Chrysler Group LLC said on Thursday it will resume production of several U.S. plants on Monday as scheduled after resolving a dispute with supplier TRW Automotive Holdings Corp.
Chrysler had sued TRW earlier this week, accusing the auto parts company of refusing to supply parts and thereby jeopardizing its resumption of production next Monday after a two-month shutdown.
But Chrysler said in a statement on Thursday that TRW has now assured that it will continue to shop the parts the automaker needs to resume production on schedule.
Chrysler, which emerged from bankruptcy this month by selling most of its assets to a company led by Italy's Fiat, had idled all of its plants since its bankruptcy filing on April 30.
In a lawsuit with the U.S. Bankruptcy Court in Manhattan on Wednesday, Chrysler had also asked for sanctions of $1 million a day against TRW if it does not make the shipments.
TRW representatives were not available for comment.
Under a June 10 sale agreement with Fiat and other buyers, Chrysler's contracts with TRW and other suppliers were transferred to the new company led by Fiat.
Under the agreement, Chrysler has agreed to pay TRW $27.2 million in "cure amounts", money owed to suppliers for contracts reached before Chrysler filed for bankruptcy protection.
TRW has disputed the settlement, saying its calculations of the amounts due under its contracts are in excess of the cure costs as adjusted by Chrysler.
The case is In re Chrysler LLC, 09-50002, U.S. Bankruptcy Court, Southern District of New York.
