Flex-N-Gate has quarreled with Delphi over steel pricing for a year. According to an attachment to the Delphi complaint, Flex-N-Gate says Delphi breached the supply agreement by demanding unilateral price reductions.
Also, Delphi has consistently asserted its right to market test the supply of Delphi parts, the attachment says. Market testing is submitting contractual work to new bids to find lower prices, a practice loathed by suppliers.
So when Flex-N-Gate prepared to shut its Cambridge plant, it asked Delphi for a 30 percent price increase on the critical parts it supplies. Flex-N-Gate does business in Canada as Ventra Group Inc. In Flex-N-Gate, Delphi has found a big adversary.
Flex-N-Gate CEO Shahid Kahn quickly built the company with a series of acquisitions into a supplier of stamped parts, plastic and steel bumpers and fascias with sales last year of $1.34 billion. Neither Khan, nor his general counsel, Timothy Graham, returned phone calls.
Steel is frequently 50 percent of a stamping company's costs, says consultant Craig Fitzgerald of Plante & Moran PLLC of Southfield, Mich. So the doubling of steel prices for companies such as Flex-N-Gate threatens their profit margins.
Delphi, in its lawsuit against Flex-N-Gate, says the stamper last year coerced Delphi -- with the threat of a component cutoff -- into agreeing to steel surcharges for its components. "Perhaps emboldened by their success in coercing Delphi to surrender," the lawsuit alleges, Flex-N-Gate "has embarked on another course of economic coercion."
You may e-mail Robert Sherefkin at