The maker of Chrysler, Dodge, Jeep and Ram vehicles and two automotive suppliers received the go-ahead to take into their possession tooling they owned from a bankrupt supplier.
Stellantis NV alongside Aident plc and Yanfeng International Automotive Technology Co. Ltd.’s interior systems company received the permission after filing for an automatic stay on the assets at Unique Fabricating Inc. in U.S. Bankruptcy Court for the District of Delaware. The parties said they were at risk of “enormous losses” if they had to shut down vehicle assembly lines after Unique Fabricating on Thursday filed for Chapter 7 bankruptcy.
The Auburn Hills-based supplier produces plastic, rubber and multi-material foam components. The liquidation was expected to result in the closure of all of its plants in Michigan, Georgia, Kentucky, Mexico and Canada, and layoffs for all of its employees.
Automakers commonly own suppliers’ equipment to protect against events like bankruptcy, according to the motion. The equipment is the only set that exists to make certain parts for Stellantis, whose U.S. company is legally known as FCA US LLC.
“The Debtors,” Stellantis attorney Matthew Ward wrote in its motion, “have commenced Chapter 7 cases and have ceased operations, thereby jeopardizing FCA US’s ability to continue assembling vehicles in North America especially if the tooling cannot be removed and used by alternative suppliers to manufacture parts for FCA US.”
Stellantis declined to comment on the bankruptcy case.
In May, Unique Fabricating entered into a bailout agreement with General Motors Co., Stellantis’ subsidiaries and Yanfeng Automotive Interior Systems Co., three principal customers. They agreed to cover price increases or provide investment of up to $15 million to help the supplier, according to a filing with the SEC. The agreement was in place until Oct. 31 to give Unique Fabricating time to find a qualified buyer of the company.
Unique Fabricating says it has between 1,000 and 5,000 debtors and liabilities of $10 million to $50 million with the same value in assets. The process to delist the company from the New York Stock Exchange began on Thursday.
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