be affected by this shortage — or how soon, considering auto plants currently have inventory.
The problem is the plants’ new owners laid off its workers, but they had a sit-down strike on the premises to obtain severance. Chrysler paid $400,000 to the employees to release the tooling. Now Chrysler Canada is dispatching its lawyers to obtain secure access to tooling parts and move them to a plant near Toronto to continue production.