DETROIT -- The paint shop operator for the new Jeep Wrangler operation in Toledo, Ohio, has withdrawn from the project because of financial problems, the Toledo Blade newspaper reported in its Saturday, Feb. 4, editions.
Haden International Inc. of Auburn Hills, Mich., informed its unions in Toledo about the withdrawal on Friday, Feb. 3, the newspaper reported. The withdrawal was effective immediately.
A spokesman for the Chrysler group confirmed the withdrawal. "We are working on a transition," Ed Saenz told the newspaper.
Rumors about Haden's financial situation began circulating Friday.
Haden has not offered information to news outlets about the Toledo decision. As of Sunday morning no statements were posted on the company's Web site.
Palladium Equity Partners LLC of New York, which acquired a major stake in Haden in 2001, declined comment in the newspaper story. There was no additional information offered as of Sunday on Palladium's Web site.
United Auto Workers officials told the newspaper that plant executives told them that Haden was unable to meet payroll at the Toledo operation after this past week.
Dan Henneman, UAW chairman at the plant, was quoted as saying that Chrysler officials have assured the union that the development won't delay the start of production of 2007 Wrangler models in July.
DaimlerChrysler's North Toledo operations are slated to build two-door and four-door Wranglers in operations next to lines making the Jeep Liberty and the new Dodge Nitro.
"We have a car to launch and nothing is going to get into our way," Henneman told the newspaper.
Reuters reported that Palladium Equity Partners bought a 75 percent stake in Haden in August 2001 for $40 million, extending the firm's long-term strategy of investing in the challenged auto supplier sector. Analysts at the time told the wire service that the sale price likely reflected depressed industry valuations.
``We are painfully aware of the risks of investing in this sector,'' said Marcos Rodriguez, the managing member of Palladium who spearheaded the Haden deal. ``But traditionally, we have been able to do quite well in it."
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